Aster Treasury PLC Trading Statement (3092F)

TIDM42RJ

RNS Number : 3092F

Aster Treasury PLC

13 November 2020

Aster Group t r ad i ng update for t he six months ended 30 September 2 0 20

Aster Group issu es its unaudited gro up trading update for the six mo nths ended 30 Septe m ber 2 0 20, with c om paratives to the audited financial st ate ments for t he 12 mo nths e nded 31 March 2 0 20.

COVID-19 update

Like many in the sector, the restrictions in place over the past few months because of COVID-19 has caused significant disruption to our business, resulting in a temporary closure of construction sites for six to eight weeks at the beginning of the financial year. This is likely to result in fewer completions for the year and impact rental income, first tranche sales and profits from the group's joint ventures.

The restrictions have also meant that we had to postpone non-essential works which has led to a backlog of non-essential repairs and planned major works which will take several months for us to work through. Expenditure in these areas was reduced for the period to 30 September 2020 and the expectation is that the increased expenditure from the catch up in these repairs and other recovery related costs is likely to impact the group's financial results and indicators in the second half of the year.

The health and safety of our employees and customers has remained our priority throughout. We continue to follow government guidance closely and have personal risk assessments in place for colleagues working in our communities - this continues to be the best way to help keep our colleagues and customers safe. We continue to work through our three staged approach to turning services back on.

We have returned to a normal programme of safety inspections, fire risk assessments and asbestos surveys and since the start of June we've carried out over 9,000 routine gas safety checks and let over 450 homes to families on the housing register.

As a housing association we know that Covid-19 restrictions have had a big impact on the wellbeing of some of our most at risk customers, and ensuring their safety has been one of our top priorities throughout this time. Our befriending service Aster Connect was launched to provide a friendly voice at the end of the phone to some of our older customers and customers with extra medical needs or disabilities.

Aster Connect volunteers have been best placed to spot anyone struggling and signpost them to further support available in their community.

Throughout the first lockdown we also carried out over 10,000 welfare calls to customers with vulnerabilities living in sheltered and extra care housing. Through these regular phone calls, it has ensured people have access to food, medication and supplies they need.

Fina n ci al and Ope r a t i ng Pe rfo rman ce

Unaudited profit for the six mo nths to Sep tem ber 2 0 20 was GBP 25.8m. H o using p r o perties (net of depreciati o n) h a ve increased to GBP 1,771m fr om GBP1,733m at 31 March 2 0 20.

 
 Consolidated Statement of Comprehensive Income       6 months    12 months 
  (GBP000)                                           September        March 
                                                          2020         2020 
 Turnover                                              109,289      214,560 
 Operating costs                                      (75,687)    (162,859) 
 Surplus on sale of housing property, plant and 
  equipment                                              6,058       20,042 
 Operating Profit                                       39,660       71,743 
 Profit on disposal of other property, plant, 
  equipment and intangible assets                            -          214 
 Reversal of impairment of housing assets                    -          135 
 Share of (loss)/profit in joint ventures                (430)          374 
 Net finance expense                                  (13,465)     (26,680) 
 Gain on acquisition                                         -       14,013 
 Profit for the period                                  25,765       59,799 
 
 
 Financial indicators                                 6 months    12 months 
                                                     September        March 
                                                          2020         2020 
 Operating margin (excluding surplus on sale of 
  housing property, plant and equipment) (1)             30.7%        24.2% 
 Social housing operating margin(2)                      35.7%        27.2% 
 EBITDA MRI interest cover(3)                           255.5%       191.8% 
 Gearing                                                 53.2%        53.5% 
                                                  ------------  ----------- 
 

Sales of shared ownership homes and open market sales homes (predominantly delivered through joint ventures) homes totaled 183 units for the six months ended 30 September 2020 (12 months ended 31 March 2020: 543). As at 30 September 2020, the group had 83 completed shared ownership homes void and available for sale either sold and yet to complete or unsold (31 March 2020: 133).

Customer satisfaction was 82% as at 30 September 2020 (31 March 2020: 82%). Void losses for the group's general needs and sheltered stock were 1.0% (31 March 2020: 0.7%). Rent arrears were 2.4% (31 March 2020: 2.2%).

Debt and Li qu i d i ty

Net debt over the period has increased to GBP917m from GBP902m. We had liquidity at 30 September 2020 of GBP406.5m, consisting of committed and available undrawn facilities of GBP308.7m, and cash and

cash equivalents of GBP97.8m. During the period we issued GBP100m of Commercial Paper under the Covid Corporate Financing Facility (CCFF).

Development

We completed 279 affordable units in the six months ended 30 September 2020 (12 months ended

31 March 2020: 955) and have a contracted pipeline of 2,517 homes (31 March 2020: 2,204). The number of completed homes during the year is expected to reduce as a direct result of the disruption caused by COVID-19. All development sites are open and are operating but at approximately 80% of capacity. We have been successful in securing opportunities and entering contract and we have a healthy pipeline of opportunities.

Board and Executive Team Changes

Aster Group Ltd: The members of the Executive Board are Bjorn Howard, Chris Benn, Rachel Credidio, Dawn Fowler-Stevens, Emma O'Shea and Amanda Williams.

Claire Whitaker OBE was appointed as a co-optee to the Board from 12 August 2020.

Emma O'Shea was appointed to the Executive Board on 6 April 2020.

Aster Treasury plc: There were no changes to the membership of the board.

Aster Group credit rat i ng and governance

Aster Treasury plc is rated A+ (stable) by Standard and Poor's (December 2 0 1 9), and G 1/ V1 by t he Regulat or of Social H o using (25 March 2020 ).

Notes:

(1) Demonstrates the profitability of operating assets before exceptional expenses. Defined as operating profit, excluding surplus on sale of property, plant and equipment, as a percentage of total turnover.

(2) Demonstrates the profitability of social housing operating assets before exceptional expenses. Defined as operating profit derived from social housing activities, excluding surplus on sale of property, plant and equipment, as a percentage of total turnover.

(3) Seeks to measure the level of surplus generated compared to interest payable. It is a key indicator for liquidity and investment capacity. EBITDA MRI is Earning before interest, tax, depreciation, amortisation, excluding profit on disposal of property, plant and equipment, but including the cost of capitalised major repairs (major repairs included). Interest includes the group's interest payable plus interest capitalised during the year but excluding interest on the net pension liabilities.

Calculated as net debt (loans less cash) as a proportion of social housing assets. Shows how much of the social housing assets are made up of debt, and the degree of dependence on debt finance. It also sets out the potential capacity for further borrowing which can be used to fund the future development of new housing.

For m o re i nfo rmation, p l e ase c onta ct:

Chris Benn, Group Finance Director - [e-mail]

Lynsey Thorp, Head of Communications - [e-mail]

https://www.aster.co.uk/corporate/about-us/investor-relations

Dis claimer

The information contained herein (the "Trading Update") has been prepared by Aster Group Limited (the "Parent") and its subsidiaries (the "Group"), including Aster Treasury plc (the "Issuer") and is for information purposes only. The information contained in the Trading Update is unaudited.

The Trading Update should not be construed as an offer or solicitation to buy or sell any securities issued by the Parent, the Issuer or any other member of the Group, or any interest in any such securities, and nothing herein should be construed as a recommendation or advice to invest in any such securities.

Statements in the Trading Update, including those regarding possible or assumed future or other performance of the Group as a whole or any member of it, industry growth or other trend projections may constitute forward-looking statements and as such involve risks and uncertainties that may cause actual results, performance or developments to differ materially from those expressed or implied by such forward-looking statements. Accordingly, no assurance is given that such forward-looking statements will prove to have been correct. They speak only as at the date of the Trading Update and neither the Parent nor any other member of the Group undertakes any obligation to update or revise any forward- looking statements, whether as a result of new information, future developments, occurrence of unanticipated events or otherwise. The information contained in the Trading Update is unaudited. Trading Updates may be based on Management Accounts rather than draft financial statements so may not take into account all consolidation and other

adjustments as required for the financial statements. These include, but are not limited to, fair value of investment properties and defined benefit pension costs such as interest and current service cost adjustments. The group does not anticipate these adjustments will have a material effect on the outputs.

None of the Parent, any member of the Group or anyone else is under any obligation to update or keep current the information contained in the Trading Update. The information in the Trading Update is subject to verification, does not purport to be comprehensive, is provided as at the date of the Trading Update and is subject to change without notice.

No reliance should be placed on the information or any projections, targets, estimates or forecasts and nothing in the Trading Update is or should be relied on as a promise or representation as to the future. No statement in the Trading Update is intended to be a profit estimate or forecast. No representation or warranty, express or implied, is given by or on behalf of the Parent, any other member of the Group or any of their respective directors, officers, employees, advisers, agents or any other persons as to the accuracy or validity of the information or opinions contained in the Trading Update (and whether any information has been omitted from the Trading Update). The Trading Update does not constitute legal, tax, accounting or investment advice.

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November 13, 2020 08:24 ET (13:24 GMT)