TIDM60VT
RNS Number : 0691R
Paragon Treasury PLC
04 November 2021
Paragon Treasury Plc
Paragon Asra Housing Limited ('PA') trading update and unaudited
financial results for the period ended 30 September 2021
PA, the parent company of Paragon Treasury Plc and a Registered
Provider owning and managing over 23,000 homes in the East
Midlands, London and Surrey, announces its trading highlights and
unaudited summary financial results for the first half of the
2021/22 financial year.
Results for the year to date broadly align with a return to more
normal trading conditions, as the UK strives to recover from the
Covid-19 pandemic. PA has been working to clear the backlog of
transactions built up during 2020/21, particularly in relation to
new development completions, new shared ownership property sales,
vacant property re-lets, and repairs and maintenance programmes.
The approved 2021/22 budget reflected an expectation that these
catch-up activities would continue to introduce relative short-term
volatility to our results when compared to the medium-term
financial plan.
Over the first half of the year, PA has delivered an operating
surplus of GBP24.1m from turnover of GBP82.9m, equating to an
operating margin of 29 per cent. The net surplus after interest and
other adjustments is GBP9.4m. Total available liquidity is at
GBP442m, with a further GBP100m of retained bonds and work ongoing
to replenish certain bank facilities.
Financial and operational highlights
-- Average re-let days have steadily reduced as we tackle the
backlog of vacant properties which built up during the previous
year. Year to date performance for our general needs homes is at 54
days (2020/21 full year: 85 days).
-- Planned maintenance and building safety budgets, which were
increased this year to accommodate the works delayed during
2020/21, are largely being delivered with GBP22.1m spent in the
year to date (2020/21 full year: GBP28.4m).
-- The above amounts include fire safety remediation works to
some estates. This programme is progressing and in the meantime all
necessary interim measures are in place to keep residents safe.
Gross costs are currently estimated at GBP65m, potentially reducing
to GBP31m subject to cost recovery from other parties. The bulk of
the costs will be incurred in the 2022/23 financial year.
-- Sales of new build shared ownership homes have accelerated,
albeit lagging behind budget. 63 sales have completed, generating
proceeds of GBP9.4m and a surplus of GBP3.1m at a margin of 33 per
cent (2021/22 budget: 25 per cent).
-- Our successful GBP400m bond issue (of which GBP100m is
retained) in April 2021 secured ample liquidity to fund our 6,000
homes growth plan into the medium term.
-- To support delivery of our Sustainability Strategy we have
completed an energy efficiency assessment of all our homes. The
data collected will be used to draw up a prioritised work programme
to underpin our journey towards net carbon neutral status.
Focus on resident satisfaction
We absolutely recognise the need to ensure high levels of
satisfaction with our services, and we are determined to improve
upon the overall satisfaction result of 62 per cent which was
reported within our 2021 audited financial statements. We have
engaged TPAS, the acknowledged sector tenant engagement experts, to
analyse and provide insights into our satisfaction status. This
work has included fact-finding discussions with residents who have
responded to our surveys. A series of actions have been drawn up in
response. We will continue to report on our progress in this
critical area.
Outlook
PA's Board has accepted some short-term deviation from
established financial golden rules while we work to recover from
the pandemic alongside addressing the sector's emerging fire safety
requirements. Performance is being managed in line with this
modified plan, and our financial forecasts continue to evidence
ability to return strong metrics once these short-term issues have
worked through the system. Our plan to build 6,000 new social homes
in the 10 years to 2030 has not been compromised, with strong lines
of liquidity in place.
Statement of Comprehensive Income to 30 September 2021
Actual GBPm Budget GBPm Variance
GBPm
Rent and service charges income 68.8 70.1 (1.3)
------------ ------------ ---------
Shared ownership first tranche
sales 9.4 17.8 (8.4)
------------ ------------ ---------
Other income 2.0 1.6 0.4
------------ ------------ ---------
Amortisation of Social Housing
Grant 2.7 2.7 -
------------ ------------ ---------
Turnover 82.9 92.2 (9.3)
------------ ------------ ---------
Core operating costs (47.0) (46.2) (0.8)
------------ ------------ ---------
Depreciation (10.5) (10.5) -
------------ ------------ ---------
Cost of first tranche sales (6.3) (12.9) 6.6
------------ ------------ ---------
Surplus on fixed asset disposals 5.0 1.8 3.2
------------ ------------ ---------
Operating surplus 24.1 24.4 (0.3)
------------ ------------ ---------
Net interest (14.8) (14.2) (0.6)
------------ ------------ ---------
FRS 102 accounting adjustments 0.1 - 0.1
------------ ------------ ---------
Total comprehensive income 9.4 10.2 (0.8)
------------ ------------ ---------
Statement of Financial Position as at 30 September 2021
30 Sep 21 31 Mar 21
GBPm GBPm
Negative goodwill (6) (7)
---------- ----------
Tangible fixed assets and investments 1,920 1,876
---------- ----------
Current assets 128 127
---------- ----------
Current liabilities (55) (134)
---------- ----------
Total assets less current liabilities 1,987 1,862
---------- ----------
Creditors due after more than
one year (1,396) (1,280)
---------- ----------
Pension liabilities and other
provisions (25) (25)
---------- ----------
Total net assets 566 557
---------- ----------
Reserves 566 557
---------- ----------
Enquiries
All enquiries in relation to this trading update should be
directed to:
Simon Hatchman , Executive Director - Resources
Tel: 07720 087108
email: simon.hatchman@pahousing.co.uk
Disclaimer
The information in this preliminary announcement of interim
results has been prepared by Paragon Asra Housing Limited and is
for information purposes only. The announcement should not be
construed as an offer or solicitation to buy or sell any securities
issued by Paragon Treasury Plc or any other member of the Group, or
any interest in such securities, and nothing herein should be
construed as a recommendation or advice to invest in any such
securities.
This unaudited announcement contains certain forward looking
statements reflecting, among other things, our current views on
markets, activities and prospects. By their nature, forward looking
statements involve a number of risks, uncertainties or assumptions
that could cause actual results to differ materially from those
expressed or implied by those statements. Actual and audited
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. Financial results quoted are unaudited. We do not
undertake to update or revise such public statements as our
expectations change in response to events. Accordingly, undue
reliance should not be placed on forward looking statements.
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