REG - Stonewater Funding - Half-year Report

ABN Amro Bank NVAnnouncement

30/12/2024 16:15

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241230:nRSd6420Ra&default-theme=true

RNS Number : 6420R  Stonewater Funding PLC  30 December 2024

Half-Year Results Update

 

Stonewater Funding plc

STONEWATER H1 2024/25 RESULTS UPDATE

Stonewater's Half-Year Results Update covering the period to 30 September 2024

 

Chief Financial Officer's Statements

 

As we look ahead to our 10(th) anniversary celebrations in January 2025, we
are pleased to report our financial results for the six months to
end-September 2024.

 

These interim, unaudited results highlight our underlying performance,
reflected in our key indicators on operating margin, sales margin and interest
cover since the end of our previous financial year 2023-24.

 

Over the past ten years, Stonewater has grown to become one of the largest
social housing providers in the UK, with 40,000 homes for more than 93,000
customers. Our mission to offer good quality homes and services for people
whose needs are not met by the open market remains at the heart of everything
we do.

 

Stonewater has a relatively young stock profile and we have an ongoing
development programme of affordable homes, which has been moderated reflecting
the broader economic conditions.

 

There has been significant political change in the UK in the past six months
and whilst we welcome the new Government's commitment to build 1.5m homes, we
note that funding remains a critical issue in the affordable housing sector
and await further clarity on this.

In April, we were delighted to agree £254m funding package with five lenders,
which will support our investment in new and existing affordable homes.
Provided by both existing funders, including Barclays, NatWest and Nationwide,
as well as new partners, ABN AMRO and HSBC, the new revolving credit
facilities run for 5 to 10 years.

Our financial strength, confirmed by the affirmation of our top G1 and V1
ratings for governance and viability from the Regulator of Social Housing in
November 2024, allows us to continue to invest in existing homes, provide new
and much-needed affordable, energy efficient homes and support our customers.
We are yet to be assessed for the Regulator's new consumer gradings

Given wider challenges in the sector, the change of credit rating from
Standard & Poor's to A- was anticipated. We recognise that our commitment
to invest in our existing homes has affected this rating but are confident
that the work we have planned will improve the homes we manage and help
customers live in warmer, safer homes. The outlook on our credit ratings is
now stable.

We're continuing to grow as well through partnerships and home purchases.
Bristowe (Fair Rent) Housing Association has completed a transfer of
engagements of 79 homes in the Bristol area to the Stonewater Group. Our
partnership with 1,600-home Mount Green Housing Association in Surrey and
North Sussex was finalised earlier in the year, as was the transfer of
engagements of Greenoak Housing Association to Stonewater 5, part of the
Stonewater Group.

Our journey to net zero-carbon by 2050 is well under way. In May, we retained
our SHIFT Gold award for environmental improvements for the third year
running, with a 65% rating being a significant milestone in our journey to
SHIFT Platinum, which no other social housing provider currently holds.

We are into the second year of delivery of our retrofit programme, part
funded by Wave 2.1 of the Social Housing Decarbonisation Fund. As part of this
project, we will be making energy efficiency improvements to over 1,000
across the Midlands and South of England. Of these over 800 homes will be
part funded through the Social Housing Decarbonisation Scheme.

I continue to feel great pride in the work done by our dedicated colleagues in
the first half of 2024-25. Stonewater's Vision, for everyone to have the
opportunity to have a place that they can call home, continues to resonate in
our ongoing national housing crisis.

 

Anne Costain

Chief Financial Officer

 

Financial Performance

Stonewater is pleased to report its consolidated financial results for the six
months ended 30 September 2024 (2024-25 HY). These figures are unaudited and
for information purposes only.

 

                                        2024/25 HY                                        2023/24 HY                                         2023/24 Full Year
                                        Actuals                                           Actuals                                            Actuals
 Statement of comprehensive income      £'000                                             £'000                                              £'000
 Turnover from social housing lettings                    133,273                                             115,526                        235,702
 Total turnover                                           152,768                                             133,361                        271,513
 Operating surplus*                                         33,212                                              35,593                       51,863
 Surplus after interest                                       2,581                                             12,182                       10,209

 

*The overall reduction in operating surplus is a combination of lower gains
from asset disposal, specifically the sale of fewer staircasing units, and
increased operational costs in areas such as salaries, service charges, and
repair & maintenance.

 

                                          2024/25 HY  2023/24 HY  2023/24 Full Year
 Operating margins                        Actuals     Actuals     Actuals
 Overall operating margin                 20.6%       24.9%       21.1%
 Operating margin on first tranche sales  12.1%       15.5%       20.4%
 Operating margin on asset disposals      43.5%       48.5%       49.3%

 

                                   2024/25 HY  2023/24 HY  2023/24 Full Year
 Key financial ratios              Actuals     Actuals     Actuals
 EBITDA MRI interest cover(1)      86.6%       145.3%      88.0%
 EBITDA interest cover ratio       1.6         1.9         1.7
 Social housing interest cover(2)  108.4%      101.0%      120.7%
 Gearing(3)                        51%         49.2%       49.3%

( )

(1)The EBITDA MRI interest cover shown is calculated as (Operating surplus
overall -Amortised government grant Interest receivable - Capitalised major
repairs expenditure + Depreciation) / Net interest paid.

(2) The social housing letting interest cover is calculated as Operating
surplus on Social housing lettings / Net interest paid.

(3) Gearing is calculated as (Short-term loans + Long-term loans - Cash and
cash equivalents) / (Housing properties at cost - work in progress).

 

 Liquidity                       2024/25 HY  2023/24 HY
 Cash and undrawn facilities     £344m       £445m
 18 month liquidity replacement  £240m       £231m

 

 Ratings                2024/25 HY            2023/24 HY
 S&P credit rating      A - (stable outlook)  A (negative outlook)
 RSH regulatory rating  G1/V1                 G1/V1

 

Operational Performance

 

                                       2024/25 HY  2023/24 HY  2023/24 Full Year
 Metric                                Actuals     Actuals     Actuals
 Overall customer satisfaction         87.3%       82.5%       83.5%
 Gross arrears                         4.8%        5.3%        5.0%
 Void loss                             1.0%        1.3%        1.2%
 New homes                             437 units   378 units   1,185 units
 First tranche sales                   162 units   135 units   282 units
 Capital investment in new homes       £89.4m      £135.5m     £266m
 Capital investment in existing homes  £8.7m       £11.5m      £34.4m

Donations, grants, mergers and acquisitions

·    Stonewater has made £0.9m donation in June 2024 to its charity
partner, the Longleigh Foundation.

·    Stonewater has received £16m of grant delivered under the Strategic
Partnership Programme (SPP) 2 programme in the first quarter and will be
receiving an additional £18m for the second quarter.

·    Stonewater completed the Transfer of Engagements from Bristowe
Housing Association and Green Oak Housing Association into Stonewater (5)
Limited in September 2024.

 

Environmental Performance

·    EPC Band ratings over the first half year period:

o 262 new homes built to EPC Band B or above, which represents 99.6% of all
new homes built.

o 143 homes were retrofitted to C or above.

 

·    We are creating an Asset Climate Risk Assessment tool, highlighting
what the climate risks are for Stonewater and our customers. In order to
mitigate these risks, we are developing projects such as: working with
communities to increase biodiversity in key areas; exploring opportunities to
install water efficiency devices in areas impacted by water and nutrient
neutrality; provide water efficiency advice to those at risk from drought.

 

·    We celebrated our 7000th newly built home in July 2024. This home was
part of the 152 brand new homes to the old Leeds City College campus in
Horsforth which will not use gas as part of our work to meet net zero targets.
The homes feature air source heat pumps, solar panels and electric vehicle
charging points to help future-proof them for the benefit of both customers
and the environment.

·    We have introduced a training programme for customers who are
interested in learning about sustainability, whether for personal interest or
to help upskill in their job. It has been organised as part of
Stonewater's Greenoak Centre of Excellence (https://www.stonewater.org/gcoe/)
 initiative.

 

Change in Board and management

Jane Scott joined the Stonewater Board on 1 October 2024, replacing Claire
Kearney. Jane is an experienced business leader who specialises in information
technology and digital transformation.

ENDS

 

 

Find us at www.stonewater.org

or follow us on

X (Formerly known as Twitter)

Facebook

LinkedIn

If you'd like more information about Stonewater, please get in touch with us
by emailing investor.relations@stonewater.org
(mailto:investor.relations@stonewater.org) .

Disclaimer

The information contained herein (the "Trading Update") has been prepared by
Stonewater Limited (the

"Parent") and its subsidiaries (the "Group"), including Stonewater Funding
plc, (the "Issuer") and is for information purposes only.

The Trading Update should not be construed as an offer or solicitation to buy
or sell any securities issued by the Parent, the Issuer or any other member of
the Group, or any interest in any such securities, and nothing herein should
be construed as a recommendation or advice to invest in any such securities.

Statements in the Trading Update, including those regarding possible or
assumed future or other performance of the Group as a whole or any member of
it, industry growth or other trend projections may constitute forward-looking
statements and as such involve risks and uncertainties that may cause actual
results, performance or developments to differ materially from those expressed
or implied by such forward-looking statements. Accordingly, no assurance is
given that such forward-looking statements will prove to have been correct.
They speak only as at the date of the Trading Update and neither the Parent
nor any other member of the Group undertakes any obligation to update or
revise any forward-looking statements, whether as a result of new information,
future developments, occurrence of unanticipated events or otherwise.

None of the Parent, any member of the Group or anyone else is under any
obligation to update or keep current the information contained in the Trading
Update. The information in the Trading Update is subject to verification, does
not purport to be comprehensive, is provided as at the date of the Trading
Update and is subject to change without notice. No reliance should be placed
on the information or any projections, targets, estimates or forecasts and
nothing in the Trading Update is or should be relied on as a promise or
representation as to the future. No statement in the Trading Update is
intended to be an estimate or forecast.

No representation or warranty, express or implied, is given by or on behalf of
the Parent, any other member of the Group or any of their respective
directors, officers, employees, advisers, agents or any other persons as to
the accuracy or validity of the information or opinions contained in the
Trading Update (and whether any information has been omitted from the Trading
Update). The Trading Update does not constitute legal, tax, accounting or
investment advice.

 

www.stonewater.org (http://www.stonewater.org)

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  IR FLFIEFRLIVIS