Places for People Group Limited Trading Update for the Period Ending 30 September 2024

Places for People Group Limited

Consolidated Interim Statement of Comprehensive Income For the 6 months ending 30 September 2024

Places for People Group Limited (the "Group") is pleased to issue its unaudited trading update for the six-month period ending 30 September 2024 ("H1 2024", "the period"). Comparatives are shown for the prior year equivalent period being the six months ended 30 September 2023 ("H1 2023"), which are also unaudited, as well as for the audited year ended 31 March 2024 ("2024").

In the period we saw a General Election with a change of government. We expected a Labour government to be supportive of the sector and the announcements on the rent settlement, the increased grant under the Homes England Strategic Partnership and the commitment to build 1.5 million homes are all positive for the longer term. However, this is balanced with continued financial pressures, through repairs and maintenance costs, higher staff costs as a result of the increase in National Insurance, and higher interest rates which are impacting us as well as the rest of the sector.

In April 2024 we completed the merger with Origin Housing Limited and the H1 2024 results include the one-off draft profit from this merger which brought 6,800 homes into the Group. There were a number of challenges that came with Origin and that we were fully prepared for including onerous bank covenants and, in the period, we repaid all of Origin's c£300m of bank debt and we are still on track to complete the transfer of engagement by March 2026. In March 2024, we completed the merger with South Devon Rural and in the period, followed by the transfer of engagement into Places for People Living+ Limited.

We continue to prioritise our investment in the safety and quality of our existing homes and have implemented several measures to improve our repairs service and reduce completion times. We are now starting to see the benefit of these proactive measures, including the Home MOTs, and we are now seeing demand starting to stabilise.

We are still committed to playing our part in addressing the country's housing crisis and utilising the Homes England Strategic Partnership we delivered 868 new homes in the period (2023: 605) of which 672 were affordable.

Due to the increased investment in our homes and the new development activity, we have increased our debt and, combined with higher interest rates, are therefore seeing higher interest costs, albeit that H1 2023 was reduced due to a £24.8m net gain on debt breakage.

Overall, the Group's turnover for the period increased to £481.8m (H1 2023 £414.4m) which generated an Operating profit before interest of £103.3m (H1 2023: £84.7m). These increases are partly due to the 7.7% rent increase and also include 6-months of Origin's results. The operating margin for the period was 21.4% which is an improvement from 20.4% at H1 2023.

Profit on ordinary activities before taxation increased to £351.7m (H1 2023 £23.4m) but after adjusting for the negative goodwill and last year's debt breakage the H1 2024 performance is broadly consistent with H1 2023.

Despite the challenging economic backdrop, we continue to invest in existing properties as well as delivering new homes, and this remains key to our strategy and core purpose, as the UK's leading social enterprise, of changing lives by creating supporting thriving Communities.