TIDM38LT
RNS Number : 8454S
Libra (Longhurst Group)Treasury PLC
18 November 2021
Longhurst Group consolidated Trading Update for the period
ending 30 September 2021
Longhurst Group ('LG') is today issuing its consolidated
unaudited trading update for the six months ending 30 September
2021 ('2021/22 Q2'). All statement of comprehensive income
comparatives are to LG's consolidated unaudited prior year
equivalent period being the six months ending 30 September 2020
('2020/21 Q2').
HIGHLIGHTS
2021/22 2020/21
Q2 Q2
GBPm GBPm
Turnover 82 72
Cost of sales (12) (8)
========
Operating costs (49) (44)
Operating surplus 21 21
--------
Surplus on sale of properties not developed
for sale 2 0
Interest receivable 0 0
========
Interest payable (15) (16)
========
Share of profit/(loss) from associated entity 0 0
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Movement in fair value of investment properties 0
Corporation tax (0) 0
Net surplus 8 6
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2021/22 2020/21
Q2 Q2
Operating surplus % 26% 29%
Net surplus % 10% 9%
SHL surplus % 30% 34%
Sales Income as % of Turnover 18% 13%
Interest Cover EBITDA% 209% 193%
Interest Cover EBITDA MRI% 178% 178%
Interest Cover SHL% 146% 165%
Gearing % 47% 49%
2021/22 2020/21
Q2 Q2
GBPm GBPm
Drawn debt (GBP000's) 680 689
Undrawn Facilities (secured) (GBP000's) 93 115
Undrawn Facilities (to be secured) (GBP000's) 150 50
Cash (GBP000's) 75 96
-- There are 24,014 units in management (as at 31 March 2021: 23,838)
-- LG has completed 277 new residential homes 2020 Q2 (2020 Q2: 205)
2021/22 FORECAST
The forecast assumes that current market conditions continue and
are based on information available at Q2 2021/22
Commenting on the results Rob Griffiths, Deputy Chief Executive
and Chief Financial Officer said:
The group's results for the first 6 months of the financial year
demonstrate some strong performance in several key areas. In
particular our performance on first tranche sales has significantly
exceeded our business plan target and we have a healthy forward
plan of sales already agreed off plan for the remainder of the
year. Our core general needs rental business continues to perform
well with current tenant arrears at 1.87% at the end of
September.
We continue to see some Covid related impact on performance
across our care and support business with increased staffing costs
and lower income due to voids on some of our services.
Our short-term expectation, for the next 6 months, is that our
core social housing operating costs will be higher than forecast,
as we address a backlog of repairs to our properties. The backlog
has materialised due to a combination of the pandemic / Brexit, and
we have needed to address an interim impact of performance from our
repairs contractor, with shortages of both labour and materials
cited. This has been quickly mitigated by management through a Task
and Finish Group to concentrate on a recovery plan and we are
progressing with other contractors to better distribute the
work.
In line with the rest of the construction industry we continue
to experience some challenges linked to the availability of labour
and materials which has caused some delays on our development
programme, although this is much less significant than the delays
experienced in 20/21.
DEVELOPMENT PROGRAMME
We continue to progress with our development programme using a
prudent, risk-based approach, in line with our business plan
assumptions and targets. Longhurst Group were successful in their
bid for additional Homes England funding through the Affordable
Homes Programme 2021-26. Total completions for the financial year
21/22 are forecast to be 713 properties (537 Rented and 176 Shared
Ownership).
SHARED OWNERSHIP SALES
120 sales have completed as at Q2 achieving an average first
tranche % of 47%. Most properties are being sold 'off plan' and are
sold subject to contract with only one property being unsold for
greater than 6 months which is sold subject to contract.
As at 30 September 2021, LG, held 24 completed shared ownership
homes as unsold stock of which 21 were 'sold subject to contract'
and 3 'under offer'.
LG are forecasting a pipeline of further sales throughout the
next 6 months with a forecast 20% profit in the current financial
year.
NET DEBT AND LIQUIDITY
During Q2 LG has strengthened its funding and liquidity
position, agreeing GBP100.0m of additional funding to be drawn on a
deferred basis during 2022 and 2023. LG was also successful in
their bid for AHP 2021-26 Homes England funding under their
Strategic Partner status.
ENVIRONMENTAL, SOCIAL, GOVERNANCE (ESG)
LG continue to work with the team at Savills, the Executive and
Board to consider the wider ESG Strategy to be agreed at the end of
the year. LG have adopted the Good Economy reporting framework.
Production has started on 56 factory-built new homes for our
innovative new development in Cambridgeshire.
Low-carbon housing manufacturer LoCaL Homes, owned by
GreenSquareAccord, will supply our development partners Burmor
Construction with the units for our California Road development
near Huntingdon. The properties will also benefit from ground
source heat pumps.
The new homes are being built in the LoCaL Homes facility in
Walsall and delivered to site as complete thermally efficient
insulated wall panels with external coverings.
Charmaine Simei, the Group's Director of Community Investment,
won the 'Professional of the Year' award at the Women in Housing
Awards.
As Director of Community Investment, Charmaine is the figurehead
and ambassador for all our Community Investment activity, leading a
newly formed team and discovering innovative ways to boost social
value across the communities we serve.
Over the last year, she's driven forward projects including the
launch of our new Customer Wellbeing Hub, the Improving Lives
Hardship Fund and is also heavily involved with the work of the
Housing Associations' Charitable Trust (HACT). She's also recently
joined the board of Communities that Work.
Thanks to Charmaine's work, the Group is now front and centre of
Community Investment and social value discussions and made nearly
4,000 interventions last year through our Community Investment
programme.
IMPROVING LIVES STRATEGY
Our Improving Lives Strategy reaffirms LG's commitment to focus
our efforts into the two areas of health and wellbeing and economic
resilience and delivering five key objectives between now and
2025
-- Focusing on our customers and communities
-- Delivering an integrated housing, care and support offer
-- Providing the homes people want, where they're needed
-- Building and maintaining great partnerships
-- Our people and culture
KEY UPDATES
The Board of Longhurst Group Limited has approved the
appointment of Jenny Brown as its new Chair with effect from 1(st)
January 2022 when current Chair, Bob Wilson, steps down following
the end of his nine-year term.
LG appointed to Homes England's new GBP20bn procurement
framework. The new Dynamic Purchasing System (DPS) will make it
easier for organisations like ourselves to access land owned by
Homes England - the Government's housing delivery agency.
Longhurst Group and Nottingham Community Housing Association
(NCHA) will receive GBP230 million in Government funding after once
again being selected as a Homes England strategic partner. Our
joint application with NCHA will see a total of 3,935 new
affordable homes being built over the coming years.
UNAUDITED FINANCIALS
The unaudited financials exclude further adjustments that are
subject to audit review:
Statement of Comprehensive Income 2021 Q2 2020 Q2 Change %
GBPm GBPm
Turnover
Non-sales 67 63 7%
Sales 14 9 58%
Total Turnover 82 72 13%
-------- ----------- ------------
Operating costs and cost of sales
Non-sales (49) (44) 12%
Sales (12) (8) 55%
Operating surplus 21 21 1%
-------- ----------- ------------
Surplus on disposal of fixed assets
and investments 2 0 266%
Share of profits from joint ventures 0 0 -16%
Change in value of investment property - -
Surplus before Interest and Tax 23 21 6%
-------- ----------- ------------
Net interest charge (14) (14)
Other finance income/ (costs) (1) (1)
Taxation (0) 0
Surplus for the period after tax 8 6 1%
======== =========== ============
Statement of Financial Position 2021 Q2 31/03/2021 Change GBPm
GBPm GBPm
Housing properties 1,229 1,206 23
Other fixed assets 18 17 1
Investment Properties 8 8 0
Investment - associates 0 0 0
Net current assets 67 65 2
Total assets less current liabilities 1,322 1,297 25
-------- ----------- ------------
Loans due > one year 672 677 (5)
Unamortised grant liabilities 321 298 23
Derivatives - interest rate swaps 20 22 (2)
Other long term liabilities (Pension
Liability) 20 22 (1)
Capital and reserves 288 278 10
Total non-current liabilities and reserves 1,322 1,297 25
-------- ----------- ------------
This trading update contains certain forward-looking statements
about the future outlook for LG. Although the Directors believe
that these statements are based upon reasonable assumptions, any
such statements should be treated with caution as the future
outlook may be influenced by factors that could cause actual
outcomes and results to be materially different.
For further information, please contact:
Libra (Longhurst Group) Treasury PLC
Robert Griffiths
Leverett House
Gilbert Drive
Boston
Lincolnshire
PE21 7TQ
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END
IR DKFBNDBDDQDD
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