Affinity Sutton Capital Markets PLC Statement from Affinity Sutton (7154I)

TIDM51GC

RNS Number : 7154I

Affinity Sutton Capital Markets PLC

11 December 2015

Statement to Lenders and Investors on behalf of the Board of Affinity Sutton

The Boards of Affinity Sutton Group and Circle Housing Group hereby announce that, following agreement of a business case to merge at Board meetings on 10 December 2015, they have agreed to proceed with the merger process.

The two Groups have decided that consolidation will result in a stronger business model, better able to build more new homes and provide greater investment in local communities. The proposed new Group will be one of Europe's largest housing associations with 127,000 properties, providing homes for nearly 500,000 people.

There is an acute shortage of new housing in the UK. The country needs 250,000 new homes a year, and yet only around 140,000 are being built. The proposed Group will have the ambition to deliver 5,000 new homes annually, with 50,000 homes being built in the 10 years from 2019, around 30,000 more homes than the planned output of the two individual Groups. We would expect the proposed new Group to be among the top five house builders in England by volume.

Furthermore, changes in government policy provide a further catalyst for the sector to work more efficiently and the Boards believe that consolidation will create a business more resilient to the impact of government reforms.

Work will commence immediately to make arrangements for the planned merger to be concluded by the Summer of 2016. As key partners for both Groups, lenders and investors will be an essential part of that process. We will make further contact with lenders and investors in the New Year and both Groups look forward to continuing these positive relationships in future years.

For further information please contact:

Mark Washer, Group Finance Director, Affinity Sutton Group on

mark.washer@affinitysutton.com or 07803 512 658

Alex Hunter, Marketing and Communications Director, Affinity Sutton Group on alex.hunter@affinitysutton.com or 07736 621 366

This information is provided by RNS

The company news service from the London Stock Exchange

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December 11, 2015 02:01 ET (07:01 GMT)

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