REG - Aster Treasury Plc - Trading Statement - 6 months to 30 September 2025

NTTAnnouncement

12/11/2025 11:00

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RNS Number : 2454H  Aster Treasury PLC  12 November 2025

ASTER GROUP

Trading Update - 30 September 2025

12 November 2025

Aster Group issues its unaudited Group trading update for the six months ended
30 September 2025, with comparatives to the audited financial statements for
the 12 months ended 31 March 2025.

Highlights:

·    Despite another challenging period we've made a strong start to the
year. We achieved profit before tax of £21.7m for the six months to
September, £3.1m ahead of the same period last year and ahead of budget.
Operating profit before impairment and pension cessation costs was £42.2m
also ahead of budget and prior year.

·    In the first six months of the year, investment in our stock,
although below budget, reached £54.7m, ahead of the £51.9m spent in the same
period last year and compares to £115.0m spent for the full year to March
2025.

·    We completed 457 handovers within the first six months, exceeding
delivery levels for the same point last year. We've also started on 11 sites
which will deliver 310 homes.

·    First tranche sales market demand is still strong but hampered by
delays in development handovers and reflect lower average initial shares sold.
First tranche sale income was £16.2m, £2.1m lower than this time last year
and behind budget. Although average initial shares are lowering with averages
at 31.2% this demonstrates the strength of this tenure in its ability to be
flexible to help manage the change in the economic climate for our customers.

·    Our work on asset management has performed well, with profits from
our asset disposal programs at £15.5m, £6.6m ahead of this time last year.

·    We've broken ground on our largest-ever land-led development to date
- Bargates in Christchurch. This regeneration project will deliver 169 new
homes on a previously brownfield site.

·    Our community land trust (CLT) programme continues to grow at pace.
We have broken ground on two CLT schemes including Transition Homes in
Dartington for 39 social rent homes which will all be rated EPC A.

·    We pride ourselves on offering a local, dedicated and skilled service
centred around our customers' evolving and varied needs. We have delivered a
major refresh to our Customer Voice governance structure, with the launch of
the new Customer Voice Committee (CVC) in June. Replacing the Customer and
Community Network (CCN), it empowers our customers to be closer to strategic
decision-making and helps us align with the new Consumer Standards and
regulatory expectations. The CVC oversees our modernisation and improvements
including complaints, service reviews, and customer engagement activities.

·    We continue to find ways to engage with our customers so they can
codesign and shape our offer. This year we have introduced a customer census
project on our digital platform, MyAster. This allows our customers to update
their information for a more personalised service. Additionally, a six-month
local customer panel pilot in Dorset has provided valuable feedback to inform
future local engagement initiatives.

·    This financial year we have already supported 807 customers (over
1,200 interactions) through our Financial Wellbeing Team. Through our work on
income maximisation, we secured over £2.7m of additional income for those
customers, primarily through unclaimed benefits and other sources of financial
support.

·    We know that repairs are a key priority for our customers, and we've
made several improvements so far this year. Workshops have helped shape our
future repairs model, with action plans now being implemented. We're using
more sophisticated technology to manage our repairs and estate inspections;
improving mobile access and centralising asset data.

·    For the past 12 months Aster has taken a very proactive approach in
preparation for the introduction of Awaab's Law in October 2025. Although
Aster had an existing process in dealing with Damp, Mould and
Condensation (DMC) incidents, it completely reviewed this against the
government's new guidelines covered under Awaab's Law. As such Aster now has
implemented a robust process that will track the incident from start to
completion, exceeding the government's guidelines on timescales. We have also
undertaken an internal audit to ensure we have in place everything required,
which also gave us a positive outcome. We have created new dashboards to give
us full reporting and visibility that will also be used to report back to the
regulator. We have taken on a dedicated team of both internal trades
operatives and back-office staff, all trained in identifying and dealing with
DMC, and have further bolstered support with additional contactors. We are
committed to deal with all incidents in a robust and customer centric way.

·    We continue to work closely with colleagues to improve how we work.
This year, we refreshed The Aster Way to further define our inclusive and
engaging culture - one where people can thrive - aligned with the Chartered
Institute of Housing's Code of Conduct, our evolving expectations, and the
professional standards we all adhere to. We've launched a new Culture Handbook
that brings together our story, strategy, The Aster Way, and The Aster Offer
in one accessible resource. Our commitment to diversity and inclusion is
reflected in the launch of EnAble, a magazine led by our Disability Confident
network. We've also completed a colleague census to strengthen our people
data, enabling better decisions and a more inclusive workplace. We're
advancing our workforce planning to ensure we have the right skills and
capacity for today and the future, seizing opportunities and mitigating risks
as our business and sector evolve. Our leadership development programme now
includes a new initiative for the Executive Board and Senior Leadership Team,
focused on self-reflection, accountability, and neuroscience-informed
practice.

·    We've continued our work towards the development, consultation and
publication of our new Corporate Sustainability Strategy. Further to the
success of our Warm Homes: Social Housing Funding bids, we've started a
three-year retrofit programme, which will upgrade hundreds of homes across our
portfolio. This is supplemented by our planned maintenance programme and other
ongoing projects which are seeing us make sure our homes retain their heat and
be comfortable for our customers and replace legacy systems with more modern
solutions. We're also replacing 94 vehicles with lower emission models, at
least 15 of which will be electric vehicles - all part of our transition to a
low and zero emission fleet.

·    Enham Trust continues to support disabled people to live, work and
enjoy life, as independently as possible. This year we have been progressing
our long-term ambition to create a vibrant and integrated community that is
inspiring and inclusive including plans to upgrade key buildings in the
village. So far this year we have invested £2.9m as part of our plan to
stabilise the charity and secure its long-term future. Through external
funding and volunteer support we've created a community orchard, walled
garden, and sensory garden as a welcoming space for village residents. This
initiative reconnects Enham Trust with the local community, offering an
accessible environment that encourages self-help groups to maintain and enjoy
the space together.

·    Our 3(rd) party logistics at Enham (3PL) is a social enterprise,
providing supported employment to people with physical, learning and mental
disabilities. We provide services such as picking, packing and storage to a
number of well-known brands and have managed to grow our supported employment
team by a further twelve people so far this year. Our Choices Activity
programme continues to deliver the charity's mission by delivering a large and
diverse range of accessible and inclusive activity sessions. Demand for
Choices is consistently oversubscribed so we aspire to grow so we can enable
more disabled people the chance to participate. Plans are also in development
to grow our gardening and green spaces work, to again increase the number of
opportunities for supported employees.

·    So far this year, the Aster Foundation has raised £126,000 and
supported over 1,800 people across the three most significant causes and
consequences of poverty:

o  920 have been supported with their mental health and wellness;

o  82 have been supported to move into work; and

o  807 have been supported with financial wellbeing and inclusivity.

Financial and operating performance

Unaudited profit before tax for the six months ended 30 September 2025 was
£21.7m. Housing properties (net of depreciation) have increased to £2,621m
from £2,541m at 31 March 2025.

 Consolidated Statement of Comprehensive Income (£000)                       Six months to 30 September 2025  Six months to 30 September 2024  12 months to 31 March 2025
                                                                             (unaudited)                      (unaudited)                      (audited) *
 Turnover                                                                    163,685                          158,586                          329,852
 Operating costs                                                             (136,992)                        (130,123)                        (276,732)
 Surplus on sale of housing property, plant and equipment                    15,503                           8,885                            26,056
 Increase in fair value of investment properties                             -                                -                                1,502
 Operating profit before impairment and pension cessation                    42,196                           37,348                           80,678
 Reversal/(Impairment) of housing assets and financial assets                15                               (38)                             (4,332)
 LGPS cessation - charge                                                     -                                -                                (29,045)
 Operating profit                                                            42,211                           37,310                           47,301
 (Loss) on disposal of other property, plant, equipment                      -                                -                                (90)
 Donations received                                                          -                                -                                455
 Share of (loss) in joint ventures                                           (962)                            (1,305)                          (365)
 Net finance expense                                                         (19,589)                         (17,397)                         (35,589)
 Profit before tax for the period                                            21,660                           18,608                           11,712

 Other comprehensive income (OCI) for the period:
 LGPS cessation - actuarial gains                                            -                                                                 28,632
 Effective cash flow hedge (loss)/gain                                       (367)                            2                                1,724
 Total comprehensive income for the period (before tax and other OCI)        21,293                           18,610                           42,068

 Financial indicators                                                        Statutory                        Statutory                        Statutory/

                                                                                                                                               Underlying
 Operating margin (excluding surplus on sale of housing property, plant and  16.3%                            17.9%                            6.9%/15.3%
 equipment) ¹
 Social housing operating margin²                                            21.3%                            22.8%                            21.5%
 EBITDA MRI interest cover³                                                  143.8%                           152,1%                           69.0%/126.8%
 Gearing⁴                                                                    49.3%                            53.0%                            52.1%

* During the twelve months to 31 March 2025 there were two exceptional items
included within the statutory results, as reported:

i) Closure of the Group's four Local Government Pension Schemes, which
resulted in a cessation charge included in operating profit of £29.0m and a
cessation actuarial gain of £27.0m included in other comprehensive income,
giving an overall net comprehensive expense of £2.0m; and

ii) Recognition of additional costs due to an underestimation of the total
full-life cost projections to complete, and impairment of financial asset
(£1.6m) in Boorley Green LLP, our joint venture development with Vistry.

Underlying results shown are prior to the above two exceptional items. Further
details can be found in the Annual Report for the year ended 31 March 2025.

The Group's revenue continues to focus on low-risk affordable housing with the
majority of rent increases from 1 April 2025 at 2.7% in line with the rent
standard. Rent arrears continue to be tightly managed and remained strong at
1.6% (March 2025: 1.7%) against a target of 2.5% of associated revenue. Void
losses for the Group were at 1.3% for the period, compared to the target of
1.5%.

During the period we have seen an overall spend on investment in stock of
£54.7m, which despite being significantly up on the same period last year, is
£5.3m underspent when compared to budget, reflecting the Group's commitment
to providing additional investment in our housing stock. The shortfall to
budget for the first six months of the year is due to a combination of demand
for response repairs, including Damp, Mould and Condensation being lower than
expected, as well as the delivery of the planned works programme being
slightly behind, but which is expected to catch up during the remainder of the
financial year. The Group continues to enact a programme of savings and
efficiencies which is expected to deliver savings of at least £2.5m in the
year, on top of the £3.6m annualised savings achieved last year. The Group's
operating margin for the six-month period to 30 September 2025 was 16.3%,
ahead of full year results last year, and social housing operating margin was
21.3%, in line with last year.

Sales of shared ownership homes and open market sales homes (predominantly
delivered through joint ventures) totalled 193 units for the six months ended
30 September 2025, two fewer than the same period last year (12 months to
March 2025: 497 units). We continue to see strong demand for shared ownership
properties, however sales for the six-month period continue to be slower, with
timing of development handovers hampering the number of units available to
sell and initial first tranche sales at a lower average share, as seen in the
prior year, due to the challenges of buyer affordability.  For the six-month
period we achieved first tranche sales of £16.2m (159 properties) at an
average sales percentage of 31.2%. The average reservation rate for the
six-month period is 36 properties per month and average sales time for such
properties was 12.7 weeks from property handover to completion, against a
target of 26 weeks. As at 30 September 2025 the Group had 112 completed shared
ownership homes available for sale (March 2025: 117), of which 75 were
reserved (March 2025: 52) and 19 were older than 26 weeks (March 2025: 26).

Our work on managing and divesting our inefficient, difficult to manage stock
continued at pace, our void disposal and other asset sale programs with a
strong performance in the six-month period with profits of £15.6m compared to
£8.9m for the same period last year and £26.1m in the prior twelve-month
period.

 

Debt and liquidity

Net debt during the period has increased to £1,345m from £1,300m at 31 March
2025, funding our development programme. Liquidity at 30 September 2025 was
£354m and increased by a further £100m subsequent to the period end (31
March 2025: £420m), consisting at September 2025 of committed and available
undrawn facilities of £128m and cash and cash equivalents of £36m, plus
£190m of retained bonds.

 

Development

We made a strong start to the year completing 457 homes, comprising of 423
affordable homes, surpassing delivery levels at the same point last year, and
34 homes developed with our joint venture partner. We have a strong pipeline
of schemes and have been successful in securing both land and developer led
opportunities and community-led developments (CLTs), adding to our contracted
pipeline of 2,636 homes.

 

Programme growth remains static due to factors such as inflation, interest
rates, greater investment in our existing stock, performance of joint venture
arrangements and a trend of lower tranche sales being achieved from our shared
ownership sales. This financial year, our land led programme will 'start on
site' on 12 schemes, delivering 702 affordable homes. Since April, our land
team has successfully entered contract on three schemes, adding 102 homes to
the programme, with two more schemes (77 homes) expected to follow shortly.
Additionally, since April we have secured planning for a further 252 homes.

 

Our CLT programme continues to expand, with another scheme contracted in Q2.
We forecast 102 CLT homes to start on site this year, including our largest
CLT scheme to date with 40 homes. Through our Section 106 programme, we
maintain strong partnerships with national and regional housebuilders,
prioritising quality delivery. Notably, we're continuing to expand our London
programme with handovers at one of our first London schemes.

 

Our Homes England Strategic Partnership is progressing well, with all homes on
track to start on site within agreed timelines. We've successfully secured
top-up funding, increasing the Strategic Partnership to 1,702 homes. All
schemes are identified, and this funding supports our land and CLT delivery
whilst we await the new Social and Affordable Homes Programme prospectus.

 

 Board and executive team changes

Aster Group Ltd: The members of the Executive Board are unchanged and are
Bjorn Howard, Chris Benn, Rachel Credidio, Dawn Fowler-Stevens, Emma O'Shea
and Amanda Williams.

 

The Board, due to the expiry of tenures, with several members reaching the
maximum permitted term of nine years, underwent the following Non-Executive
Director changes:

 

·    7 September 2025 - Clive Barnett stepped down from the Board

·    1 October 2025 - Tracey Peters stepped down from the Board

·    7 November 2025 - Caroline Wehrle stepped down from the Board

 

We extend our sincere thanks to Clive, Tracey, and Caroline for their
outstanding contributions and dedicated service to Aster throughout their
terms.

 

The following Non-Executive Director appointments were subsequently made:

·    8 September 2025 - Richard Hughes

·    1 October 2025 - Nicola Frayne

·    8 November 2025 - Mat Cooling

 

Aster Treasury plc: There were no changes to the membership of the Board.

 

Aster Group credit rating and governance

Aster Group Limited is rated A (Stable outlook) by Standard and Poor's
(December 2024) and G1/V1 by the Regulator of Social Housing (November 2024).

 

 Notes:

¹ Demonstrates the profitability of operating assets before exceptional
expenses. Defined as operating profit, excluding surplus on sale of property,
plant and equipment, as a percentage of total turnover.

 

² Demonstrates the profitability of social housing operating assets before
exceptional expenses. Defined as operating profit derived from social housing
activities, excluding surplus on sale of property, plant and equipment, as a
percentage of total turnover.

 

³ Seeks to measure the level of surplus generated compared to interest
payable. It is a key indicator for liquidity and investment capacity. EBITDA
MRI is Earning before interest, tax, depreciation, amortisation, excluding
profit on disposal of property, plant and equipment, but including the cost of
capitalised major repairs (major repairs included). Interest includes the
group's interest payable plus interest capitalised during the year but
excluding interest on the net pension liabilities.

 

⁴ Calculated as net debt (loans less cash) as a proportion of social housing
assets. Shows how much of the social housing assets are made up of debt, and
the degree of dependence on debt finance. It also sets out the potential
capacity for further borrowing which can be used to fund the future
development of new housing.

 

For more information, please contact:

Chris Benn, Chief Financial Officer - Chris.benn@aster.co.uk
(mailto:Chris.benn@aster.co.uk)

https://www.aster.co.uk/corporate/about-us/investor-relations
(https://www.aster.co.uk/corporate/about-us/investor-relations)

 

Disclaimer

The information contained herein (the "Trading Update") has been prepared by
Aster Group Limited (the "Parent") and its subsidiaries (the "Group"),
including Aster Treasury plc (the "Issuer") and is for information purposes
only. The information contained in the Trading Update is unaudited.

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. The
information contained in the Trading Update is unaudited. Trading Updates may
be based on Management Accounts rather than draft financial statements so may
not take into account all consolidation and other adjustments as required for
the financial statements. These include, but are not limited to, corporation
tax, fair value of investment properties, fair values relating to business
combinations, balance sheet reclassifications between fixed and current asset
housing stock and defined benefit pension costs such as interest and current
service cost adjustments. The group does not anticipate these adjustments will
have a material effect on the outputs.

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 a profit 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.

END

 

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