Half-year unaudited financials

Paragon Treasury PLC

10 November 2025

 

Paragon Treasury Plc

Paragon Asra Housing Limited ('PA Housing') trading update and unaudited financial results for the six months ended 30 September 2025

PA Housing, the parent company of Paragon Treasury Plc and a Registered Provider owning and managing over 24,600 homes across the East Midlands, London and Surrey, announces its trading highlights and unaudited summary financial results for the first half of the 2025/26 financial year.

Overview

Performance for the year to date is broadly in line with budget, with some areas ahead of expectations. Operating surplus for the first six months is £27.5m, compared to a budget of £24.0m and H1 24/25 of £23.2m.  This has been driven by strong sales margins, other non-core assets disposals, and other operating cost and income benefits. However, there are emerging risks in service charge costs, and maintenance expenditure.

Key Highlights

·    Operating surplus: £27.5m YTD (H1 24/25 £23.2m)

·    Operating margin (overall, including sales): 24.9% YTD

·    Social housing operating margin (exc. fire safety): 23.5% YTD (H1 24/25 24%)

·    Shared ownership sales margin of 30.3% YTD (H1 24/25 28%)

·    Liquidity: Net liquidity covers 29 months

·    85% of drawn debt is at fixed rates of interest, limiting exposure to interest rate movements

Financial and Operational Highlights

Rental income was £88.1m for the six months, which is 3.5% higher than the same period last year (H1 24/25 £85.1m) due to rental inflation on existing homes and delivery of new rented homes over the year.

First tranche shared ownership sales have been progressing, with shares in 65 homes sold in the first half of the year, generating £8.3m turnover at a margin of 30.3%.

Other property sales surplus is slightly ahead of budget at £4.1m YTD (budget £3.5m) driven by strong staircasing performance in particular and continuing ad hoc value based non-core asset sales.

Responsive repairs and void repairs costs have been running materially to budget but the time taken to turnaround void repairs remains longer than we would like.

There have been 151 new development homes completions YTD, reflecting an expected slower rate of development than last year (H1 24/25 245 homes).

Areas of Focus

·    We are working to improve void repair turnaround times for vacant homes and this has a specific management team lead making process improvements. This has led to some improvements in total relet days on voids in recent months but there is still more to do.

·    We have seen increased service costs in some particular service chargeable areas relating to bulk rubbish, utilities and 3^rd party managing agents and we are working on action plans associated with these areas.

·    Cost associated with disrepair claims have been higher than budgeted and we are looking at ways to control this spend where possible.

·    Awaabs Law came into effect on 27 October 2025, which places a legal duty on social landlords to investigate and mitigate promptly when hazards such as damp and mould are identified. To prepare for this we've created a dedicated damp and mould team, updated our policies, contracts and frameworks as well as colleague training. We've introduced new reporting tools to monitor compliance.

·    Major capital repairs and development capital spend are running behind anticipated spend, which has reduced debt drawdowns compared to expectations but does mean some work may extend into future years.

·    Fire safety capital spend is running behind anticipated timelines due to Building Safety Regulator and other delays. However, we are progressing applications for grant funding that was not previously available to social housing providers and this may reduce total PA spend on these activities.

Outlook

There have been a number of UK Government policy announcements which are expected to be positive for the sector and PA but we await full detail. In particular the announced 10 year CPI+1% rent settlement and equal access to the Building Safety Fund (regardless of tenure) will be helpful and the September CPI was published at 3.8%, slightly above our expectations at the start of this year.

However, full detail is not yet available on potential rent convergence, the new Decent Homes Standard, grant rates and grant availability for the new Affordable Homes Programme and minimum energy efficiency standards.

As investors may have seen, our CEO, Michael McDonagh has announced he will be stepping down in calendar Q1 2026 having overseen a pivotal change in strategy. The Board is immensely grateful for his tenacity, leadership and relentless commitment over the last three years.

The Board and Executive team will ensure stability and continuity during this period for all our stakeholders and partners in continuing to deliver our strategy.

We continue to maintain a cautious financial posture while investing in homes and services. We have moderated our development ambition in our business plan to maintain financial strength and resilience to unknown potential events. Operational focus remains on improving void turnaround times, managing service charge costs, and progressing fire safety remediation.

Statement of Comprehensive Income to 30 Sept 2025 (unaudited)

	H1 2024/25 £m	H1 2025/26 £m
Rent and service charges income	92.7	97.5
Shared ownership first tranche sales	11.1	8.3
Other income	1.7	1.6
Amortisation of Social Housing Grant	2.8	2.8
Turnover	108.3	110.2
Core operating costs	(67.0)	(68.4)
Depreciation	(11.9)	(12.7)
Cost of first tranche sales	(8.0)	(5.8)
Surplus on fixed asset disposals	1.8	4.1
Operating surplus	23.2	27.4
Net interest	(22.3)	(22.2)
Total comprehensive income (before gift aid, tax, fair value adjustments)	0.9	5.2

Statement of Financial Position as at 30 Sept 2025 (unaudited)

	31 Mar 25 £m	30 Sept 25 £m
Negative goodwill	(4.2)	(3.9)
Tangible fixed assets - housing properties	2,355.0	2,372
Fixed assets - other	24.0	24.0
Investments	27.6	27
Current assets	103.1	96.2
Current liabilities	(62.8)	(46.8)
Total assets less current liabilities	2,443	2,469
Creditors due after more than one year	(1,794.6)	(1,814.2)
Pension liabilities and other provisions	(9.2)	(9.2)
Total net assets	639.9	645.1
Reserves	639.9	645.1

Note: The above 2025/26 half year figures are based on unaudited management accounts and are subject to change following audit.

Enquiries

All enquiries in relation to this trading update should be directed to:

Jessica Friend, Chief Financial Officer

Tel: [phone]

email: [e-mail]

Disclaimer

The information in this preliminary announcement of 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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