TIDM85FA
RNS Number : 2125H
Notting Hill Genesis
22 November 2022
Notting Hill Genesis trading update
Half year ended 30 September 2022
Overview
Notting Hill Genesis (NHG) was formed in April 2018 from the
merger of Notting Hill Housing and Genesis Housing Association. Our
primary purpose is to build and maintain quality, affordable homes,
creating diverse and thriving communities. Everything else we do
supports that aim. We are one of the largest housing associations
in England, providing around 67,700 homes across London and
surrounding areas.
The following trading update compares the NHG unaudited accounts
for the half year ended 30 September 2022 and comparative (half
year ended 30 September 2021).
Statement of comprehensive income
Half year ended Half year ended
3 0 Sep 2022 GBPm 30 Sep 2021 GBPm Movement GBPm
Turnover 368.9 419.3 (50.4)
Cost of sales (57.9) (117.5) 59.6
Operating costs (215.2) (216.2) 1.0
Surplus on disposal of fixed assets 26.6 29.1 (2.5)
Gains from joint ventures 1.7 0.8 0.9
------------------- ------------------ --------------
Operating surplus 124.1 115.5 8.6
------------------- ------------------ --------------
Net interest payable (67.1) (66.1) (1.0)
Movements in financial derivatives 30.0 5.5 24.5
------------------- ------------------ --------------
Surplus to 30 September 87.0 54.9 32.1
------------------- ------------------ --------------
Overall, turnover decreased by 12.0% to GBP368.9m (from
GBP419.3m), while operating surplus increased by 7.4% to GBP124.1m
(from GBP115.5m). The increase in surplus can be attributed to an
increased social housing lettings surplus up 19.1% to GBP73.0m
(from GBP61.3m). Other social and non-social income increased by
181% to GBP13.2m (from GBP4.7m).
We sold 242 homes (30 September 2021: 314 homes) during the half
year ended 30 September 2022. Due to the lower number of units
staircased, the surplus on sale of fixed assets decreased by 8.6%
to GBP26.6m (from GBP29.1m).
Operating costs have decreased by 0.5% to GBP215.2m (from
GBP216.2m).
Net interest and financing costs increased by 1.5% to GBP67.1m
from a combination of rising interest rates, addition and drawing
down of new revolving credit facilities.
Statement of financial position
As at As at
30 Sep 2022 31 Mar 2022 Movement
GBPm GBPm GBPm
Housing properties 6,777.1 6,741.8 35.3
Other tangible assets 131.1 127.9 3.2
Investments 1,139.1 1,200.1 (61.0)
Net current assets 218.4 254.0 (35.6)
------------- ------------- -----------------
Total assets less current
liabilities 8,265.7 8,323.8 (58.1)
------------- ------------- -----------------
Loans due in more than one
year 3,272.8 3,328.5 (55.7)
Unamortised grant liability 1,085.3 1,126.9 (41.6)
Other long-term liabilities 147.5 238.5 (91.0)
Capital and reserves 3,760.1 3,629.9 130.2
------------- ------------- -----------------
Total funding 8,265.7 8,323.8 (58.1)
------------- ------------- -----------------
Housing properties have increased by GBP35.3m to GBP6,777.1m as
at 30 September 2022. The increase is attributable to:
-- Affordable homes development GBP83.6m
-- Works to existing properties GBP9.7m
-- Transfers from stock held for sale GBP1.0m
The above has been partially offset by GBP30.1m of housing
property disposals (mainly staircasing) and a GBP28.9m depreciation
charge.
Investment properties have decreased by GBP61.0m to GBP1,139.1m
during the first half of the current financial year. The reduction
is driven mainly by the disposal of 182 market rent units at Royal
Albert Wharf (carrying value GBP67.2m) and a commercial unit at
Warton Road (carrying value GBP0.8m). The decrease has been
partially offset by GBP7.0m continued spend on the development
programme of 99 market rent properties at Aylesbury plot 18.
Due to the continued uncertain political, economic and market
environment, the board and management continue to review the
carrying value of investments. Management has also evaluated the
likelihood of recovery of all debtors with specific consideration
to the level of arrears and likelihood of non-payment.
Group debt as at 30 September 2022 was GBP3,296.8m (31 March
2022: GBP3,352.5m) and undrawn facilities as at 30 September 2022
were GBP916.7m (31 March 2022: GBP964.7m).
NHG remains a financially robust organisation with substantial
liquidity. We retain good relationships with our principal lenders
and are ready and able to access the capital market as
necessary.
We are mindful of the financial risks associated with our
development pipeline and investment programme and manage these
closely.
Other financial information
Half year Half year
ended ended
30 Sep 2022 30 Sep 2021 Movement
GBPm GBPm GBPm
Capitalised interest 4.4 4.7 (0.3)
------------- ------------- ---------
Housing depreciation 29.0 37.4 (8.4)
------------- ------------- ---------
Other depreciation 4.0 4.4 (0.4)
------------- ------------- ---------
The capitalisation of the group's borrowing costs has been
declining since the end of the 2020-21 financial year. This is
mainly due to the completion of large land-led development schemes.
Most of the new schemes that are being developed are largely S106
acquisitions from external developers, which would not require the
capitalisation of borrowing cost over a prolonged construction
period.
Housing depreciation has decreased in the six months to 30
September 2022 due to costs associated with the disposal of
cladding which are written off as and when the costs are
incurred.
Key performance statistics
Half year ended Half year ended
30 Sep 2022 30 Sep 2021
% %
Surplus as % of turnover 23.6 13.1
----------------- -----------------
Operating margin 33.6 27.6
----------------- -----------------
Operating margin social housing lettings 28.2 25.0
----------------- -----------------
Surplus as % of income from lettings 33.6 22.4
----------------- -----------------
Rent losses
(voids and bad debts as % of rent and service charges receivable) 2.2 2.7
----------------- -----------------
Rent arrears
(gross arrears as % of rent and service charges receivable) 9.7 10.2
----------------- -----------------
Interest cover
(surplus before interest payable, depreciation and amortisation of housing
properties as
% of interest payable) 246.9 267.0
----------------- -----------------
Gearing (total loans as a % of housing properties at cost) fell
from 39.2% at 31 March 2022 to 38.6% at 30 September 2022.
Full year position
The board set a budgeted surplus of GBP39.4m for the six months
ended 30 September 2022 (with GBP87.0m achieved) and a full year
budgeted surplus to 31 March 2023 of GBP69.2m. The budget includes
no allowance for mark to market movements in financial derivatives
or for movements in the value of investment properties.
For further information, please contact:
Yomi Okunola, chief financial officer 07506 713 236
For media queries, please contact:
Wayne Tuckfield, news and media manager 020 3815 0184
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END
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