Trading Statement

RHP Finance PLC

14 August 2025

 

RHP Group trading update for the year ending 31 March 2025

·    Richmond Housing Partnership Group (RHP), including RHP Finance PLC, is today issuing its consolidated trading update for the year ended 31 March 2025.

·    These are classified as unaudited as the external audit work is not yet finalised, so they are for information purposes only.

·    We are presenting our results excluding an exceptional one-off item which represents a material impairment* of £12.7m on a legacy scheme. This ensures our underlying operating performance is not distorted and enables more meaningful comparison across financial years.

Highlights for the period ending 31 March 2025 excluding impairment of £12.7m where applicable

·    RHP Group own and manage 11,179 homes (2024: 10,805 homes)

·    Turnover for the period was £82m (2024: £71m)

·    Social housing lettings turnover contributed 88% of total turnover (2024: 86%)

·    Operating surplus (including asset sales) for the period was £15m (2024: £16m)

·    Operating margin on social housing lettings was 20%  (2024: 24%)

·    Overall operating margin (including asset sales) was 19% (2024: 23%)

·    Overall operating margin (excluding asset sales) was 17% (2024: 21%)

·    Net margin on shared ownership (first tranche) was 3% (2024: 12%)

·    The surplus/(loss) after tax and pensions for the period was £8m (2024: £10m)

·    Asset gearing at the year-end was 58% (2024: 55%)

·    Return on capital employed for the period was 2.8% (2024: 3.2%)

Commenting on the results, Laura Awosile, Interim Executive Director of Finance, said:

We are pleased to publish our unaudited financial results for 2024/25.

The Group's operating surplus (excluding £12.7m impairment) is £15m (2024: £16m) with an operating margin of 20% (2024: 24%). Our turnover grew to £82m (2024: £71m) reflecting an increase in income from social housing lettings through annual rent reviews and additional income received from two stock acquisitions in the year, reflecting our growth strategy. 

Acquisition of stock and the development of new housing stock has had a positive impact on our turnover. The stock acquisitions in year delivered over £1m in turnover (2024: £nil), and first tranche sales of shared ownership properties in the year has generated income of £3.6m (2024: £2.7m). Our operating costs increased as we invested in our homes and repairs service. The challenges we have faced with the repairs service also led to knock on costs of dealing with complaints and disrepairs claims. Our operating surplus (excluding impairment) fell to £15m (2024: £16m).

The reduction in operating surplus and margin, alongside the increase in social housing cost per unit, reflects the ongoing impact of inflationary pressures, increased investment in our repairs and maintenance service, and wider cost challenges facing the sector. Our social housing cost per unit has increased to £6,915 (2024: £6,049), which has been impacted by the areas discussed above.

We invested £15.9m (2024: £15.0m) in improving existing homes and built 52 new sustainable and accessible homes for local people.

Despite challenging economic conditions with rising inflation, we continue to operate in an environment of strong financial control, ensuring we prioritise our spend in alignment with our strategic objectives and value for money. In line with our strategy, we have increased investment in our asset portfolio, enhancing the quality, safety and security of our homes for our customers. We also invested in service improvements to address repairs performance challenges and reduce complaints volumes, supporting improved customer outcomes and regulatory compliance.

Following the mutual decision to end our repairs partnership,, we are investing in our transition to an in-house repairs service delivery model in October 2025. We are hopeful that 2026/2027 will deliver lower repairs costs, an improvement in our repairs service, faster turnaround of repairs and increased customer satisfaction.

The Group retains £100m in undrawn revolving credit facilities and manages liquidity to ensure obligations are met without holding surplus cash.

The Group's total comprehensive income excluding impairment was £7.7m (2024: £8.6m) and RHP's subsidiary, Co-op Homes (South) Limited has contributed £0.5m (2024: £0.6m) to this overall position.

Our return on capital employed excluding the impact of impairment has increased to 2.8% (2024: 2.3%), reflecting improved utilisation of invested capital. The increase was supported by the stock acquisition during the year, enhancing our asset base and future rental income potential.

Our EBITDA-MRI interest cover (before impairment) at 103% (2024: 137%) demonstrates our strategic choices from investing in improvements to our repairs service and in major works to existing homes.  Excluding the one-off impairment, the results demonstrate a strong underlying performance, with sufficient capacity to support the investment needed to maintain our homes to a good standard.

We will be publishing our audited results in September.

Our credit rating:

Following a reassessment in June 2025 by S & P Global, we are pleased to confirm we retained our A credit rating with a negative outlook, reflecting our strategic choices. We are addressing the issues with our repairs service, by bringing it in-house by autumn this year, which will have a positive impact on our financial outlook over the coming years. We have made the decision to continue to invest in improving our repairs service and in the safety of our homes, whilst improving the energy efficiency of our homes as we work towards our sustainable targets.  Our investment in providing more affordable homes in our local communities has continued through the acquisition of 305 homes during the year, alongside our steady continued development of new homes. We will continue to maintain our strong liquidity position, evidenced by our ample financial facilities.

*The impairment of £12.7m, which has impacted our financial results and metrics relates to a legacy development scheme where RHP entered into contract in 2017, and started on site in 2018. There were delays to the project, initially due to planning, then Covid, as well as issues with labour and materials following Brexit. We terminated the developer's contract due to non-performance. We have impaired the scheme as subsequent assessment concluded that the building may need to be reconstructed to comply with current building safety act regulations, which were not in place when the planning application was submitted and approved in 2017/18.

Unaudited Financial Information

Statement of comprehensive income	31 March 2025 Actual	31 March  2024 Actual
Turnover from social housing lettings	£72m	£61m
Turnover	£82m	£71m
Operating surplus (including asset sales, before impairment)	£15m	£16m
Operating surplus (including asset sales, after impairment)	£3m	£16m
Surplus/(loss) after tax and pensions (before impairment)	£8m	£10m
Surplus/(loss) after tax and pensions (after impairment)	(£5m)	£10m
Margins	31 March 2025 Actual	31 March  2024 Actual
Operating margin ₁ on social housing lettings ₂	20%	24%
Overall operating margin ₃ (including asset sales, before impairment)	19%	23%
Overall operating margin ₃ (including asset sales, after impairment)	3%	23%
Overall operating margin ₃ (excluding asset sales, before impairment)	17%	21%
Overall operating margin ₃ (excluding asset sales, after impairment)	1%	21%
Operating margin on shared ownership sales (first tranche) ₄	3%	12%
Key financial ratios		31 March 2025 Actual
EBITDA MRI Interest cover (before impairment)₅		103%
EBITDA MRI Interest cover (after impairment)₅		(31%)
Gearing ₆		58%
Liquidity		31 March 2025 Actual
Cash, short term investments and undrawn facilities ₈		£112m
Retained bonds₉		£25m
Unencumbered stock (EUV-SH)		£138m
Credit rating
S&P June 2025		A (negative)

Notes:

₁ Operating surplus / Turnover

₂ General Needs, Supported housing, Affordable rent and Low-cost home ownership tenures

₃ Operating margin including asset sales includes all activity; operating margin excluding assets removes gain or loss on disposal of assets including first tranche shared ownership sales

₄ Operating surplus on first tranche shared ownership sales / Turnover from first tranche shared ownership sales

₅ (Operating surplus + Depreciation + Amortisation - Capitalised major repairs) / Net interest paid

₆ Net Debt / Housing assets at historic cost

₇ Net debt / Total units owned & managed

₈ Cash, deposits, undrawn loans and RCF

₉ Retained element of RHP Finance PLC 2048 bonds

This trading update contains certain forward-looking statements about the future outlook for RHP Group. These have been prepared and reviewed by RHP Group only and are classified as unaudited, as the external audit is not finalised. Forward looking statements inherently involve a number of uncertainties and assumptions. Although the Directors believe that these statements are based upon reasonable assumptions on the publication date, any such statements should be treated with caution as future outlook may be influenced by factors that could cause actual and audited outcomes and results to be materially different.

Additionally, the information in the statement should not be construed as solicitation or recommendation to invest in RHP's bonds.

For further information, please contact:

Laura Awosile, Interim Executive Director of Finance

RHP Limited

e: [e-mail]

w: https://www.rhp.org.uk/rhpui/investors

 

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