Sanctuary Capital PLC

Sanctuary Group Half-Year Consolidated Unaudited Trading Update

Sanctuary Group ("Sanctuary", "Group", "we") presents its unaudited consolidated half-year ("H1 2026") trading update for the financial year ending 31 March 2026.

Comparatives are shown for the Group's audited prior financial year ended 31 March 2025 ("2025"), and the Group's prior half year unaudited equivalent ("H1 2025").

Group Highlights[1]

·      Homes in management: 126,091 (H1 2025: 125,821)

·      Group revenue: £592.7 million (H1 2025: £592.3 million)

·      Regulatory rating: G1 / V2 / C2 (H1 2025: G1 / V2)

·      Customer satisfaction with repairs (Housing): 74.9% (H1 2025: 73.8%)

·      Care Quality Commission rating: 96% (H1 2025: 95%)

·      Care Inspectorate Scotland: 100% (H1 2025: 89%)

·      Group underlying operating surplus: £112.8 million (H1 2025: £105.0 million)

·      Group operating surplus: £116.2 million (H1 2025: £107.4 million)

·      Group underlying operating margin: 19.0% (H1 2025: 17.7%)

·      Group operating surplus margin: 19.6% (H1 2025: 18.1%)

·      RSH operating surplus margin social: 29.9% (H1 2025: 30.8%)

·      Total divisional EBITDA: £165.4 million (H1 2025: £154.6 million)

·      EBITDA MRI Interest cover: 138.9% (H1 2025: 133.6%)

·      Gearing: 53.7% (H1 2025: 49.5%)

·      Months of cash and facilities available: 17 months (H1 2025: 23 months)

·      Credit rating (S&P / Moody's): A / A2 (H1 2025: A / A2)

·      Vacant stock: 3.0% (H1 2025: 3.0%)

·      Homes on site and in development: 2,892 homes (H1 2025: 3,493 homes)

Commenting on the results Ed Lunt Chief Financial Officer said

"Sanctuary delivered a strong set of results for the first half of this financial year, underlining our continued solid operating performance across all of our operations. This was achieved against a more stable economic backdrop but increasing staff cost pressures.

"Robust revenue from improved occupancy coupled with efficiencies and lower utility costs have  ensured divisional EBITDA, operating margin and interest cover are all improved compared to the equivalent period last year.

"We have maintained our focus on repairs performance and reinvestment across our homes. This ongoing investment reflects our continued focus on providing our customers with homes that are safe and of a high quality.

We prioritise spending on current homes while also focusing on the delivery of much needed new affordable homes. Our financial performance and position is robust which gives us the confidence to continue investing, growing and extending the Group's social purpose while ensuring the Group's long-term sustainability."

Financial Performance

Group revenue year to date was £592.7 million (H1 2025: £592.3 million). Income improved across the Affordable Housing, Supported Living, Care and Student operating divisions; however, H1 2025 sales revenue was buoyed by the bulk sale of 66 Swan outright sale units contributing to the fall in outright sales income in H1 2026 versus H1 2025.

The Group generated an underlying operating surplus of £112.8 million (H1 2025: £105.0 million), and Group operating surplus of £116.2 million (H1 2025: £107.4 million).

Underlying surplus before tax increased to £22.7 million, £1.1 million higher than prior year (H1 2025: £21.6 million). The Group generated a surplus before tax of £33.5 million (H1 2025: £24.0 million).

Underlying operating margin was 19.0% (H1 2025 17.7%), and operating margin 19.6% (H1 2025: 18.1%). Year to date, we continued to maintain a strong housing margin with a RSH operating surplus margin of 29.9% (H1 2025: 30.8%).

Cash generated from operating activities was £108.7 million, £48.5 million lower than for the equivalent 2025 period due to working capital phasing (H1 2025: £157.2 million). EBITDA MRI interest cover of 138.9% has improved (H1 2025: 133.6%); historically the Group reports a higher H1 metric compared to the full year due to the Group's reinvestment profile.

As a result of the reclassification of certain properties from non-current assets to assets held for sale at the end of 2025, H1 current assets have increased compared to the same period last year (with a corresponding fall in H1 2025 non-current assets).

Operating Performance

Vacant stock levels (H1 2026: 3.0%, H1 2025: 3.0%) have increased since the start of the financial year due primarily to the completion of new schemes, though, through a focus on void properties,  year to date income lost from void properties (void loss) (H1 2026: 1.7%) has reduced from the equivalent period in the prior year (H1 2025: 1.9%). Rent arrears of 3.67% were slightly higher than at same period last year (H1 2025: 3.63%), average care occupancy increased to 90% (H1 2025: 89%), and student occupancy remained the same at 97% (H1 2025: 97%).

Satisfaction with our repairs service continues to be good at 74.9% (H1 2025: 73.8%) reflecting our continuing commitment to listen and learn from our customers. The Group has also continued to invest in its existing properties with reinvestment spend year to date of £32.0 million (H1 2025 £29.8 million).

Development and Sales

Sanctuary completed 287 (H1 2025: 493) new homes[4] across social housing, shared ownership and market sale tenures; 2,892 (H1 2025: 3,493) homes were on-site and in development at the period end[5].

Sales of 38 (H1 2025: 26) shared ownership homes and 67 (H1 2025: 111) outright sales generated revenue of £29.2 million (H1 2025: £56.2 million); H1 2025 sales revenue was buoyed by the bulk sale of 66 Swan outright sale units.

Revenue sales risk remains limited with sales revenue representing 4.9% of the Group's total revenue (H1 2025: 9.5%).

Treasury

The continued strength of our liquidity is highlighted by our closing cash balance at the half-year of £115.8 million (H1 2025: £116.1 million) and undrawn facilities of £345.5 million (H1 2025: £464.3 million), which provides the Group with 17 months of financing versus committed expenditure. Although this figure is below the 2025 year-end position, the Group maintains significant balance sheet capacity coupled with the £2.5 billion EMTN programme.

Sanctuary investment grade credit ratings remain A with a stable outlook (Standard & Poor's), and A2 with a stable outlook (Moody's).

The Group's investor page (Investors | Sanctuary) provides more information including the latest Annual report and Financial Statements, Corporate Strategy, Sustainability Report, and corporate news.

For further information, please contact:

Treasury: [email protected]

Communications: [email protected]

Select Alternative Performance Measures

·      Underlying operating surplus: operating surplus, excluding integration and restructuring costs, and other gains and losses.

·      Underlying operating surplus margin: operating surplus, excluding integration and restructuring costs, other gains and losses and other items outside of normal business operations, as a percentage of revenue.

·      Operating surplus margin: operating surplus as a percentage of revenue.

·      RSH operating surplus margin social: operating surplus / (deficit) from social housing lettings as a percentage of revenue.

·      Divisional EBITDA: total divisional revenue after deducting costs directly attributable to the divisions as well as an apportionment of central costs, but excluding interest, tax, depreciation, amortisation and impairment.

·      EBITDA-MRI Interest cover: the total: of operating surplus after deducting capitalised major repairs expenditure (net of related grant), less government grant amortised or taken to income, plus interest receivable, plus total depreciation, divided by: the sum of interest payable and financing costs plus interest capitalised.

·      Group Gearing: Total loans and borrowings less cash and cash equivalents divided by properties at depreciated cost.

·      Capacity: cash plus undrawn facilities plus available unencumbered property that could be used to raise finance.

·      Sales revenue as percentage of total revenue: The aggregate of the following sales revenue divided by total revenue

o  revenue from shared ownership first tranche sales; and

o  revenue from non-social housing property sales.

Disclaimer

The information contained in this trading update (including the document and any related speeches made or to be made by the management of Sanctuary Housing Association, Sanctuary Affordable Housing Limited, Sanctuary Scotland Housing Association Limited, Swan Housing Association Limited, Sanctuary Treasury Limited and Sanctuary Capital PLC (together, "Sanctuary")) is for the use of only those persons to whom it is distributed and is not to be reproduced, distributed or used for any other purpose. By accepting delivery of this document, each recipient agrees to treat this document as strictly confidential and not to reproduce, distribute or otherwise use this document or any of its contents without the prior written consent of Sanctuary.

This document is for information and discussion purposes only. The information and opinions contained in this document are for background purposes only and do not purport to be full or complete. No reliance may be placed for any purpose on the information or opinions contained in this document or their accuracy or completeness.

The contents of this document are not a financial promotion. None of the contents of this document constitute, (i) an invitation or inducement to engage in investment activity; (ii) any recommendation or advice in respect of the bonds issued by Sanctuary Capital PLC (the "Bonds") or (iii) any offer for the sale, purchase or subscription of existing or future Bonds.

All information contained herein is subject to updating, revision and/or amendment (although there shall be no obligation to do so). No representation is made, assurance is given, or reliance may be placed, in any respect, that such information is correct and no responsibility is accepted by Sanctuary, or any of its respective officers, agents or advisers as to the accuracy, sufficiency or completeness of any of the information or opinions, or for any errors, omissions or misstatements, negligent or otherwise, contained in or excluded from this document or for any direct, indirect or consequential loss or damage suffered or incurred by any person in connection with the information contained herein (except to the extent that such liability arises out of fraud or fraudulent misrepresentation).

This document may contain certain forward-looking statements. In some cases forward looking statements can be identified by the use of terms such as "believes", "estimates", "anticipates", "projects", "expects", "intends", "may", "will", "seeks" or "should" or variations thereof, or by discussions of strategy, plans, objectives, goals, future events or intentions. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-thinking statements.

No advice has been sought on any legal or taxation matters relating to the information set out in this document and recipients should seek their own legal, tax and financial advice in connection with the information contained herein.

This document has been prepared by Sanctuary for information purposes only and does not constitute an offer to sell, or the solicitation of an offer to acquire or subscribe for any current Bonds or Bonds that maybe issued by Sanctuary in the future.