Karbon Homes Limited Trading Statement (6570D)
June 30 2021 - 10:00AM
UK Regulatory
TIDM46GV
RNS Number : 6570D
Karbon Homes Limited
30 June 2021
Karbon Homes Group
30/06/2021
Karbon Homes Group trading update for the period ending 31 March 2021
-- Karbon Homes Group (KHG) is today issuing its consolidated trading update for the period ended 31
March 2021.
-- These figures are unaudited and for information purposes only.
Highlights for the period ending 31 March 2021
-- KHG own and manage 27,542 homes
-- Karbon Homes Limited maintained its G1/V1 status from the Regulator for Social Housing, following
an interim regulatory judgement in April 2021
-- Turnover (excl. asset sales) for the period was GBP142.4m (2020: GBP135.9m)
-- Operating surplus (excl. asset sales) for the period was GBP37.1m (2020: GBP34.3m)
-- Overall operating margin (excl. asset sales) was 26.1% (2020: 25.3%)
-- The surplus after tax for the period was GBP22.3m (2020: GBP22.1m)
-- Gearing as at 31 March 2021 was 35.9% (2020: 38.4%)
-- Return on capital employed for the period was 3.5% (2020: 4.0%)
Commenting on the results, Scott Martin, Executive Director of Resources, said:
'2020/21 has been a remarkable year in so many different ways, and we are proud to publish our
draft results for the year ended 31st March 2021. This represents the third year of our five-year
strategy and, like many other organisations during the pandemic, we've had to work very
hard to steer a path through these challenging times, keeping a focus on our strategic aims
of Homes, Customer and Place.
As an employer we did all we could to support our colleagues' health and wellbeing, and we invested
significantly in enabling our whole workforce to work remotely, both through technology and
in adjusting our working practices to keep everyone safe.
Our customers have had to tackle huge challenges this year, some having to face bereavement
and loss, some losing jobs, many moving on to Universal Credit for the first time. Our team
have been there to support them through it all.
In continuing to deliver vital services for our customers and offering increased pro-active
support for the most vulnerable, we have achieved our highest ever customer satisfaction score:
a Net Promotor Score of 55.6.
We are very pleased to have delivered 454 new affordable homes in this financial year, despite
lengthy shutdown periods, with more units being developed using modern methods of construction.
Customers moving into our new homes have also shown high levels of satisfaction with nearly
90% very satisfied or satisfied with the service they received during the process.
We also continue to invest in our existing homes. Our planned maintenance and capital investment
programme has seen us spend over GBP27m across our geographical footprint.
From a place point of view, we continue to invest in our communities, expanding our services
and focussing on those who need our help most. This can be through financial support for community
organisations, helping customers maximise their income and get into secure
paid employment or working with partners to make communities safer places to live. Some key
achievements in the year have been helping over 5,600 customers via our 'Money Matters' team
access over GBP5.4m in income and helping over 150 customers into employment or training.
Finally, our strong investment grade credit rating of A/Stable was retained in May 2021 as well
by our rating agency Standard & Poor's (S&P). S&P recognised the challenges facing housing associations
in controlling rent losses through voids and pressure on tenant arrears levels,
especially in parts of the UK where they think it may take longer to recover from the impacts
of the pandemic. They praised Karbon's focus on traditional social housing activities, cash
resources and our experienced management team.
Pleasingly, in first quarter FY22, it appears as if Karbon continues to manage these challenges
very well, with rent collected at 99.8% compared to a target of 99.5%, and void rent losses
at 1.69% compared to a target of 1.94%.
We look to the rest of the year with optimism as we build on these positives."
Unaudited Financial Metrics
31-Mar 31-Mar
2021 2020
Actual Actual
GBP'000 GBP'000
Statement of Comprehensive Income
Turnover (excl. asset sales) 142,400 135,933
Turnover (incl. asset sales) 146,355 142,918
Operating surplus (excl. asset sales) 37,140 34,356
Operating surplus (incl. asset sales) 38,757 38,622
Surplus after tax 22,096 22,105
Margins % %
Overall operating margin (excl. asset sales) (Note 1) 26.1% 25.3%
Overall operating margin (incl. asset sales) (Note 2) 26.5% 27.0%
Key Financial Ratios
EBITDA MRI interest cover (Note 3) 212.4% 227.3%
Gearing (Note 4) 35.9% 38.4%
ROCE (Note 5) 3.5% 4.0%
31-Mar 31-Mar
2021 2020
Liquidity
24 month liquidity requirement (GBP'000) (Note 6) 82,457 102,271
Cash and undrawn facilities (GBP'000) (Note 7) 282,389 186,396
Unencumbered stock (no of properties) 4,736 5,111
Value of unencumbered stock (average of EUV and MV, GBP'000)
(Note 8) 170,729 181,389
Loan security excesses (average of EUV and MV, GBP'000)
(Note 9) 112,341 211,539
Credit Rating
S & P A/Stable - May 2021
Notes:
1) Operating margin excluding asset sales removes the gain or loss on disposal of housing properties.
2) Operating margin including asset sales includes all activity
3) Earnings before interest, tax, depreciation and amortisation, major repairs included is
defined as: (Operating surplus - Disposal of assets - Outright sales and first tranche SO surpluses
+ Depreciation & impairment - Amortisation - Capitalised major repairs) / Interest paid
(reflecting the 'S&P Global methodology for rating public and non profit social housing providers',
published 1st June 2021)
4) Gearing is defined as: Group Net Debt / Group Housing assets at historic cost less depreciation
(RSH VFM Gearing definition).
Karbon have chosen to include cash held in non ring fenced investment accounts as available
cash, 2021: GBP83.3m (2020: GBP27.6m). Removing this would result in the gearing calculations
being 2021: 45% (2020: 41.6%).
5) Return on capital employed is defined as Operating Surplus (incl asset sales) / Total Assets
less current liabilities
6) 24 month cashflow requirements
7) Cash, investments and undrawn revolving credit facilities
8) Value of stock not held by a lender or security trustee, at average GBP36k per unit
9) Value of excess security held with current lenders or Prudential Trustees
This trading update contains certain forward looking statements about the future outlook for
Karbon Homes Group. These have been prepared and reviewed by Karbon 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 this statement should not be construed as solicitation/recommendation
to invest in Karbon's bonds
For further information, please contact:
Andrew Thompson, Assistant Director: Treasury
07917 642957
https://www.karbonhomes.co.uk/corporate/
END
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