Stonewater Funding PLC Mid-Year Performance Update (1679T)

TIDM14MD

RNS Number : 1679T

Stonewater Funding PLC

22 November 2021

Mid-year performance update

Released: 22/11/2021

Stonewater Funding plc

STONEWATER H1 2021/22 PERFORMANCE UPDATE

Stonewater's Mid-Year Performance Update covering the period to 30 September 2021

Financial performance*

The Group is pleased to report a continuing sound financial performance. The unaudited management accounts for the six months to 30 September 2021 show a turnover of GBP113 million (H1 2020/21: GBP96 million), delivering an operating surplus of GBP40 million (H1 2020/21: GBP34 million). Interest cover was 251% (H1 2020/21: 248%).

The operating surplus for the year to March 2022 is forecast to be in line with expectations.

The Group's total capital investment in existing homes during the period was GBP4.7 million, an increase from GBP2.9 million for the same period last year (which reflected the Covid -- 19-related restrictions at the time). Total capital investment in new homes during the period was GBP76 million (H1 2020/21: GBP64 million). Housing Fixed Assets stood at GBP2,124 million, up from GBP2,037 million as at 31 March 2021. Drawn debt was GBP1,300 million, up from GBP1,100 million as at 31 March 2021. Cash and available facilities stood at GBP680 million (31 March 2021: GBP548 million) with committed and fully secured loan facilities at GBP1,655 million (31 March 2021: GBP1,509 million).

In May 2021 S&P Global Ratings affirmed its rating of Stonewater as A+ with a Stable Outlook. On 31 March 2021, following an In-Depth Assessment, the Regulator of Social Housing confirmed its grading of Stonewater as G1/V1.

https://www.stonewater.org/media/5538/20210519-uksocialhousingproviderstonewateraratingaffirmedoutlookstable.pdf

https://www.gov.uk/government/publications/regulatory-judgement-stonewater-limited/current-regulatory-judgement-stonewater-limited-31-march-2021

Financing

Stonewater issued a GBP250 million sustainability bond on 3 September 2021, the first issue under its EMTN programme. The proceeds were lent to the Registered Providers in the Stonewater group where GBP98 million was used to repay existing term and revolving loan facilities.

Furthermore, on 15 September a deferred sale of GBP28m of retained bonds from a previous issue settled.

Operational performance

Overall customer satisfaction was 83%, slightly below the target of 84%.

Rent arrears are stable at 5.31% (March 21: 5.38%) and remain below our target. We continue to provide a range of well -- used support services to help our residents sustain their tenancies as outlined in our ESG report published earlier this year https://www.stonewater.org/media/5617/esg-report-2020-21-final.pdf .

The Group completed 430 new homes during the first half of the year (H1 2020/21: 217), all of which were for affordable tenures, and started work on 481 new homes. With the progress in the development programme, the pipeline is now for a further 5,100 homes by March 2025. Shared ownership sales generated an income of GBP18.0 million (H1 2020/21: GBP6.9 million) with a margin of 17% (H1 2020/21: 19%).

186 tenanted housing properties were acquired from Bromford Housing Group on 28 June.

Supporting our residents and communities

The Group continues to support our customers in a range of ways. For instance, our charity partner, Longleigh Foundation, continues to offer grants that make a huge difference to people struggling with severe financial hardship.

On cutting carbon emissions, Stonewater is committed to improving the efficiency of homes and we are pursuing a carbon-neutral approach to new developments. The Group is also leading the way with retrofitting and energy efficiency through projects such as the Oxford Energy Superhub and our work with Passivhaus.

Finally, w orking alongside Guinness, Stonewater has been named by Homes England as one of its largest strategic partners. The two organisations will be provided further funding of circa GBP250 million to build 4,180 high-quality, affordable homes by 2029. This is in addition to the GBP224 million awarded to the strategic partnership by Homes England in 2018 to build 4,500 homes by 2025.

Management

In accordance with the succession plan previously announced, Anne Costain assumed the responsibilities of Executive Director - Finance on 1 October. Following a selection process, Keith Reed has stepped up to the role of Director of Financial Operations and deputy to Anne.

*Q4 2020/21 figures are based on audited financial statements as of March 31, 2021.

ENDS

For more information, please contact:

Keith Reed, Director of Finance Operations, Stonewater - keith.reed@stonewater.org

Wendie Gardiner, Head of Communications, Stonewater - wendie.gardiner@stonewater.org

Disclaimer

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

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.

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 an 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.

www.stonewater.org

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