REG - Incommunities Trsry. - Half-year Financial Report

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RNS Number : 2084L  Incommunities Treasury PLC  11 December 2025

Incommunities Limited trading update and unaudited financial results for the
period ended 30 September 2025

Incommunities Treasury Plc's parent company, Incommunities Limited (IC), today
announces the release of its unaudited half-year financial statements for the
period ended 30 September 2025.

IC is one of the largest Registered Providers in Yorkshire, owning and
managing over 22,000 homes across Bradford and Huddersfield.

Financial and Operational Highlights

The Group delivered strong, well-managed financial and operational performance
in the first half of the year. Results remain in line with management
expectations and reflect the Group's disciplined approach to financial
management, investment planning and service improvement.

Highlights include:

·      Net surplus of £7.0m, against £5.7m for the same period last
year, £1.5m ahead of budget.

·      Interest cover of 305%, against 307% for the same period last year,
9.7% ahead of budget

·      Regulatory EBITDA MRI interest cover of 114.8% against 110.3% for
the same period last year.

·      Regulatory Gearing of 60.2% against 58.7% for the same period last
year

·      Drivers of performance compared to budget include:

o  Lower interest costs (£0.6m), supported by refinancing activity.

o  Increased surplus from property sales: £1.0m

§ First-tranche shared ownership sales: (£0.2m)

§ Fixed asset sales: £1.2m

·      Investment programme: YTD spend of £9.4m, against £6.8m for the
same period last year, reflecting continued investment in improving the
quality of tenants' homes.

·      Development programme: YTD spend of £15.3m, against £15.4m for
the same period last year, supported by £0.3m from first tranche sales and
£8.3m in grant income.

·      Liquidity remains strong with £11.1m cash at period end and £140m
of undrawn facilities.

·      All funder covenants have been met.

 

 KPI performance:
                                             Annual Target  P6 Actual
 Regulatory Metrics                          25/26          25/26
 Reinvestment                                14.9%          4.6%
 New Supply Delivered - Social Housing       1.1%           0.5%
 New Supply Delivered - Non-Social Housing   0.0%           0.0%
 Gearing (Net Debt / Housing Assets)         64.2%          60.2%
 EBITDA-MRI Interest Cover                   92.6%          114.7%
 Headline Social Housing CPU                 £5,457         £5,234
 Operating Margin - Social Housing Lettings  14.1%          14.2%
 Operating Margin - Overall                  14.2%          14.3%
 Return on Capital Employed                  3.7%           2.3%

                                             September (6 monthly)
                                             Minimum        Actual
 Covenant Compliance                         25/26          25/26
 Barclays - Interest Cover                   140%           305%
 ABN AMRO - Interest Cover                   110%           355%
 NatWest/RBS - Interest Cover                150%           305%
 NatWest/RBS - EBITDA                        £14m*          £21.3m
 Barclays - Gearing                          60%            45%
 ABN AMRO - Gearing                          65%            45%
 NatWest/RBS - Gearing                       65%            45%
 *£28m pa pro-rated

 

Business Outlook

Despite a challenging economic backdrop, IC has demonstrated strong financial
resilience at the mid-year position. The Group's upgrade to G1 continues to
demonstrate the strength of its governance, strategic oversight, and risk
management approach.

The Corporate Strategy launched in April 2024 provides a clear direction for
the next five years, centred around our vision: to create the best customer
experience to improve everyday lives. With customers at the heart of the
strategy, delivery is focused on three priority areas: Homes, Services and
Communities, supported by a comprehensive change programme strengthening
service quality and operational efficiency.

Operationally, IC has made significant progress in addressing cases of damp
and mould, reducing reported cases through targeted interventions and improved
processes. Work continues to drive further reductions. The Group has a high
proportion of stock condition surveys completed within the last 5 years to
enhance understanding of asset quality. The programme expectations - 85%
within by March 26, and 100% by Dec 26 - enable data-driven long-term
investment planning and support the delivery of our sustainability ambitions.

IC enters the second half of the year with a stable financial platform, strong
liquidity and clear strategic momentum, positioning the organisation well to
continue delivering safe, high-quality homes and services for its customers.

Looking ahead, the Group is preparing to build on this progress in the
remainder of the financial year. Headline full-year expectations include:

·      Delivery of 246 new homes with total development expenditure of
£52.4m compared to 248 new homes and £49.5m of spend in the previous year.

·      £3m investment in damp and mould interventions, £0.5m lower than
last year. This reduction reflects improved diagnosis, preventive measures,
and maturing processes, with spend expected to gradually decrease over the
coming years as proactive approaches further limit recurrence.

·      £4m net sustainability investment, comprising £9m capex supported
by £5m grant funding. The net reduction compared to last year (£6.3m capex,
£1.3m grant) is a direct result of the successful application for Wave 3 of
the Warm Homes Fund and subsequent refinements to programme phasing. A
significant acceleration in spend and delivery is expected over the next two
years.

·      Approximately £15m allocated to core component replacements, £1m
higher than the previous year. This investment is expected to continue on an
upward trajectory, reaching around £18m by 2029 in line with stock
intelligence and long-term asset management plans.

·      £4m is planned for Fire Risk Assessment compliance works, doubling
last year's allocation of £2m, reflecting the continued prioritisation of
building safety across the portfolio

·      Regulatory and ratings updates expected in early 2026.

Economic Outlook

The UK Government has confirmed that housing associations will be permitted to
increase rents by CPI + 1% annually for ten years from April 2026, providing
long-term income visibility and supporting sector financial resilience. The
Government has also announced initiatives to accelerate housebuilding through
streamlined planning processes and increased grant funding under the Social
and Affordable Homes Programme. While these measures are positive, delivery of
new social housing continues to face challenges arising from cost inflation,
labour constraints and elevated interest rates.

Against this backdrop, IC strategic change programmes are expected to continue
driving improvements in operational and customer KPIs. The Group's V2
viability grading from the Regulator of Social Housing (a compliant grade)
confirms IC has the financial capacity to manage a reasonable range of adverse
scenarios, while highlighting the importance of strong risk management. The
regrade reflects a deliberate decision to prioritise increased investment in
existing homes, supported by a programme of comprehensive stock condition
surveys that will identify and inform future investment priorities.

Looking ahead, IC maintains a cautiously optimistic outlook for 2026-27, with
continued focus on maintaining and improving existing housing stock, advancing
sustainability initiatives, and navigating financial and regulatory pressures
while making the most of rent policy certainty and enhanced government
support.

Appendix

 Statement of Comprehensive Income

                                            September (6 monthly)     March (Annual)
                                            Actual       Actual       Budget     Actual
                                            25/26        24/25        25/26      24/25
 Income
 Rent & Service Charges                     60,258       57,407       121,107    115,063
 Other Income                               5,151        3,512        12,823     9,333
 Amortised Grants                           590          470          1,341      1,180
                                            65,999       61,389       135,271    125,576
 Expenditure
 Core Operating Costs                       (47,321)     (44,611)     (98,728)   (94,259)
 Depreciation                               (9,219)      (8,152)      (17,345)   (17,480)

 Net interest                               (5,985)      (5,331)      (13,235)   (10,755)
 Surplus on disposal (current & fixed)      3,573        2,438        3,239      4,488
                                            (58,952)     (55,656)     (126,068)  (118,006)

 Net Surplus                                7,047        5,733        9,203      7,570

 FRS102 Pension - Actuarial gain            0            0            0          767
 Gift Aid                                   0            0            0          0
 Corporation tax                            0            0            0          0
 Total Comprehensive Income                 7,047        5,733        9,203      8,337

 

 Statement of Financial Position

                                                         September (6 monthly)          March (Annual)
                                                         Actual              Actual     Budget     Actual
                                                         25/26               24/25      25/26      24/25
 Fixed Assets                                            566,747             524,955    612,103    554,728
 Current Assets                                          24,884              18,794     20,281     24,552
 Current Liabilities                                     (17,215)            (21,158)   (23,083)   (23,827)
 Net Current (Liabilities) / Assets                      7,669               (2,364)    (2,802)    725
 Total Assets Less Current Liabilities                   574,416             522,591    609,301    555,453
 Creditor: Amounts Falling Due After More Than One Year  (455,278)           (412,652)  (448,007)  (443,362)
 Provisions For Liabilities:
 Pension Scheme - Defined Benefit Liability              (1,099)             (1,405)    (1,099)    (1,009)
 Other Provisions                                        0                   (40)       0          0
 Total Net Assets                                        118,039             108,494    120,195    110,992

 Income And Expenditure Reserve                          118,039             108,494    120,195    110,992
 Total Reserves                                          118,039   108,494              120,195    110,992

 

Disclaimer

These materials have been prepared by IC solely for use in publishing and
presenting its results for the six months ending 30 September 2025.

These materials do not constitute or form part of and should not be construed
as, an offer to sell or issue, or the solicitation of an offer to buy or
acquire securities of IC in any jurisdiction or an inducement to enter into
investment activity. No part of these materials, nor the fact of their
distribution, should form the basis of, or be relied on or in connection with,
any contract or commitment or investment decision whatsoever. Neither should
the materials be construed as legal, tax, financial, investment or accounting
advice.

These materials contain forward-looking statements regarding IC's financial
condition, results of operations, business, and future prospects. By their
nature, forward-looking statements involve risk and uncertainty because they
relate to future events and depend on circumstances that may change. There are
several factors that could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking
statements, including many factors outside IC control.

 

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