REG - RHP Finance PLC - Trading Statement

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RNS Number : 3496V  RHP Finance PLC  14 August 2025

RHP Group trading update for the year ending 31 March 2025

·    Richmond Housing Partnership Group (RHP), including RHP Finance PLC,
is today issuing its consolidated trading update for the year ended 31 March
2025.

·    These are classified as unaudited as the external audit work is not
yet finalised, so they are for information purposes only.

·    We are presenting our results excluding an exceptional one-off item
which represents a material impairment* of £12.7m on a legacy scheme. This
ensures our underlying operating performance is not distorted and enables more
meaningful comparison across financial years.

Highlights for the period ending 31 March 2025 excluding impairment of £12.7m
where applicable

·    RHP Group own and manage 11,179 homes (2024: 10,805 homes)

·    Turnover for the period was £82m (2024: £71m)

·    Social housing lettings turnover contributed 88% of total turnover
(2024: 86%)

·    Operating surplus (including asset sales) for the period was £15m
(2024: £16m)

·    Operating margin on social housing lettings was 20%  (2024: 24%)

·    Overall operating margin (including asset sales) was 19% (2024: 23%)

·    Overall operating margin (excluding asset sales) was 17% (2024: 21%)

·    Net margin on shared ownership (first tranche) was 3% (2024: 12%)

·    The surplus/(loss) after tax and pensions for the period was £8m
(2024: £10m)

·    Asset gearing at the year-end was 58% (2024: 55%)

·    Return on capital employed for the period was 2.8% (2024: 3.2%)

Commenting on the results, Laura Awosile, Interim Executive Director of
Finance, said:

We are pleased to publish our unaudited financial results for 2024/25.

The Group's operating surplus (excluding £12.7m impairment) is £15m (2024:
£16m) with an operating margin of 20% (2024: 24%). Our turnover grew to £82m
(2024: £71m) reflecting an increase in income from social housing lettings
through annual rent reviews and additional income received from two stock
acquisitions in the year, reflecting our growth strategy.

Acquisition of stock and the development of new housing stock has had a
positive impact on our turnover. The stock acquisitions in year delivered over
£1m in turnover (2024: £nil), and first tranche sales of shared ownership
properties in the year has generated income of £3.6m (2024: £2.7m). Our
operating costs increased as we invested in our homes and repairs service. The
challenges we have faced with the repairs service also led to knock on costs
of dealing with complaints and disrepairs claims. Our operating surplus
(excluding impairment) fell to £15m (2024: £16m).

The reduction in operating surplus and margin, alongside the increase in
social housing cost per unit, reflects the ongoing impact of inflationary
pressures, increased investment in our repairs and maintenance service, and
wider cost challenges facing the sector. Our social housing cost per unit has
increased to £6,915 (2024: £6,049), which has been impacted by the areas
discussed above.

We invested £15.9m (2024: £15.0m) in improving existing homes and built 52
new sustainable and accessible homes for local people.

 

Despite challenging economic conditions with rising inflation, we continue to
operate in an environment of strong financial control, ensuring we prioritise
our spend in alignment with our strategic objectives and value for money. In
line with our strategy, we have increased investment in our asset portfolio,
enhancing the quality, safety and security of our homes for our customers. We
also invested in service improvements to address repairs performance
challenges and reduce complaints volumes, supporting improved customer
outcomes and regulatory compliance.

Following the mutual decision to end our repairs partnership,, we are
investing in our transition to an in-house repairs service delivery model in
October 2025. We are hopeful that 2026/2027 will deliver lower repairs costs,
an improvement in our repairs service, faster turnaround of repairs and
increased customer satisfaction.

The Group retains £100m in undrawn revolving credit facilities and manages
liquidity to ensure obligations are met without holding surplus cash.

The Group's total comprehensive income excluding impairment was £7.7m (2024:
£8.6m) and RHP's subsidiary, Co-op Homes (South) Limited has contributed
£0.5m (2024: £0.6m) to this overall position.

Our return on capital employed excluding the impact of impairment has
increased to 2.8% (2024: 2.3%), reflecting improved utilisation of invested
capital. The increase was supported by the stock acquisition during the year,
enhancing our asset base and future rental income potential.

Our EBITDA-MRI interest cover (before impairment) at 103% (2024: 137%)
demonstrates our strategic choices from investing in improvements to our
repairs service and in major works to existing homes.  Excluding the one-off
impairment, the results demonstrate a strong underlying performance, with
sufficient capacity to support the investment needed to maintain our homes to
a good standard.

We will be publishing our audited results in September.

Our credit rating:

Following a reassessment in June 2025 by S & P Global, we are pleased to
confirm we retained our A credit rating with a negative outlook, reflecting
our strategic choices. We are addressing the issues with our repairs service,
by bringing it in-house by autumn this year, which will have a positive impact
on our financial outlook over the coming years. We have made the decision to
continue to invest in improving our repairs service and in the safety of our
homes, whilst improving the energy efficiency of our homes as we work towards
our sustainable targets.  Our investment in providing more affordable homes
in our local communities has continued through the acquisition of 305 homes
during the year, alongside our steady continued development of new homes. We
will continue to maintain our strong liquidity position, evidenced by our
ample financial facilities.

*The impairment of £12.7m, which has impacted our financial results and
metrics relates to a legacy development scheme where RHP entered into contract
in 2017, and started on site in 2018. There were delays to the project,
initially due to planning, then Covid, as well as issues with labour and
materials following Brexit. We terminated the developer's contract due to
non-performance. We have impaired the scheme as subsequent assessment
concluded that the building may need to be reconstructed to comply with
current building safety act regulations, which were not in place when the
planning application was submitted and approved in 2017/18.

 

Unaudited Financial Information

 Statement of comprehensive income                                        31 March 2025  31 March

                                                                          Actual          2024

                                                                                         Actual

 Turnover from social housing lettings                                    £72m           £61m
 Turnover                                                                 £82m           £71m
 Operating surplus (including asset sales, before impairment)             £15m           £16m
 Operating surplus (including asset sales, after impairment)              £3m            £16m
 Surplus/(loss) after tax and pensions (before impairment)                £8m            £10m
 Surplus/(loss) after tax and pensions (after impairment)                 (£5m)          £10m

 Margins                                                                  31 March 2025  31 March

                                                                          Actual          2024

                                                                                         Actual

 Operating margin ₁ on social housing lettings ₂                          20%            24%
 Overall operating margin ₃ (including asset sales, before impairment)    19%            23%
 Overall operating margin ₃ (including asset sales, after impairment)     3%             23%
 Overall operating margin ₃ (excluding asset sales, before impairment)    17%            21%
 Overall operating margin ₃ (excluding asset sales, after impairment)     1%             21%
 Operating margin on shared ownership sales (first tranche) ₄             3%             12%

 Key financial ratios                                                                    31 March 2025

                                                                                         Actual

 EBITDA MRI Interest cover (before impairment)₅                                          103%
 EBITDA MRI Interest cover (after impairment)₅                                           (31%)
 Gearing ₆                                                                               58%

 Liquidity                                                                               31 March 2025

                                                                                         Actual

 Cash, short term investments and undrawn facilities ₈                                   £112m
 Retained bonds₉                                                                         £25m
 Unencumbered stock (EUV-SH)                                                             £138m

 Credit rating

 S&P June 2025                                                                           A (negative)

 

 

Notes:

₁ Operating surplus / Turnover

₂ General Needs, Supported housing, Affordable rent and Low-cost home
ownership tenures

₃ Operating margin including asset sales includes all activity; operating
margin excluding assets removes gain or loss on disposal of assets including
first tranche shared ownership sales

₄ Operating surplus on first tranche shared ownership sales / Turnover from
first tranche shared ownership sales

₅ (Operating surplus + Depreciation + Amortisation - Capitalised major
repairs) / Net interest paid

₆ Net Debt / Housing assets at historic cost

₇ Net debt / Total units owned & managed

₈ Cash, deposits, undrawn loans and RCF

₉ Retained element of RHP Finance PLC 2048 bonds

 

This trading update contains certain forward-looking statements about the
future outlook for RHP Group. These have been prepared and reviewed by RHP
Group only and are classified as unaudited, as the external audit is not
finalised. Forward looking statements inherently involve a number of
uncertainties and assumptions. Although the Directors believe that these
statements are based upon reasonable assumptions on the publication date, any
such statements should be treated with caution as future outlook may be
influenced by factors that could cause actual and audited outcomes and results
to be materially different.

Additionally, the information in the statement should not be construed as
solicitation or recommendation to invest in RHP's bonds.

For further information, please contact:

 

Laura Awosile, Interim Executive Director of Finance

RHP Limited

e: Investor.relations@rhp.org.uk

w: https://www.rhp.org.uk/rhpui/investors
(https://www.rhp.org.uk/rhpui/investors)

 

 

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