Metropolitan

Metropolitan Housing Trust (MHT) trading update and unaudited results for the year ended 31 March 2017

| Corporate

MHT, one of the UK’s leading providers of affordable housing and care and support services, announces unaudited results for the year ended 31 March 2017.

Highlights

  • Turnover up around 11% (2016: £238.4m)
  • Adjusted* operating surplus up around 3% (2016: £93.6m)
  • Reported operating surplus up around 14% (2016: £84.2m)
  • Total surplus before tax up around 13% (2016: £71.5m)
  • 832 new homes completed (2016: 371 homes)
  • £190m spent on new development (2016: £114m)
  • More than 17,000 independence steps achieved (2016: 7,282)

Adjusted figures are stated before a prior year £9.4m exceptional charge related to pension deficit reduction scheme obligations pursuant to the triennial valuation of the SHPS Pension scheme.

All comparatives have been adjusted to reflect a prior year adjustment in respect of the amortisation of shared ownership properties which increased revenue, operating surplus and total surplus by £3.5m.

Brian Johnson, Chief Executive of Metropolitan commented:

“This has been another good year of performance delivery, with 832 new homes completed and more than £190m spent on new developments. Despite the introduction of the rent income deflator, we have grown revenues by around 11% and total surplus by around 13%. We generated more than £37m of revenue from outright and first tranche sales (2016: £12.7m), achieving an average 31% sales margin (2016: 32%) in line with expectations. Our controlled pipeline comprises 5,803 units (2016: 3,410) and we are spending significant amounts, both on new developments and improvements to our existing estate.

“Metropolitan ends 2016/17 well-placed to grow organically with a strong pipeline, more than £420m (2016: £559m) of available liquidity and a strong S&P credit rating. Furthermore, our independence programme continues to exceed all its targets in making a meaningful difference to the lives of our customers. As I prepare to step down in July, I want to take this opportunity to thank the team at Metropolitan for all their support and hard work during my time as Chief Executive – and to wish them the very best for the future.”

Results overview

Turnover is around 11% higher than 2016. Lettings revenue (excluding supported housing) fell marginally while care and support business revenue (which includes supported housing) rose by 1% with £5m annually of new business won during the year. Revenue from first tranche sales was 180% higher, with total sales surplus (including outright sales) up around 185%. Margin on sales was 31% (2016: 32%), in line with our expectations. Adjusted* operating surplus is up around 3%, reflecting the improved sales performance. Adjusted* operating margin is around 36.2% (2016: 39.2%).

During the year we dissolved the St Martin’s partnership which resulted in stock swap disposal profits of £12m. Redemption and staircasing profits were down 17% year on year in line with expectations. Net interest and related finance costs (excluding fair value movements) were down 6% (2016: £49.1m) due to actions taken last year to repay some of our more expensive debt. Total surplus for the year is up around 13% (2016: £71.5m).

Housing development and investment

We delivered 832 (2016: 371) new units and invested £190m (2016: £114m) in our development pipeline, which increased 70% from 3,410 units last year to 5,803 at 31 March 2017. In completing the Transfer of Engagements for Clapham Park Homes into its Metropolitan parent, we have opened the way to funding the remaining phases of this landmark regeneration scheme and will be seeking full planning permission for the balance of the site later this year.

Debt and facilities

Net debt (excluding derivative financial instruments) at 31 March 2017 is up 10% (2016: £868m) as our development programme has stepped up. Available liquidity (cash and committed secured undrawn facilities) is more than £420m (2016: £559m). Gearing ended the year at around 59% (2016: 60%) and interest cover was around 3.1 times (2016: 3.0 times)

The Board will update investors regarding progress on appointing a new CEO in June and expects to announce full audited results for the year ended 31 March 2017 in July 2017.

 

Enquiries:

Please contact Donald McKenzie, Head of Corporate Finance, on 020 3535 4434 or at donald.mckenzie@metropolitan.org.uk

 

Notes

  • Operating margin is operating surplus/turnover
  • Net debt is borrowings (exc derivatives) plus cash and cash deposits
  • Gearing is gross debt /general reserves and grant
  • Interest cover is total surplus before interest, tax, depreciation/amortisation, / interest costs

Disclaimer

The information in this Preliminary Results announcement has been prepared by the Metropolitan Housing Trust group and is for information purposes only.

The Results announcement 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.

This unaudited preliminary announcement contains certain ‘forward-looking’ statements reflecting, among other things, our current views on markets, activities and prospects. 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.