62ZW Rhp Fin 48

RHP Group trading update for the year ending 31 March 2024

·    Richmond Housing Partnership Group (RHP) is today issuing its consolidated trading update for the year ended 31 March 2024.

·    These figures are unaudited and for information purposes only.

Highlights for the period ending 31 March 2024

·    RHP Group own and manage 10,805 homes

·    Turnover for the period was £71m (2023: £67m)

·    Social housing lettings turnover contributed 86% of total turnover (2023: 85%)

·    Operating surplus (including asset sales) for the period was £16m (2023: £19m)

·    Operating margin on social housing lettings was 24% (2023: 28%)

·    Overall operating margin (including asset sales) was 23% (2023: 28%)

·    Overall operating margin (excluding asset sales) was 21% (2023: 25%)

·    Net margin on shared ownership (first tranche) was 12% (2023: 2%)

·    The surplus after tax and pensions for the period was £9m (2023: £13m)

·    Asset gearing at the year-end was 55% (2023: 57%)

·    Return on capital employed for the period was 3.2% (2023: 3.7%)

Commenting on the results, Corinna Bishopp, Executive Director of Finance and Deputy Chief Executive, said:

The Group's operating surplus was £16m (2023: £19m) and operating margin of 21% (2023: 25%). Ongoing development has ensured we continue to grow our turnover, and the first tranche sales of shared ownership properties has contributed £2.7m (2023: £3.3m) to our turnover and £0.3m (2023: £0.1m) to our overall surplus.  Our social housing cost per unit has increased from £5,165 in 2023 to £6,049.

The reduction in operating surplus, operating margin and increased in social housing cost per unit is due to continued sustained pressure on our organisation through cost pressures. These are either as a result of inflation or other pressures specific to the social housing sector such as increasing insurance and construction costs. Our procurement teams continue to limit these cost increases where possible whilst balancing with quality and value for money.

Additionally, we continue to increase investment in our properties in order to ensure we are delivering good quality, safe and secure homes, are improving their energy performance and addressing important issues such as any damp and mould promptly and thoroughly. We are also investing funds in ensure we are tackling any service issues and complaints we are facing.

The Group's total comprehensive income was £8.6m (2023: £13.3m) and RHP's subsidiary, Co-op Homes (South) Limited has contributed £0.4m (2023: £1.3m) to this overall surplus.

Our EBITDA-MRI margin at 16% (2023: 16%) demonstrates the additional investment made, but still illustrates strong core performance that can comfortably cover the level of investment required to keep our homes in good condition.

Our credit rating:

We have made considered choices to increase investment to improve the energy efficiency and safety of our homes and our services to our customers alongside our steady and cautious continued development of new homes. We recognise this was likely to lead to a re-assessment in our credit rating. We are pleased to confirm our revised credit rating to A stable reflecting these strategic choices.

Unaudited Financial Metrics

Notes:

₁ Operating surplus / Turnover

₂ General Needs, Supported housing, Affordable rent and Low-cost home ownership tenures

₃ Operating margin including asset sales includes all activity; operating margin excluding assets removes gain or loss on disposal of assets including first tranche shared ownership sales

₄ Operating surplus on first tranche shared ownership sales / Turnover from first tranche shared ownership sales

₅ (Operating surplus + Depreciation + Amortisation - Capitalised major repairs) / Net interest paid

₆ Net Debt / Housing assets at historic cost

₇ Net debt / Total units owned & managed

₈ 24-month cashflow requirement (before financing). Factors in cash generated from operating activities and investing activities, including capital grant receipts.

₉ Cash, deposits, undrawn loans and RCF

₁₀ Retained element of RHP Finance PLC 2048 bonds

This trading update contains certain forward-looking statements about the future outlook for RHP Group. These have been prepared and reviewed by RHP Group only and are unaudited. Forward looking statements inherently involve a number of uncertainties and assumptions. Although the Directors believe that these statements are based upon reasonable assumptions on the publication date, any such statements should be treated with caution as future outlook may be influenced by factors that could cause actual and audited outcomes and results to be materially different. Additionally, the information in the statement should not be construed as solicitation/recommendation to invest in RHP's bonds.

For further information, please contact:

Corinna Bishopp, Executive Director of Financial and Commercial Services

Investor.relations@rhp.org.uk

https://www.rhp.org.uk/rhpui/investors