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AmicusHorizon Fin (20SY)

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Tuesday 14 November, 2017

AmicusHorizon Fin

OPTIVO Half Yearly Financial Report 30 Sept 2017

RNS Number : 4355W
AmicusHorizon Finance PLC
14 November 2017
 

OPTIVO TRADING UPDATE

On 22 May 2017 AmicusHorizon Finance Plc's parent company, AmicusHorizon Ltd, amalgamated with Viridian Housing to form Optivo. Both AmicusHorizon Finance Plc and Optivo are rated A2 by Moody's.

This is an unaudited trading update for Optivo for the six months ended 30 September 2017 ("H1 2017/18").

Highlights

Comparators in this trading update are the unaudited proforma sum of results for AmicusHorizon and Viridian for the first half of the previous financial year ("H1 2016/17").

·     Turnover £159m (H1 2016/17 £161m)

·     Operating surplus £64m (H1 2016/17 £66m)

·     Surplus before tax £44m (H1 2016/17 £45m)

·     Operating margin 31% (H1 2016/17 35%)

·     Net interest costs £20m (H1 2016/17 £22m)

The government announcement of rent certainty for five years from 2020, at CPI+1%, is welcome. The inflation link in rents is a key component of our business model and government recognition of this is reassuring.

Our focus at present is on operational integration. We expect all core IT systems to be integrated by Summer 2018. Our leadership team is in place and staff restructures are commencing.

At the point of amalgamation we restructured £800m of bank loans to align covenants and release capacity for investment in new homes. Our development programme is now expanding to take advantage of this capacity, bolstered by Strategic Partner status with the GLA

Operations

At the end of September 2017 our strategic KPI performance was as follows:

·     We're achieving a net promoter score of 65 for resident satisfaction (annual target: 50)

·     We helped 408 people into jobs and training (September target: 436)

·     29% of residents are using our services online (September target: 31%)

·     We're forecasting an end of year operating margin of 29% (annual target: 29%)

·     83% of staff feel proud to work for Optivo (annual target: 70%)

·     74% of staff say Optivo is a great employer (annual target: 70%)

For our core business of General Needs, Supported Housing and Housing for Older People operational income KPIs for Optivo were as follows. Comparators given are to AmicusHorizon at the end of March 2017.

·     At the end of September 2017

Total rent arrears were £7.9m, or 3.52% of annual rent debit (Mar 17: £4.4m, 3.31%)

Rent arrears of 0 to 4 weeks were £3.1m or 1.36% (Mar 17: £1.9m, 1.49%)

Rent arrears of 5 to 6 weeks were £0.8m or 0.36% (Mar 17: £0.4m, 0.34%)

Rent arrears of 7 to 12 weeks were £1.6m or 1.73% (Mar 17: £0.9m, 0.67%)

Rent arrears of 13 weeks or more were £2.4m or 1.07% (Mar 17: £1.1m, 0.81%)

·     In the financial year to 30 September 2017 the average time to re-let vacant property, excluding voids for major works, was 26 days. For the full year 2016/17 the AmicusHorizon equivalent time was 15 days.

Investment and Sales

At 30 September we were in contract to deliver 1,819 homes across 51 sites, with remaining capital commitments on these sites of £321.1m. We completed 144 homes in the half year and expect to complete 691 homes by end of March 2018. We had 39 unsold Shared Ownership 1st tranche properties, and 3 open market sale unsold units.

Liquidity

At the end of the half year we had available undrawn facilities of £225m and £58m cash and deposits available. Our outstanding debt balance was £1,030m.

Unaudited Financial Results

Unaudited financial results for H1 2017/18 are below, together with comparatives for H1 2016/17 and the full year 2016/17.  

Statement of Consolidated Income

 

H1 2017/18

(£m)

H1 2016/17

(£m)

2016/17
(£m)

Turnover

159

161

347

Cost of Sales

(9)

(8)

(23)

Operating Expenditure

(100)

(96)

(203)

Surplus on disposal of fixed assets

14

9

29

Operating Surplus

 

64

66

150

Surplus on commercial property disposals

-

-

1

Interest receivable

1

1

1

Interest and financing costs

(21)

(22)

(44)

Fair value movements

-

-

1

Surplus before taxation

44

45

109


Notes:

·     The half year figures exclude movements in the fair value of investment properties, movement in the fair value of financial instruments, pensions adjustments, and the unwinding of impairments previously taken. These items are reviewed as part of year end accounting processes.

·     Full year 2016/17 results included one-off acquisition gains of £21m arising from accepting a transfer of engagements from Southwark and London Diocesan HA and the St Martin's Estate (Lambeth) stock transfer.

Loan restructures in May 2017 have caused accounting hedging relationships with standalone swaps to be broken, though the economic hedging relationships remain. Our full year 2017/18 accounts will show the full balance of the hedge reserve unwinding through the Statement of Consolidated Income into the income and expenditure reserve.

Proforma

To aide investors in analysing Optivo, during August we published a non-statutory and unaudited set of financial statements for Optivo as the combined financial statements of AmicusHorizon Ltd and Viridian Housing. This can be found on the investors' section of our website.

Next Update

We will publish a full year financial update after 31 March 2018.

Contact

Tom Paul, Director of Treasury & Risk on 0208 726 8763 or [email protected].  

Further information is available on our website https://www.optivo.org.uk/about-us/Investors.aspx.

Disclaimer

This update contains certain "forward-looking" statements reflecting, among other things, our current views on markets, activities and prospects.  Actual 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.  No reliance should be placed on the information contained within this update. We do not undertake to update or revise such public statements as our expectations change in response to events. This update is neither recommendation nor advice. This is not an offer or solicitation to buy or sell any securities.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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