TIDM51GC
RNS Number : 6288M
Affinity Sutton Capital Markets PLC
31 July 2017
CLARION HOUSING GROUP PUBLISHES STRONG SET OF FIRST FINANCIAL
RESULTS
Clarion Housing Group, the UK's largest housing association,
today publishes its first Annual Report and Accounts following the
merger of Affinity Sutton and Circle Housing in November 2016.
Highlights:
-- Successful merger to form largest housing association in the UK
-- Underlying operating cost efficiencies already realised; significant further savings planned
-- Turnover of GBP796m
-- Net surplus of GBP173m
-- Operating margin of 36%
-- Occupancy rate of 98.4%
-- Pipeline of new homes up to c.8,000 homes
-- Group remains committed to target of building 50,000 homes over 10 years
-- 1,340 new homes constructed
-- 3.5% tenant arrears
-- GBP75m spent on existing homes and GBP196m on new social homes
Financial performance
The Group recorded a strong financial performance in the year
ended 31 March 2017. Net surplus for the year was GBP173 million
(2016: GBP234 million) on a turnover of GBP796 million (2016:
GBP825 million). Despite absorbing one-off exceptional costs
related to the successful delivery of the UK's largest housing
sector merger during the year, operating margin was excellent at
36% (2016: 37%).
Underlying operating cost per unit has already decreased in real
terms (by 0.2%, excluding one-off costs in the current and prior
years), driven by immediate efficiencies that the Group has
realised. The Group has an excellent track record of delivering
efficiencies from merger and expects to bear down on costs further
as progress to integrate the legacy operations continues.
Sales turnover excluding joint ventures was GBP76 million (2016:
GBP106 million), broadly in line with expectations at merger. Sales
operating margin was strong at 39% (excluding joint ventures), an
increase of 4%. Overall performance remains robust, reflective of a
disciplined sales strategy.
The Statement of Financial Position shows Housing Fixed Assets
with a net book value of GBP6.5 billion (2016: GBP6.3 billion)
which incorporates a GBP196 million investment in new social homes
(2016: GBP174 million) and a GBP75 million investment in existing
social homes (2016: GBP83 million) during the year. On an open
market basis the Group considers its housing assets to be worth in
excess of GBP22 billion. The Group plans to leverage this inherent
value to deliver its development ambitions with a key focus on
affordable homes for rent and shared ownership, in particular
through planned asset management. The income and expenditure
reserve ended the year at GBP1.7 billion (2016: GBP1.5 billion),
another indication of the substantial financial capacity the new
Group now has.
The year-on-year debt increase was minimal (GBP20 million) due
to strong cash generation from both rental and trading sales
activity, as well as some asset sales. Strong cash generation
remains at the heart of Group strategy, limiting the growth in debt
otherwise necessary to fund development. Strong liquidity (cash and
undrawn facilities) was maintained during the year finishing at
GBP976 million (2016: GBP1.09 billion), affording the Group
considerable flexibility.
The Group maintains an internal set of Financial Golden Rules
which serve as a prudential financial framework for performance
monitoring and planning future strategy. They also ensure that long
term financial resilience is maintained which is a central strand -
and enabler - of the Group's corporate strategy. All these rules
were met during the year. Social Housing Interest Cover during the
year was 1.5 times, exceeding the internal 1.3 times minimum,
whilst EBITDA MRI Cash Interest Cover was robust at 2.0 times
against an internal minimum of 1.5 times.
A key feature of the Group's approach to managing risk is to
maintain a clear corporate split between regulated and non
regulated activities and specific Financial Golden Rules have been
developed accordingly. All were met during the year, including
"value at risk" coverage which was 6.7 times against an internal
minimum of 1.5 times. Commercial activities are isolated within a
separate subsidiary, Latimer. As Latimer matures it will build up
reserves to provide a 'buffer' appropriate to the risks it is
exposed to. Subject to this condition being met it will provide a
source of income to help fund core social housing activity.
In summary, the Group ended the year in a strong position from
which to execute its future plans. It remains confident in its
ongoing ability to improve services, invest in new systems and new
ways of working to help realise significant efficiencies, improve
financial strength and resilience and increase capacity.
Operational performance
The Group's core activity ended the year with solid performance
after extensive management focus to improve in several areas which,
at merger, were not at a level that the new Group would normally
expect. Occupancy rates remain high at 98.4% for the year whilst
calls answered within target at customer contact centres rose to
86.0% across the Group at the end of the year, an increase of 8.3%
on the April 2016 equivalent. Repairs completed on time increased
to 95.6% (2016: 93.6%), whilst current tenant arrears were well
within target at 3.5% (2016: 3.3%).
Overall customer satisfaction for the year was 76.7%. This
improved in the post merger period, but is below our medium term
target of 80%, mainly because of the well publicised service level
challenges, especially in East London. Although this performance
compares reasonably well in the sector, improvement remains a key
priority. The action plan put in place following merger to
transform service delivery has met its targets; the Group is taking
further steps to ensure improvements are sustained.
Significant work has been undertaken to improve the way that
Clarion's customers are able to transact with the organisation and
provide a consistent and efficient service. The Group is confident
satisfaction rates will continue to improve.
The Group remains committed to its target to build 50,000 homes
over 10 years. Significant work was undertaken to put in place the
supporting resource and governance structures whilst progress
towards that strategic ambition is already being made - 1,863 new
homes were started and a pipeline of circa 8,000 homes had been
established by the end of the year. 90% of the 1,340 new homes
delivered in the year were affordable; the Group expects this
proportion to be two thirds over the longer term.
During the year work started on a number of strategic
partnerships which completed after year end, including a strategic
partnership with the Mayor of London which will see 5,000 new homes
brought forward and another with Southwark Council for 600 new
homes. Other such partnerships are expected to be finalised in
2017.
Scale is key to delivery; important progress has been made in
this regard. The average scheme size approved by the Group
Investment Committee since merger was 74 at year end - this
compares to an average current scheme size of circa 40 units. The
Group has a track record of delivering complex multi-tenure,
multi-phase projects which transform communities and during the
year worked up plans to invest GBP1 billion in regeneration in the
London Borough of Merton, a project which will deliver 2,800 new
homes.
Helping residents to build better futures is a key merger
ambition. The social value of community investment activity over
the year was GBP85 million with over 1,700 individuals supported
into employment, demonstrating the Group's charitable foundation's
ability to deliver the largest and most ambitious community
investment programme in the sector.
Keith Exford, Chief Executive Officer, said:
"This is a very good start for the new Clarion Housing Group and
an excellent set of results. One of the fundamental principles of
our overall strategy is to maintain financial strength to increase
both our capacity and resilience. Together with the operational
improvements that we continue to make, they are proof that we are
quickly establishing a solid foundation to deliver on our key
merger drivers: to provide consistent customer-focused services,
build more homes, deliver efficiencies, and increase the numbers of
people we can support into work and training.
"Clarion's roots can be traced back over 100 years. We have the
resource, experience and determination to maintain our traditions
of helping those in housing need, investing in communities and
providing a quality service for our customers. As we face the
challenges of an uncertain political and economic environment we
will remain focussed on maintaining and protecting our financial
strength, enhancing our capacity to improve services and, provide
homes for those in housing need for the next 100 years."
For further information, please contact:
pressoffice@clarionhg.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACSUAASRBNABOAR
(END) Dow Jones Newswires
July 31, 2017 10:19 ET (14:19 GMT)
Affinity Sut.38 (LSE:51GC)
過去 株価チャート
から 1 2025 まで 2 2025
Affinity Sut.38 (LSE:51GC)
過去 株価チャート
から 2 2024 まで 2 2025
