Catalyst Housing Limited Catalyst Housing Limited half year update (5757V)

TIDM94DD

RNS Number : 5757V

Catalyst Housing Limited

14 December 2021

Catalyst Housing Limited half year update

Catalyst Housing Limited is today issuing its consolidated unaudited trading update for the six months ending 30 September 2021 (H1 2021/22).

Following merger with Rosebery Housing Association, the number of homes in management has increased from approximately 34,000 to 37,000. Merger is reflected in year to date figures.

Catalyst has retained its G1/V2 rating from the Regulator of Social Housing and S&P has affirmed that the current A- rating has been retained. S&P has noted that this is unlikely to change due to merger with Peabody (anticipated 1 April 2022).

Performance highlights

 
 Highlights                     H1      H1 2020/2021 
                              2021/22 
--------------------------  ---------  ------------- 
 Turnover GBPms                141          144 
 Operating surplus GBPms        43           38 
 Operating margin %            31%          22% 
 Social Housing Operating 
  Margin %                     31%          35% 
 EBITDA MRI interest 
  cover %                      131%         172% 
 Gearing %                     42%          44% 
 Investment in existing 
  properties GBPms              15           13 
 Voids %                      1.57%        1.54% 
 Arrears %                    5.61%        5.62% 
 

Commenting on the results, Tim Jennings, Executive Director Finance said:

"Against the ongoing backdrop of the pandemic we have continued to adapt to new ways of working and to develop our business models. Using our customers' feedback we've redesigned the way we deliver customer experience to focus on a truly local service. We've completed a pan-business IT integration project, bringing together all our IT systems. Through our Build Back Better programme we are embracing agile and flexible ways of working that we now all consider normal, ensuring that we can deliver efficiencies in the future.

Our unaudited overall position shows Catalyst delivering in line with budget at the half year, and our performance metrics are at or better than the year ended 31 March 2021. In the first half of last year we saw reductions in repairs, maintenance and capital works in response to the first lockdown, however this year saw a return closer to normal levels, despite the on-going restrictions in the earlier months. Consequently our social housing operating margins and EBITDA MRI interest cover have reduced compared to the first half of last year.

These results include Rosebery Housing Association, which became a subsidiary on 1 April 2021. A significant gain arising from the net gift of assets of GBP125m has been included in the results for the period.

There has been less impact on the delivery of key services this year due to the pandemic, with the net surplus from our core landlord services delivering to budget.

Our strong cashflows enable us to take advantage of market conditions and during the period to date we cancelled GBP65 million notional value of our stand alone derivatives, thereby reducing our future interest costs as we benefit from the current lower variable rates of interest.

Decent homes and building safety

Building safety and decent homes remains a critical focus for the group. We have been able to catch up on repairs and maintenance delayed due to Covid-19, albeit some non-critical planned capital works have been delayed from the first half to the second half.

Catalyst received a further GBP22 million in grant enabling us to accelerate fire remediation works across our stock. All contracts have been let, all ACM cladding has been removed, and we have brought forward our overall programme of works. We continue to assume leaseholders will not be asked to contribute to works on the blocks over the 18 metres height set by the Government.

Property sales

The sale of homes, market sale and first tranche shared ownership, are just 4% below budget volumes in the first half. The mix in has seen shared ownership sales over perform, with market sales below, this seeing revenues slightly lower, but overall property sales margins are in line with budget. Asset sales, primarily the customer driven sales from staircasing and equity loan redemptions continue to perform strongly.

ESG

We have continued to build on our sustainability commitments and aspirations. Following our Ritterwald Certificate in Sustainable Housing, we have published our first ESG Report and a Sustainable Finance Framework (links below), both of which align our activity to the UN Sustainable Development Goals. Our ESG strategic working group continues to refine and develop our vision for the future. During COP26 we launched a series of webinars for employees provided by a range of external experts to make sure we are fully engaged with the wider debate.

https://www.chg.org.uk/wp-content/uploads/2021/07/Sustainable-Finance-Framework-final-version.pdf

https://www.chg.org.uk/wp-content/uploads/2021/09/210902_ESG-Report-2021_final-v2-2.pdf

Merger with Peabody

On 30 July 2021 Peabody and Catalyst Housing announced proposals to join together to create a better, locally focussed organisation which would deliver significant benefits for residents, providing the scope to invest and innovate more in services, homes, communities, technology and people. The process to complete this by 1 April 2022, with Catalyst Housing joining Peabody Group as a subsidiary, remains on track.

Sarah Thomas took over as interim Chief Executive Officer from 1 October 2021 following Ian McDermott's move to Peabody Chief Executive on secondment.

Statement of Comprehensive Income

 
 GBP millions                 YTD September 2021        2020/21 
 Turnover                                  141.2          298.2 
 Cost of sales                            (28.2)         (94.4) 
 Operating costs                          (82.3)        (149.2) 
 Surplus on disposal 
  of fixed assets                           10.9           12.9 
 Share of joint venture                      1.3              - 
  operating results 
 Operating surplus                          42.9           67.5 
 Gift arising from Gift                    125.4              - 
  of Net Assets 
 Net interest payable                     (20.5)         (43.3) 
 Movement in fair value 
  of investment properties                     -          (0.1) 
 Movement in fair value 
  of derivative financial 
  instruments                                1.9           10.1 
 Surplus for the year                      149.7           34.2 
 

Statement of Financial Position

 
 GBP millions                             YTD September   March 2021 
                                                   2021 
 Housing properties                               3,310        3,069 
 Other fixed assets                                  46           45 
 Intangible assets                                    2            2 
 Investments                                        112          115 
 Stock                                              126          128 
 Cash and bank                                      126          160 
 Debtors                                             26           34 
 Current creditors                                 (88)        (135) 
 Total Assets less current liabilities            3,660        3,418 
 Long term liabilities                          (1,851)      (1,735) 
 Derivative Financial instruments                  (58)         (82) 
 Reserves                                       (1,751)      (1,601) 
 Total long term creditors and 
  reserves                                      (3,660)      (3,418) 
 

Ends

This update may contain certain forward-looking statements reflecting, among other things, our current views on markets, activities and prospects. Actual outcomes may differ materially. Such statements are a correct reflection of our views only on the publication date and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared.

For further information, please contact:

 
 Michaela Booth 07834 106257 
 

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 [e-mail] or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

IR USUWRAAUUARA

(END) Dow Jones Newswires

December 14, 2021 03:23 ET (08:23 GMT)