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Name | Symbol | Market | Type |
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Bromford 48 | LSE:42RA | London | Bond |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
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TIDM42RA
RNS Number : 7462T
Bromford Housing Group Ltd
18 November 2019
Bromford Housing Group
18 November 2019
Bromford Housing Group trading update for the period ending 30 September 2019
-- Bromford Housing Group (BHG) is today issuing its consolidated trading update for the six months ending 30 September 2019 (2019 HY).
-- There have been no changes to the Group structure in the period, with Merlin Housing Society Limited (Merlin) and Severn Vale Housing Society (Severn Vale) joining the Group in FY 2018/19. The HY 2018 figure comparators include Merlin who joined the Group in July 2018, but not Severn Vale who joined the Group later in January 2019.
-- These figures are unaudited and for information purposes only.
Highlights (Bromford Housing Group for the period ending 30 September 2019)
-- BHG own and manage 42,944 homes (42,735 as at 31 March 2019) -- BHG have maintained their G1 / V1 rating further to a post-merger In Depth Assessment (IDA).
-- BHG have entered into a strategic partnership with Homes England, securing GBP66m of grant funding
-- BHG have disposed of 86 homes in Newcastle under Lyme and Staffordshire Moorlands, effectively removing presence from these local authority areas as part of our strategic focus on our Top 4 areas
-- Turnover for the period was GBP137m (2018 HY: GBP124m) -- Social housing turnover contributed to 79% of total turnover (2018 HY: 78%) -- Operating surplus for the period was GBP50m (2018 HY: GBP46m) -- Operating margin on social housing lettings was 35% (2018 HY: 41%) -- Overall operating margin (including asset sales) was 37% (2018 HY: 37%) -- Overall operating margin (excluding asset sales) was 33% (2018 HY: 34%) -- Net margin on shared ownership (first tranche) was 21% (2018 HY: 21%) -- Net margin on outright sales was 15% (2018 HY: 20%) -- The surplus after tax for the period was GBP30m (2018 HY: GBP28m) -- Asset gearing as at 30 September 2019 was 39% -- Interest cover as at 30 September 2019 was 2.2x
Commenting on the results, Lee Gibson, Chief Financial Officer, said:
"It has been another successful period for the Bromford Housing Group as we pursue our new Corporate Strategy. We continue to focus on our core business of social housing which contributes to almost 80% of turnover and we are pleased to have delivered to budget once again. We have also rationalised our geographical focus, undertaking strategic disposals programmes to extricate from two local authority areas. We will undertake further stock rationalisation as we focus our delivery to our Top 4 areas.
We continue to pursue our ambition of delivering 13,100 new homes by 2028 and have de-risked our approach to development through our strategic partnership with Homes England and also through working with a number of leading developers through the Bromford Construction Partnership. We have completed 497 homes over the past six months and remain on track to meet this year's delivery target. We are aware that market sales are down against budget due to a re-profiling our sales activity and we would expect to recover most of this in the period to 31 March 2020."
Imran Mubeen, Head of Treasury, added:
"The period saw the expected regrade of our Moody's rating to A2 to align with the development aspirations and associated borrowings in our new business plan. We continue to benefit from one of the strongest dual credit rating platforms in the sector, which we will pro-actively monitor and maintain through internal shadow credit rating on all future Group business plans. After the regrade, the strength of our credit profile and the headroom in our existing interest cover and metrics was once again realised in the issue of our third bond at sector leading rates in 18 months.
We continue to benefit from strong levels of liquidity and look forward to working with funders and investors to maintain this position. We continue to rationalise and optimise our existing loan book and we are also pro-actively pursuing our ESG agenda to issue ESG linked debt in the near future."
Development: housing completions (2019 HY)
Unit Type Housing completions 2019 HY ------------------- -------------------- Social rent 121 Affordable rent 149 Shared ownership 181 Open market sales 46 Total 497
-- BHG expect to complete more than 1,000 new homes for the financial year ending 31 March 2020; having completed 497 new homes in the financial year to date (451 of which represent affordable housing tenure and 46 open market sale).
-- BHG entered into a strategic partnership with Homes England in April 2019, securing GBP66m of grant funding, enabling us to work together to achieve our ambitious development programme target. We are currently on track to deliver c. 1,400 new homes committed through the partnership in the period to 31 March 2024.
-- BHG have also launched the Bromford Construction Partnership, a collaboration worth GBP160m with four construction partners (EG Carter, Speller Metcalfe, Lovell and Galliford Try) to deliver up to 400 new homes per year and has entered into a partnership with Taylor Wimpey to deliver 455 new homes at the Innsworth site in Gloucestershire.
Development: pipeline
-- BHG continue to plan to deliver c. 13,100 new homes by 2028 under its New Homes Programme. In the pursuit of this development strategy, BHG are engaging in discussion to explore joint venture arrangements with third parties to optimise commercial return with risk mitigation.
Unaudited Financial Metrics
Statement of comprehensive income 30 Sep 2019 30 Sep 2019 30 Sep 2018 Actual Budget Actual -------------------------------------- ------------ ------------ ------------ Turnover from social housing lettings GBP108m GBP107m GBP97m Turnover GBP137m GBP147m GBP124m Operating surplus (including asset GBP50m GBP52m GBP46m sales) Surplus after tax GBP30m GBP28m GBP28m -------------------------------------- ------------ ------------ ------------ Margins 30 Sep 2019 30 Sep 2019 30 Sep 2018 Actual Budget Actual ---------------------------------------- ------------ ------------ ------------ Operating margin(1) on social housing lettings(2) 35% 35% 41% Overall operating margin(3) (excluding asset sales) 33% 31% 34% Overall operating margin(3) (including asset sales) 37% 35% 37% Operating margin on shared ownership (first tranche)(4) 21% 17% 21% Operating margin on outright sales(5) 15% 15% 20% ---------------------------------------- ------------ ------------ ------------ Key financial ratios 30 Sep 2019 Actual ---------------------------------- ------------ EBITDA MRI/ net interest paid(6) 2.2x Social housing interest cover(7) 1.8x Asset gearing(8) 39% Net debt per unit(9) GBP24k ------------------------------------ ------------ Liquidity 30 Sep 2019 Actual ----------------------------------- ------------- 18 month liquidity requirement(10) GBP345m Cash and undrawn facilities(11) GBP601m Unencumbered stock 10,182 homes ----------------------------------- ------------- Credit ratings --------------- -------------- Moody's A2 (stable) S&P A+ (negative) --------------- --------------
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 asset sales removes gain or loss on disposal of assets
(4) Operating surplus on First tranche shared ownership sales / Turnover from First tranche shared ownership sales
(5) Operating surplus on outright sales / Turnover from outright sales
(6) (Operating surplus + Depreciation + Amortisation - Capitalised major repairs) / Net interest paid
(7) Operating surplus on Social housing lettings / Net interest paid
(8) Net debt / Housing assets at historic cost
(9) Net debt / Total units owned and managed
(10) 18 month cashflow requirement - 20% of sales income + GBP25m
(11) Cash and undrawn RCF
This trading update contains certain forward looking statements about the future outlook for BHG. These have been prepared and reviewed by Bromford 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 this statement should not be construed as solicitation or recommendation to invest in Bromford's bonds.
For further information, please contact:
Imran Mubeen, Head of Treasury
07711 221464
https://www.bromford.co.uk/investorrelations/
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 or visit www.rns.com.
END
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November 18, 2019 05:57 ET (10:57 GMT)
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