REG - Flagship Finance PLC - Trading update and change to executive team

SAP SEAnnouncement

13/09/2023 10:45

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230913:nRSM3054Ma&default-theme=true

RNS Number : 3054M  Flagship Finance PLC  13 September 2023

Flagship Housing Group Limited (Flagship) trading update, audited financial
statements for the year ended 31 March 2023 and change to executive team.

 

Appointment of Chief Financial Officer

Flagship announces the appointment of Jonathan McManus as Chief Financial
Officer, effective from 1 October 2023. Jonathan has served as the Group's
Finance Director for seven years, and since 1 December 2022 has held the
position of Interim CFO. He is a member of the Chartered Global Management
Accountants and holds extensive financial expertise.

 

David McQuade, Chief Executive, said: "After a rigorous selection process, the
Board is delighted that Jonathan McManus will be assuming the role of Chief
Financial Officer. His experience and commitment to our company's success
render him a valuable addition to our Executive team."

 

Flagship headline results and highlights

Flagship, the parent company of Flagship Finance Plc and a Registered Provider
of Social Housing that owns and manages 32,721 (2022: 32,192) homes in the
east of England, announces its trading highlights and summary of audited
financial results for the year ended 31 March 2023. Highlights include:

 

·    750 new homes built during the year: 451 affordable rent; 181 shared
ownership, 2 shared equity and 116 open market sale.

·    Financial performance remains robust with annual turnover increasing
by 7.9% to £250.2m (2022: £231.9m)

·    Invested £89m (2022: £75m) in maintaining and improving its homes
delivering a reinvestment percentage of 8.6%, helping Flagship to stand out
from its peer group of Registered Providers with a similar number of units.

·    Annual Operating surpluses of £79.6m (2022: £83.3m)

·    Delivered an operating margin, including gains on disposal, of 31.8%
(2022: 35.9%).

·    Arrears and void loss both improved year on year.

·    Credit rating of A2 (Negative) from Moody's

·    G2 / V2 rating from the Regulator of Social Housing - last IDA
completed April 2023

 

Full year results demonstrate robust financial performance and ongoing
commitment to sustainability

 

It has been a tumultuous year for businesses of all sizes and Flagship has
certainly not been immune to those challenges. Our people, business operations
and operating performance were impacted by rising energy bills, the
cost-of-living crisis, inflation, supply chain disruption and labour
shortages. We have navigated these uncertainties and risks with a determined
focus and we are proud of our underlying financial viability that enabled our
Board to make some important decisions to maintain asset investment, reduce
outstanding repairs, and deal with damp and mould amidst a challenging
economic environment.

 

Alongside the financial statements, we have also published our 'Use of
Proceeds Report' detailing how the funds raised under our Sustainable Finance
Framework have been used.

 

Both documents are available on our website:
www.flagship-group.co.uk/about-us/investors-hub/
(http://www.flagship-group.co.uk/about-us/investors-hub/)

 

Jonathan McManus, Interim Chief Financial Officer at Flagship said:

 

"Our focus has been on maintaining and improving compliant high-quality
affordable homes despite the challenging economic trading environment. We have
continued to deliver a strong set of financial results which underpins our
healthy liquidity position.

 

We are pleased that we have remained compliant with the Regulator's Governance
and Financial Viability standards following our recent In-Depth Assessment in
April 2023. We now have the opportunity to formulate a comprehensive action
plan working with the regulator, our people, our tenants and our Board of
Directors to further strengthen our governance arrangements as we strive to
return to G1 and V1 in the future.

 

58.9% (2022: 56.6%) of our homes meet EPC-C and we remain on track for all
homes to be at EPC-C or above by 2030. We have set ourselves an ambitious goal
to be a net zero Flagship by 2050. Our action plan which includes building new
homes to SAP 86+, significant retrofit programmes, landfill waste reduction,
an all-electric car fleet and a new Environmental Management System will help
guide us toward that goal.

 

Only one six storey property in our portfolio requires internal and external
improvement works. Following extensive surveys, we now understand the cost of
the works required to be £3.25m and this has been outlined in our annual
report."

 

Development Review

Building new homes and improving our existing homes is an integral part of
achieving our business plan and delivering our social purpose.

 

During the year ended 31 March 2023 we have built 750 (2022: 655) new homes
across Norfolk (376 homes), Suffolk (251 homes), Cambridgeshire (63 homes) and
Essex (60 homes).

 

We sold 103 open market sale homes and 152 shared ownership homes generating
£52.8m of income. We further sold additional tranches in 50 existing shared
ownership homes generating a further £5m of income.

 

98% (2022: 95%) of the new homes we delivered during the year were built to
EPC-B (SAP 81+) or above. We are designing new homes on our own land to be SAP
86+ to meet future net zero emission targets in accordance with our net zero
strategy. 42% of homes on our own land were SAP 86+ in 2023, up from just 19%
in 2022. Future proofing these properties today, and building renewable
technology into their fabric, means that we do not have to retrofit them in
the future reducing the overall cost of investment required in each property.

 

Damp and Mould

 

We're committed to eradicating damp and mould in our homes. We have introduced
a comprehensive suite of initiatives during the year, both shorter term
interventions and longer-term proactive measures to deliver our commitment. We
welcome government legislation and are working tirelessly to ensure our homes
are safe and healthy for our tenants. We will continue to work closely with
our tenants and partners to understand the best methods and utilise existing
and emerging technologies to prevent damp and mould.

 

Enquiries

 

All enquiries in relation to this trading update should be directed to:

Jonathan McManus Interim Chief Financial Officer

Tel: 0845 258 6219

email: treasury@flagship-group.co.uk

 

Disclaimer

 

The information in this announcement of results has been prepared by Flagship
Housing Group Limited and is for information purposes only. The announcement
should not be construed as an offer or solicitation to buy or sell any
securities issued by Flagship Finance Plc or any other member of the Group, or
any interest in such securities, and nothing herein should be construed as a
recommendation or advice to invest in any such securities.

 

This announcement contains certain forward-looking statements reflecting,
among other things, our current views on markets, activities and prospects. By
their nature, forward looking statements involve a number of risks,
uncertainties or assumptions that could cause actual results to differ
materially from those expressed or implied by those statements. Actual and
audited outcomes may differ materially. Such statements are a correct
reflection of our views only on the publication date and no representation or
warranty is given in relation to them, including as to their completeness or
accuracy or the basis on which they were prepared. Financial results quoted
are audited. We do not undertake to update or revise such public statements as
our expectations change in response to events. Accordingly, undue reliance
should not be placed on forward looking statements.

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  TSTSFWSADEDSESU