REG - Peabody Capital No 2 Peabody Trust. Peabody Capital PLC - Trading Update

Marriott InternationalAnnouncement

20/11/2024 08:15

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RNS Number : 8369M  Peabody Capital No 2 PLC  20 November 2024

Peabody Group (incorporating Peabody Trust, Peabody Capital PLC, Peabody
Capital No.2 PLC and TCHG Capital PLC)

This is an unaudited consolidated trading update for Peabody Group for the six
months ending 30 September 2024.

Highlights for Peabody Group

                                             Six months to 30 September 2024  Six months to 30 September 2023

 Homes owned and in management               109,106                          108,289
 Homes completed in the period               225                              654
 Homes in the course of construction         5,395                            5,782
 Capital investment in existing homes (£m)   97                               100
 Turnover (£m)                               486                              489
 Operating Surplus (£m)                      130                              131
 Operating Margin                            27%                              27%
 Overall surplus for the period (£m)         34                               41
 Drawn Debt (£m)                             4,955                            4,680
 Available Facilities (£m)                   1,078                            1,313
 Accessible Cash (£m)                        109                              71

 

Commenting on the results, Peabody's Chief Financial Officer, Phil Day said:
"Our strong financial base continues to support capital investment in homes
and places as well as in day-to-day spending to help our neighbourhood teams
provide improved local services to residents. Our plan to spend £2bn over
five years looking after and upgrading residents' homes is on track. We're
seeing positive progress and incremental improvements across a range of tenant
satisfaction measures in this financial year."

 

Financial performance

Our operating surplus remains stable for the first six months of the year
compared to last year, despite delays in practical completions on site
affecting the timing of receipts from our sales programme.

Turnover from our core operating activities is largely unchanged year-on-year
and we are reporting an operating margin of 27%. Our year-to-date rent
collection rate remains stable at 98%. Our social rents average £137 a week
and we continue to offer wide-ranging financial inclusion support for
residents. Following a recent successful awareness campaign, our income and
surpluses from staircasing are performing strongly - supporting people to own
more of their home.

We have made good progress during the year simplifying our operations and
Governance structures and continue to pursue opportunities to raise additional
capital to invest through the sale of non-core assets.  While the completion
of sales is progressing at a slower rate than hoped we expect to see a gradual
improvement in the second half of the current financial year and into the
next.

Investment in residents' homes

In the period to 30 September, we invested £97m in residents' homes which
included £23m on building safety, close to the £100m invested in the same
period last year. A further £93m was spent on repairs and maintenance
compared to £84m in the prior year. We remain both committed and on-track as
we progress through the second year of our five-year cycle in which we plan to
spend £2bn looking after and improving residents' homes.

New homes, development and sales

We invested £244m in our new homes programme over the last six months,
completing 225 new homes. Our starts on site this year will be substantially
lower than in previous years as we prioritise our already committed pipeline.
We currently have around 5,400 homes onsite under construction. Sales revenue
in the year to date is £27m with almost £160m of further sales already
exchanged or reserved.

Current levels of homes to be sold are as follows:

                      Reserved/Exchanged  Available
 Over 6 months        69                  59
 Between 3- 6 months  0                   0
 Under 3 months       0                   0

 

The timing of practical completion on development schemes has led to a
misalignment on the selling and marketing costs associated with new homes.
These are included in cost of sales for the period, while the sales receipts
for the reserved/exchanged homes are not accounted for whilst we await
completion.

Liquidity

We continue to retain strong access to liquidity with over £1.1bn of cash and
undrawn facilities available. Our gearing continues to be relatively low when
compared to peers and 74% of our borrowing is on a fixed rate basis. We have
over 41,000 properties not utilised for borrowing.

Ratings and certification

We are rated G1, V2 by the Regulator of Social Housing, and have yet to be
allocated a consumer standard rating. We continue to be rated A3 stable by
Moody's and A- negative outlook by S&P.

Performance, Priorities and Positive impact

Analysing the half-year 24-25 results of our Tenant Satisfaction Measures
(TSMs), we have seen a small improvement of around 1% across a range of areas
when compared to the full year 23-24 results. These include satisfaction on
the overall service provided by Peabody and on the quality and timeliness of
repairs. We recently introduced new contractual arrangements for repairs which
will support our local service delivery model. We continue to measure TSMs
each month and hope to report further progress at year end reflecting our
commitment to improving services for residents.

We've published our Environmental, Social, Governance (ESG) report 2023-24
which shows our progress and performance against the 48 metrics in the
Sustainable Reporting Standard (SRS).  Key performance indicators are below,
and the full report is available here:
https://www.peabodygroup.org.uk/sustainability/our-esg-report/
(https://www.peabodygroup.org.uk/sustainability/our-esg-report/) and
https://www.peabodygroup.org.uk/investors/our-reports-and-statements/
(https://www.peabodygroup.org.uk/investors/our-reports-and-statements/)

·    Created £12.7m of social value for residents and communities through
our contractors and suppliers.

·    Made hundreds of residents' homes easier to heat and keep warm, with
78.6% now having an energy efficiency rating of EPC C or above.

·    Ensured all new homes were as energy efficient as possible, with
98.4% having a rating of EPC B or above.

·    Spent £371m maintaining and improving residents' homes, which
contributed to a 3.6% increase in our carbon footprint. We're working hard to
reduce this going forward.

·    Invested £10m in the Peabody Community Foundation to help make
people healthier, wealthier and happier.

·    Worked to tackle food inequality by setting up the London Food
Insecurity Network with partners and opening new food pantries across the
capital.

·    Paid all 3,800 colleagues at least the Real Living Wage or London
Living Wage.

·    Provided or paid for training courses for 459 colleagues to progress
their careers or personal development.

During the period we've published several reports on our performance,
priorities and our positive impact.  These are available on our website:

·    Our Resident Review 23-24 is available here
https://www.peabody.org.uk/media/4s3dksit/residents-review_2023-24.pdf
(https://www.peabody.org.uk/media/4s3dksit/residents-review_2023-24.pdf)

·    Our annual report 23-24 is available here
https://www.peabodygroup.org.uk/investors/annual-report-2024/
(https://www.peabodygroup.org.uk/investors/annual-report-2024/)

·    Our Sustainable Finance Framework 2024 sets out how we allocate funds
to support our strategic priorities of getting the basics right, supporting
residents and colleagues, and becoming a more sustainable Peabody.
https://www.peabodygroup.org.uk/media/ka0fbquu/sustainable-finance-framework.pdf
(https://www.peabodygroup.org.uk/media/ka0fbquu/sustainable-finance-framework.pdf)

·    Peabody Community Foundation's annual report shows the positive
difference we're making in partnership with local people.
https://www.peabodygroup.org.uk/our-work/peabody-community-foundation-pcf/our-pcf-report/
(https://www.peabodygroup.org.uk/our-work/peabody-community-foundation-pcf/our-pcf-report/)

·    We published Looking after Thamesmead: The story of our impact
2018-2023
(https://www.peabodygroup.org.uk/media-centre/news/thamesmead-news/looking-after-thamesmead/)
earlier this year. It highlights our "whole place" approach to regeneration
and investment in the town.

 

Statement of Comprehensive Income - Peabody Group

 £ million                                        Six months to 30 September 2024  Six months to 30 September 2023

 Turnover - from core operations                  459                              414
 Turnover - from sales                            27                               75

 Total Turnover                                   486                              489

 Operating Costs                                  (356)                            (332)

 Cost of Sales                                    (27)                             (62)

 Surplus on staircasing/disposal of fixed assets  27                               36

 Operating Surplus                                130                              131

 Net Interest Costs                               (96)                             (90)

 Surplus for the period                           34                               41

 Operating Margin                                 27%                              27%

 

Note: Figures quoted in the update are based on unaudited management accounts,
which are subject to review and further adjustments.

Contact: Anthony Marriott, Director of Treasury & Corporate Finance or Ben
Blades, Assistant Director Corporate Affairs.

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