Sanctuary Capital PLC Final Results (5795R)

TIDM71WG

RNS Number : 5795R

Sanctuary Capital PLC

30 June 2020

News release

30 June 2020

Sanctuary Group issues strong financial results for 2019/20

Key highlights:

   --    Sanctuary reports revenue growth to GBP763m, up from GBP735.4m 
   --    Homes in management growth to 102,686, up from 101,281 
   --    Underlying operating surplus(1) of GBP182.6m, up from GBP181.0m 
   --    Cash generated from operating activities of GBP244.2m, up from GBP215.2m 
   --    Strength of balance sheet reflected in cash reserves of GBP261.5m 
   --    Interest cover 2.09

Summary Financial Results:

 
 
 Revenue                                 763.0     735.4 
 Cost of sales and operating exp. 
  (excl. restructuring)                (584.8)   (557.5) 
 Share of profit of joint ventures         4.4       3.1 
 Underlying operating surplus            182.6     181.0 
 Restructuring costs                     (2.6)         - 
 Other gains and losses                    6.2      22.7 
                                      --------  -------- 
 Operating surplus                       186.2     203.7 
 Net finance costs on borrowings       (124.2)   (125.7) 
 Other finance costs and derivative 
  movements                              (1.0)     (1.1) 
 Loan break costs                        (8.6)         - 
                                      --------  -------- 
 Surplus for the year before tax          52.4      76.9 
                                      ========  ======== 
 
 Underlying surplus for the year 
  before tax(2)                           57.4      54.2 
                                      ========  ========

Sanctuary Group has issued its audited financial results for 2019/20 which shows improved underlying performance and demonstrates the Group's strong financial position.

The Group, which manages 102,686 homes across England and Scotland, saw revenue grow to GBP763m, with an enhanced development programme and acquisitions offsetting the impact of the fourth year of the social housing rent reduction in England.

The underlying operating surplus of GBP182.6m represents a GBP1.6m improvement over the prior year (GBP181.0m in 18/19). Whilst this represents a slightly lower underlying operating surplus margin(3) of 23.9% (24.6% in 18/19), this is a positive result when taking into account a further year of rent reductions, compliance expenditure, increased staff costs and an impact from COVID-19.

Sanctuary's solid financial performance is built on its successful operations - key year highlights being rent arrears of 3.6% (3.8% in 18/19), void loss at 1.1% (1.1% in 18/19), 203 sales of new homes through the Group's development programme (150 in 18/19), and improved maintenance performance with an increase in customer satisfaction to 94% (93% in 18/19).

Net finance cost on borrowings, before loan break costs, was GBP124.2m, a decrease of GBP1.5m from last year. A tranche of legacy debt was repaid during the year, which will lower the interest cost to the business in the long-term, even after considering the GBP8.6m loan break costs.

The underlying surplus for the year before tax of GBP57.4m is GBP3.2m ahead of last year, reflecting the good underlying operating performance in conjunction with a lower interest burden.

The strength of the Group's balance sheet is reflected in the GBP261.5m of cash reserves (GBP150.1m in 18/19) which was increased by a GBP350m Bond Issue in April 2020 at a coupon of 2.375%. The Group has also maintained strong credit ratings of A2 stable and A+ stable from credit rating agencies Moody's and Standard & Poor's respectively.

Ed Lunt, Sanctuary Group Finance Director, commented: "Our financial results have been delivered through a strong operational performance reflecting the dedication of our people and the economic benefits of our national and diversified footprint. We remain in a strong position to face short-term challenges while continuing to deliver our long-term strategic objectives of investing in homes and providing housing and care to those in need."

Notes:

(1) Operating surplus before restructuring costs and other gains and losses

(2) Surplus for the year before tax excluding restructuring costs, other gains and losses, and loan break costs

(3) Underlying operating surplus as a percentage of revenue

- Ends -

Notes to editors:

Established in 1969, Sanctuary Group is responsible for the provision of social housing, care and management services across England and Scotland. It owns or operates over 100,000 units of accommodation and employs around 14,000 people.

The Group operates under a not for profit umbrella, with surpluses reinvested into the provision of affordable housing, the maintenance of existing properties, and the development of new services for customers.

Sanctuary is an exempt charity under the Charities Act 1993 and is regulated by the Regulator of Social Housing.

For more information please contact Gareth Holmes, PR manager, on 07824 525849.

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END

FR SDEFLSESSESM

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