EMH Treasury plc Trading Update (7606S)

TIDM36GZ

RNS Number : 7606S

EMH Treasury plc

13 March 2023

EMH Treasury Plc

East Midland Housing Group Limited (emh Group) - trading update

31st December 2022 - 9 months unaudited

We are pleased to present unaudited results for the emh Group for the 9 months to 31 December 2022.

Despite the current financial challenges, our performance to date is ahead of budget and we continue to deliver our board approved strategy of developing new homes and investing in our existing properties to improve the lives of our residents and positively impact the communities we operate in.

To date, we have delivered an overall surplus of GBP12.5m compared to a budgeted surplus of GBP7.1m. This is also ahead of the full prior year surplus of GBP11.1m. Our improvement on budget is driven by strong margins on first tranche shared ownership sales and asset disposals.

Furthermore, we have invested GBP73m in new homes (rented and shared ownership) and improvements to existing properties. All this is despite emh and other social housing providers continuing to face an uncertain operating environment. High inflation, a tight labour market, and the residual impact of the pandemic on supply chains have increased costs considerably.

 
 Unaudited statement of comprehensive income 
  31 December 2022 
                                  9 months     9 months    12 months 
 GBP'000                         31.12.2022   31.12.2021   31.03.2022 
 Turnover                            99,393       95,120      121,657 
 Operating costs and costs 
  of sales                         (63,250)     (59,736)     (78,202) 
 Depreciation                      (13,187)     (11,478)     (16,605) 
 Gain on sale of fixed assets         4,539        3,805        4,981 
 Net interest charge               (15,037)     (15,574)     (20,692) 
 Surplus for the year                12,458      12,1387       11,139 
 Tax                                      0            0         (49) 
 Actuarial gain on pensions               0            0        9,691 
 Total comprehensive income          12,458       12,137       20,781 
------------------------------  -----------  -----------  ----------- 
 
 
 Unaudited statement of financial position 31 
  December 2022 
            GBP'000              31.12.2022   31.12.2021   31.03.2022 
 Housing properties at cost         993,883      928,648      928,359 
 Other fixed assets                  19,092       19,993       19,918 
 Net current assets                 (8,859)       65,439       43,137 
 Total assets less current 
  liabilities                     1,004,116    1,014,080      991,414 
 Creditors: amounts due after 
  1 year                          (750,837)    (784,018)    (746,665) 
 Provision of liabilities                 0            0        (717) 
 Net pension liability                    0            0      (9,288) 
 Total net assets                   253,279      230,062      234,744 
------------------------------  -----------  -----------  ----------- 
 

Emh is delighted that its Standard & Poor's long term credit rating was affirmed on 23(rd) January 2023 at A+ (negative).

 
 Key metrics 
     Credit rating       Governance & Viability          Liquidity              Retained bond        Interest Rate Mix 
                                 rating 
     A+ (Negative)              G1 / V2            Available facilities     GBP100m retained bond       Fixed 94.5% 
                                                          GBP125m             available for sale 
   Standard & Poor's                                    Cash GBP28m                                    Variable 5.5% 
 Affirmed January 2023 
 

Key Performance Indicators

 
                                                      Year to Date   31-Mar-22   Covenant 
 Operating margin(1) on social housing lettings(2)       28.8%        27.80% 
 Social Housing operating margin(3)                      27.9%        22.10% 
 EBITDA MRI interest cover(4)                             186%         154%        110% 
 Gearing(5)                                              51.2%        48.20%       65% 
 Net Debt per Unit(6)                                    25,982       25,669 
 Liquidity ratio(7)                                      235.8%       178.8% 
 
 
 Notes: 
 (1) Operating surplus / Turnover 
 (2) General Needs, Supported housing, Affordable rent and Low cost home ownership tenures 
 (3) Operating margin excluding asset sales removes gain or loss on disposal of fixed assets 
 (4) Operating surplus and surplus on asset disposals adding back depreciation less amortised 
  grant and major repairs / interest payable 
 (5) Net debt / Housing assets at historic cost 
 (6) Net debt / Total units owned and managed 
 (7) Operating cashflow plus facilities available and secured retained bond / Capital expenditure 
  and debt servicing over the next 12 months 
 

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This trading update contains certain forward-looking statements about eh future outlook for emh Group. These have been prepared and reviewed by emh Group only and are unaudited. Forward-looking statements inherently involve a number of uncertainties and assumptions. Although the Directors of emh Group believe that these statements are based on reasonable assumptions on the publication date, any such statements should be treated with caution as outlook may be influenced by factors that could cause actual and the 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 emh Group's bonds.

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March 13, 2023 07:19 ET (11:19 GMT)