TIDM85FA
RNS Number : 6869B
Notting Hill Genesis
05 June 2023
Notting Hill Genesis unaudited trading update for the financial
year ending 31 March 2023
FY 2022/23 trading update
Ahead of publication of the Notting Hill Genesis FY 2022/23
audited accounts this announcement provides an update on:
-- Operational performance
-- Key events and areas of focus
-- Environmental, Social and Governance (ESG) performance and
Sustainable Finance Framework (SFF)
-- Equality, diversity and inclusion
-- Development and sales
-- Treasury position
Operational update
At the commencement of financial year 2022/23 the Board set a
budgeted surplus of GBP69.2m and we expect to publish results that
exceed the budgeted surplus.
Our focus during 2022/23 has been on refreshing our relationship
with our residents, balancing the need to invest in existing homes
and services with maintaining our financial strength in the face of
increasing costs and reduced margins. In addition, we remain
committed to building much needed new homes and meeting our
sustainability goals. In 2022/23, we delivered 459 new homes and
started on site for a further 459. We also published our first
sustainability strategy setting out how we will ensure we are
carbon net zero by 2050.
We have recently concluded a significant research and insight
project to ensure we are shaping our future resident services
around resident priorities. Much of this work builds upon the
initiatives undertaken during the period of 2022/23. Notably, we
developed an in-house app to enhance the management of service
charges and implemented various measures to effectively address
cases of damp and mould.
We are pleased to confirm that in 2022/23 we delivered our
entire planned investment programme. Furthermore, as part of work
to improve our existing homes, and with input from residents, we
have developed and introduced a new standard for void relets. In
addition to general improvements, we now carry out substantial
refurbishments that were originally scheduled for a later stage,
ensuring that newly tenanted properties have updated kitchens,
bathrooms, new extractor fans, and are redecorated. This approach
significantly reduces initial issues encountered by residents upon
moving in and minimises disruptions from planned maintenance work
during the early years of their tenancy. Repair costs are also
lower in the medium term because void improvements are completed to
a higher standard.
We have successfully completed a 12-month pilot to review how we
design and manage our estates, of which we have around 600 of
various sizes and complexity. By focusing on specific estates and
drawing upon the expertise and best practice gained from our
regeneration programmes and community initiatives, the pilot has
effectively enhanced the resident experience. It has also laid the
groundwork for a new structure and operating model for our estates
and places in the future.
In line with our strategic focus on core activities we
transferred the bulk of our extra care business to a new registered
provider. The transfer has released funds for reinvestment
elsewhere in our business at the same time as ensuring a better
overall service for residents and greater opportunities for extra
care colleagues who are now employed by a more specialist provider
able to offer more bespoke support and better career development
options.
Our remediation programme for properties with building safety
issues continues to progress. As previously, we have required the
original contractor to put things right where possible and have
sought government funding, insurance monies and third-party
contributions to complement the funds we have already earmarked to
complete the programme. We have also made steady progress during
2022/23 to ensure we meet new legal requirements around building
safety, including those around maintaining a 'golden thread' of
information for our taller blocks.
Figure 1: A summary of key operational performance
indicators
Indicator Description FY 2023 FY 2022
Occupancy Number of homes let as a % of those available 99.2% 98.8%
----------------------------------------------- ------- -------
Re-let time Number of days taken to re-let a home 47 days 72 days
----------------------------------------------- ------- -------
Rent collection
rate Rent collected as a % of rent receivable 99.8% 99.3%
----------------------------------------------- ------- -------
Current tenant arrears as a % of annual
Current arrears rent due 5.3% 5.8%
----------------------------------------------- ------- -------
Housing benefit Tenants partially/fully funded by housing
tenants benefit 27% 33%
----------------------------------------------- ------- -------
Universal credit Tenants partially/fully funded by universal
tenants credit 21% 23%
----------------------------------------------- ------- -------
Homes with gas certificates as % of those
Gas servicing needing one 99.95% 99.91%
----------------------------------------------- ------- -------
Repairs customer
satisfaction Customer satisfaction for completed repairs 83.5% 84.7%
----------------------------------------------- ------- -------
Overall Resident satisfaction with a service
Resident satisfaction received 76.4% 73.9%
----------------------------------------------- ------- -------
Key events and areas of focus
-- Extra care: During the financial year, we withdrew from
providing extra care services and sold 415 extra care units to
Housing 21 .
-- Building safety remedial works: Our commitment to ensuring
fire safety was prioritized in 2022/23, building on the work that
started last year . This work is partly funded by grant from the
Building Safety Fund, remediation commitments by original
contractors and our own budgeted provisions. Alongside these
remediation works we are taking the necessary steps to ensure that
we can meet all the requirements of the Building Safety Act 2022 as
the government's implementation timetable comes into effect.
ESG and our SFF
While our social and governance credentials remain strong,
investment in our homes is a key priority for Notting Hill Genesis.
We estimate that around 12,000 homes will require investment to
reach an EPC C level or better. These improvements are scheduled to
be delivered by 2030 and are expected to cost just over GBP20m.
To meet the government's objective of decarbonising all sectors
there is an expectation that our homes will need to be carbon
neutral by 2050. The current estimated cost of this is GBP700m
however costs and technology deployed are still uncertain. As such,
we have factored these costs (as well as the GBP20m related to EPC
C) into the final 20 years of our 30-year business plan.
By enhancing the accessibility of our Environmental, Social and
Governance (ESG) performance data, we are demonstrating to our
residents and other stakeholders the positive impact that we are
making against these goals. It underscores that by investing in our
organisation, stakeholders are contributing to positive social and
environmental impacts. We have also chosen to report our
environmental, social and governance (ESG) performance in line with
the Sustainability Reporting Standard for Social Housing (SRSSH),
published in November 2020.
We aim to develop new affordable and sustainable homes, as well
as improving the sustainability of our existing homes. Through our
strategic objectives we will carry out our mission to "build and
maintain quality affordable homes, creating diverse and thriving
communities." The needs and wellbeing of our residents remain core
to everything we do.
NHG has issued a sustainable finance framework which can be
accessed from our website.
Equality, diversity and inclusion
We will shortly publish our annual equality, diversity and
inclusion report, setting out the work we have completed over the
past year in this important area. The report focuses on activities
with and for both colleagues and residents, reflecting our ongoing
commitment to ensuring the make-up of our organisation reflects the
diverse communities with whom and in which we work.
Development and sales update
We plan to continue to expand our business through development
growth. We have set a target to deliver 5,000 new homes by 2028 by
delivering around 1,000 homes per year. We are on track to achieve
this goal with 1,465 under construction and capacity for a further
6,000 homes within the landbank. The programme is targeted to
deliver 70% regulated affordable homes.
The overall amount of money spent on new homes in 2022/23 was
GBP267m, a decrease of GBP68m in comparison to 2021/22 (GBP335m).
We are forecasting an increase to GBP399m in 2023/24.
The following table provides details of acquisitions, starts and
completions in 2022/23 compared to 2021/22.
Figure 2: Development programme as at 31 March 2023
Acquisitions Starts Completions
Tenure 2022/23 2021/22 2022/23 2021/22 2022/23 2021/22
--------- --------- --------- --------- --------- ---------
Low-cost rental 336 363 353 570 217 448
--------- --------- --------- --------- --------- ---------
Shared ownership 317 301 48 505 60 382
--------- --------- --------- --------- --------- ---------
Market rent - - - - 18 303
--------- --------- --------- --------- --------- ---------
Private sale - 222 - 310 - 5
--------- --------- --------- --------- --------- ---------
Joint ventures 44 - 58 - 164 208
--------- --------- --------- --------- --------- ---------
Total 697 886 459 1,385 459 1,346
--------- --------- --------- --------- --------- ---------
We started the financial year with 275 unsold homes and took
handover of an additional 60 homes during the year. As at 31 March
2023 only 32 homes were unsold. Our average sales time was 13.2
weeks.
Figure 3: Unsold homes as at 31 March 2023
Category Shared Private 2022/23 2021/22
ownership sale Total Total
Unsold homes as at 1 April 2022 215 60 275 548
---------- ------- ------- -------
Homes completed as originally intended 60 - 60 387
---------- ------- ------- -------
Homes transferred to London Living
Rent tenure - - - (76)
---------- ------- ------- -------
Homes sold on a plot by plot basis (246) (57) (303) (424)
---------- ------- ------- -------
Bulk sale to private investor - - - (160)
---------- ------- ------- -------
Unsold homes as at 31 March 2023 29 3 32 275
---------- ------- ------- -------
Treasury update
As at 31 March 2023 NHG Group had GBP1,145.4m of available
liquidity, comprising GBP1,098.3m of undrawn available loan
facilities and GBP47.1m cash. Our average life of drawn debt is
15.2 years and our average cost of drawn debt is 4.12%.
Figure 4: Group debt position as at 31 March 2023
Entity Facilities Drawn GBPm Undrawn GBPm
GBPm
Notting Hill Genesis 3,448.7 2,621.7 827.0
---------- ---------- ------------
Notting Hill Home Ownership
Limited 466.9 195.6 271.3
---------- ---------- ------------
Folio Treasury Limited 250.0 250.0 -
---------- ---------- ------------
GenFinance II plc 250.0 250.0 -
---------- ---------- ------------
Group 4,415.6 3,317.3 1,098.3
---------------------------- ---------- ---------- ------------
Figure 5: NHG debt maturity profile
Financial years Debt maturity Debt maturity
ending 31 March GBPm %
2024 31.6 1.1
-------------- --------------
2025 28.1 1.0
-------------- --------------
2026 25.0 1.0
-------------- --------------
2027 37.1 13.7
-------------- --------------
2028 313.0 16.6
-------------- --------------
2029-33 1,004.2 23.8
-------------- --------------
2034-43 1,065.2 24.3
-------------- --------------
After 2043 813.1 18.5
-------------- --------------
3,317.3 100.0
------------------ -------------- --------------
Our fixed / floating mix as at 31 March 2023 was as follows:
Target
Category Lower Central Upper Actual
------ ------- ------
Fixed 50% 75% 105% 100%
------ ------- ------ ------
Floating (5%) 20% 40% (2%)
------ ------- ------ ------
Inflation-linked 0% 10% 20% 2%
------ ------- ------ ------
As at 31 March 2023, our security and unencumbered asset
position was as follows:
Homes Security value
GBPm
Charged and allocated 38,331 7,450
-------- --------------
Numerical apportionment security
pool 2,130 357
-------- --------------
Unencumbered 17,213 3,491
-------- --------------
Under the GBP2billion secured note programme, 2,130 homes are
currently charged to the numerical apportionment security pool.
This trading update contains certain forward-looking statements
about the future outlook for NHG. Although the Directors believe
that these statements are based upon reasonable assumptions, any
such statements should be treated with caution as future outlook
may be influenced by factors that could cause actual outcomes and
results to be materially different.
Enquiries
Investor enquires in relation to this trading update should be
directed to:
Susan Hickey Ayo Laleye
Chief Financial Officer Financial Reporting Director
Email: Susan.Hickey@nhg.org.uk Email: Ayo.Laleye@nhg.org.uk
Telephone: 020 3815 0315 Telephone: 020 3815 1402
Media enquires in relation to this trading update should be
directed to:
Wayne Tuckfield
News and Media Manager
Email: Wayne.Tuckfield@nhg.org.uk
Telephone: 020 3815 0184
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