REG - Peabody Cap - Half-year Report
30/11/2021 08:15
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RNS Number : 9412T Peabody Capital PLC 30 November 2021
Trading update for the 6 months to September 30, 2021
This is an unaudited, consolidated trading update for Peabody for the six
months ending 30 September 2021.
Trading highlights for the Group
6 months to September 2021 6 months to September 2020
Highlights
Homes completed in the period 502 501
Homes started in the period 801 390
Turnover (£m) 346 299
Operating surplus (£m) 124 103
Operating margin 36% 34%
Surplus for the period (£m) 87 67
Highlights September 2021 March 2021
Homes in management 67,732 67,331
Drawn debt (£m) 2,963 2,911
Available facilities (£m) 1,116 1,278
Cash (£m) 110 127
Eamonn Hughes, CFO of Peabody, made the following comments on the half-year
results:
"This is a strong financial performance for the first half of the year, with
overall operating margin continuing to be in line with pre-pandemic levels. We
expect the trading environment to become more difficult in the second half of
the year as we absorb increasing repairs and maintenance costs, but we have
built a strong base level of performance to date and expect full year
performance to be in line with budget for key metrics.
We are making good progress on our fire and building safety programmes. By
closely managing all our expenditure, we are prioritising the safety of our
residents and improving the quality of our housing stock and continue to
direct resources to building safety spending, planned improvement works and
responsive repairs activity. This includes catching up on works we were unable
to undertake in 2020 due to Covid restrictions.
As expected, operating costs are higher than in the same period last year. The
increase in revenue is largely due to the volume of completions of new build
sales in the first half of the year. Rent arrears, which are in line with
expectations, are being carefully managed and monitored.
Our balance sheet has strengthened over the period and we retain strong
liquidity, with £1.2 billion of cash and undrawn facilities in place to fund
our pipeline of new affordable homes. We continue to have very low gearing
compared to the sector whilst our interest cover, including capitalised
repairs, is healthy at 323%.
We have also continued to make significant progress in development and
place-making, having started work on over 800 new homes in the last 6 months.
We completed the first 130 new homes in South Thamesmead and submitted
planning applications to deliver over 2,000 affordable homes at Dagenham and
Holloway.
In the last six months Peabody has remained at the forefront of ESG in the
sector through publishing our first ESG report, a refreshed sustainability
strategy and completing two sustainable linked loans."
Building safety
We have kept up with increased demand for responsive repairs as customer
confidence has returned following the periods of national lockdown. Investment
in our stock continues to be a priority informed by stock condition data and
is progressing well despite some delivery challenges linked to supply of
labour and materials. We have continued to prioritise the safety of our
residents by proactively investigating and remediating our highest priority
buildings while also maintaining a 95% compliance rate for completing all new
Fire Risk Assessments within one month.
Progress of Development programme
Our development programme is making good progress. We carefully manage risk
through continuous evaluation of the pipeline and by maintaining flexibility
on the mix of tenures within schemes.
In May 2021 we completed our acquisition of the 45-acre land site comprising
the former Ford Stamping and Tool Operations site in the London Borough of
Barking and Dagenham. Our vision is to build more than 3,000 new homes on
this site over several years and the planning process for this is underway.
The acquisition cost was largely funded through our strategic partnership with
the Mayor of London.
Our sales portfolio is under constant review. Trading has been steady
throughout the last six months, with buyers taking advantage of the Stamp Duty
holiday whilst available and margins at consistent levels with those seen in
the second half of 2020-21. At 30 September 2021 the value of unsold units was
£42.9m (£48.9m as at 31 March).
Unsold new dwellings Reserved /
exchanged Available Total
3 - 6 months 30 53 83
Over 6 months 25 77 102
Ratings update
On 29 November Moody's reaffirmed our A3 (stable) rating, and we have an A-
(stable) rating from S&P Global. These ratings reflect the continuing
strength of the Peabody balance sheet, its low level of gearing, strong
liquidity and the robust business plan. We remain committed to holding a
credit rating within the A band.
Peabody continues to have a G1 (Governance) and V2 (Viability) rating from the
Regulator of Social Housing.
ESG section
Peabody remains at the forefront of promoting ESG credentials for the sector.
In September as an early adopter we published our first detailed report under
the Sustainable Reporting Standard for Social Housing
(https://www.peabody.org.uk/media/15382/esg-report-2021-final.pdf
(https://www.peabody.org.uk/media/15382/esg-report-2021-final.pdf) ) as well
as our Sustainability Strategy
(https://www.peabody.org.uk/about-us/our-performance/sustainability). We
remain committed to improving both our reporting and our performance under a
number of ESG related criteria. We also completed two sustainability linked
loans in the last six months, which support our continuing delivery of new
affordable homes, with metrics linked to improving the energy efficiency of
homes, increasing electric vehicle charging points on Peabody estates and a
fellowship scheme to support grassroots organisations in our communities.
Merger with Catalyst Housing
On 30 July 2021 Peabody and Catalyst Housing announced proposals to join
together to create a better, locally focused organisation which would deliver
significant benefits for residents, providing the scope to invest and innovate
more in services, homes, communities, technology and people. The process to
complete this by 1 April 2022, with Catalyst Housing joining Peabody Group as
a subsidiary, remains on track.
Brendan Sarsfield stepped down as Chief Executive on 30 September 2021. Ian
McDermott took over as Chief Executive on secondment from Catalyst Housing
with effect from 1 October 2021 and will assume the full permanent role on 1
April 2022.
Statement of Comprehensive Income
6 months to September 2021 6 months to September 2020
£m £m
Turnover - from core operations 254 248
Turnover - from sales 92 51
Turnover 346 299
Operating costs 186 174
Cost of sales 80 41
Surplus on staircasing and disposal of fixed assets 44 19
Operating surplus 124 103
Net interest costs 37 36
Taxation - -
Surplus for the period(3) 87 67
Operating margin 36% 34%
Sales margin % 13% 20%
EBITDA - MRI %(1) 323% 311%
Statement of Financial Position
September 2021 March 2021
£m £m
Housing properties 7,159 7,004
Other tangible fixed assets(3) 551 557
Other investments 134 141
Net current assets 236 143
Total assets less current liabilities 8,080 7,845
Capital and reserves 3,471 3,382
Loans > one year 2,729 2,678
Other long term liabilities 1,880 1,785
Reserves and long term liabilities 8,080 7,845
Gearing %(2) 36% 34%
1 - operating surplus excluding depreciation and amortisation, less
capitalised repairs / interest expense
2 - net debt / non-current assets
3 - revaluations of investment properties are performed at year end only
Enquires
Please contact Anthony Marriott, Director of Treasury & Corporate Finance
at anthony.marriott@peabody.org.uk (mailto:anthony.marriott@peabody.org.uk)
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