RHP Group trading update for the year ending 31 March 2022

·    Richmond Housing Partnership Group (RHP) is today issuing its consolidated trading update for the year ended 31 March 2022.

·    These figures are unaudited and for information purposes only.

Highlights for the period ending 31 March 2022

·    RHP own and manage 10,951 homes

·    Turnover for the period was £63m (2021: £64m)

·    Social housing lettings turnover contributed 87% of total turnover (2021: 84%)

·    Operating surplus (including asset sales) for the period was £16m (2021: £19m)

·    Operating margin on social housing lettings was 27% (2021: 36%)

·    Overall operating margin (including asset sales) was 26% (2021: 30%)

·    Overall operating margin (excluding asset sales) was 22% (2021: 29%)

·    Net margin on shared ownership (first tranche) was 37% (2021: 7%)

·    The surplus after tax and pensions for the period was £13m (2021: £7m)

·    Asset gearing as at 31 March 2022 was 56% (2021: 58%)

·    Return on capital employed for the period was 3.3% (2021: 4.0%)

Commenting on the results, Corinna Bishopp, Executive Director of Finance, said:

Our legacy of strong financial performance has enabled the Board to make important strategic choices in 2021/22 regarding additional investment.  We are facing common challenges with the economy with regard to inflation, recruitment and retention of labour, and scarcity of key materials. This has resulted in particular challenges for our repairs service which have led us to increase investment in our customer service teams to improve service performance. We continue to invest more in the safety of our residents through fire safety and compliance activity.

While much of this spending is non-recurring, and it does not generate a definable financial return, these critical decisions do have an impact on our financial performance in the year compared to previous years; however, we are pleased to note a continued good performance and strong balance sheet.

The Group's operating surplus was £16m (2021: £19m) and operating margin of 22% (2021: 29%). Continued development has ensured we continue to grow our turnover, and the first tranche sales of shared ownership properties has contributed £2.3m (2021: £6.0m) to our turnover and £0.9m (2021: £0.4m) to our overall surplus.

Our social housing cost per unit of £4,832 (2021: £3,903) has increased due to higher core operating spend and increased investment in our properties during the year.

The Group's total comprehensive income was £12.8m (2021: £7.1m) and RHP's subsidiary, Co-op Homes (South) Limited has contributed £1.0m (2021: £0.5m) to this overall surplus.

Our EBITDA-MRI margin at 16% (2021: 29%) demonstrates the additional investment made, but still illustrates strong core performance that can comfortably cover the level of investment required to keep our homes in good condition.

We continue to see challenges in our development programme and due to the insolvency of one developer in 20/21 we have incurred a further impairment of £2.3m.

Unaudited Financial Metrics

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 24-month cashflow requirement (before financing). Factors in cash generated from operating activities.

₉ Cash and undrawn RCF

₁₀ 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 unaudited. 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/recommendation to invest in RHP's bonds.

For further information, please contact:

Corinna Bishopp, Executive Director of Finance

[email protected]

https://www.rhp.org.uk/rhpui/investors