Funders Day 2017 Paul Hodgkinson NHHT Chair Agenda Chairs - - PowerPoint PPT Presentation

Notting Hill Housing Group

Funders Day 2017

Paul Hodgkinson – NHHT Chair

Agenda

Paul Hodgkinson Board Chair Kate Davies Chief Executive John Hughes Group Development Director Paul Phillips Group Finance Director

• Chair’s Introduction
• Chief Executive’s

Presentation

• Group Development

Director’s Presentation

• Group Finance Director’s

Presentation

• Questions and Answers

2

Funders Day 2017

Our Strategy - Kate Davies

Chief Executive

Summary

• It’s been a very good year:

– Financially – Operationally

• Economic and political changes create uncertainty

but provide challenges and opportunities for us

The Bloom in Hammersmith and Fulham4

Our Strategy

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Our Residents

Altogether Better

• PRH Customer Satisfaction

Index - 75%

• Void Turnaround - 24 days

(23 days 16/17)

• Group Income Collection -

100.81% (100.86% 16/17)

Figures as at October 2017

6

Our Homes

Active Asset Management

• 74 homes sold (£26.3m)
• 562 family homes acquired

Old Castle Street, Tower Hamlets

Of which:

− 56 went to disposal boroughs − 254 to host boroughs − 73 to moves − 178 to NHCH − 1 as a reciprocal

• ffer

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Providing More New Homes

• 1,571 plots acquired so

far this financial year

• Planning submitted for

541 homes

• And 589 homes

completed

• Effective land buying

team

Westgate Centre, Hackney

• More complex estate

and town regeneration

• pportunities

8

Our Financial Strength

Royal Albert Wharf, Newham

• Assets valued at £11.9bn
• 2016/17 surplus of £142.2m (2016:

£125.4m), leading to closing reserves of £2,253.6m (2016: £2106.8m)

• Operating

margin of 35%

9

Digital Transformation

• £7m investment

– Re-invented processes – Working with technology partners (integrating Legacy to Cloud and web/mobile)

• Incremental cost reductions

– 3-year payback – Automation & efficiency – Operational integration through Digital with partners (eg Wates and Plentific)

• Resident self-service
• Real-time data

10

Our people and our work

• Staff Satisfaction

improved to 87% – up in 17 of 30 questions

• Improved management

development

• 70%+ recruited from

within

• IIP Gold

11

Closer partnerships

• Local authorities e.g.

Haringey, Southwark, Greenwich, Barnet and Hounslow

Lampton Road, Hounslow Topping out ceremony

• TfL
• Private sector partners

12

The merger

• Genesis HA
• Similar history and

values

• Adding assets,

relationships and

• ther resources

13

Challenges remain

• Housing in London is not

affordable

• Difficulty of creating

affordable supply

• Grenfell
• Issues for residents e.g.

welfare reform

• Market Sale Risk
• Digital services

14

Funders Day 2017

Our Development Programme John Hughes

Locations of Schemes

16

Acquisitions

2016/17 3,102 2017/18 485 (ytd)

17

Starts on Site

2016/17 2,425 2017/18 635 (ytd)

18

Completions

2016/17 1,152 2017/18 326 (ytd)

19

GLA Programme

Grant £172m, nearly 5,262 homes funded to 2021

20

Planning Permissions

4 schemes, 1,433 new homes

21

New Opportunities

• Transport for

London development panel framework – Landmark Court

• GLA – Gallions 3B
• LB Havering –

Rainham

• LB Brent – South

Kilburn Estate

22

Funders Day

Finance Presentation

Funders Day 2017

Our Finances – Paul Phillips

Introduction

I will cover:

• 2016/2017 Results
• 2017/2018 Results to date
• NHH Exposures
• Future prospects
• Comment on merger

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2015/2016 Results

2016/2017 Results

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2016/2017 Results

Will comment on the entities with external debt:

• Notting Hill Housing Trust
• Notting Hill Home Ownership

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Group Revenue Account

Key facts

• Surplus up by 14% from £125m to

£142m

• Turnover down by 1% from £415m to

£412m

• Turnover from Social Housing lettings up

by 4% from £215m to £223m

• Surplus excluding sales up from £37m to

£56m

• Surplus on sale of existing properties up

from £27m to £32m

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Group Balance Sheet

Key facts

• We invested £373m (2016: £314m) in

new housing

• £26m of Grant receivable (2016: £6m)
• Housing at cost now £3,065m (2016:

£2,927m) - VP value over £11.9bn

• Borrowings up from £1,298m to £1,336m
• Gearing 42% - from 43% in 2016

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NHHO Revenue Account

Key facts

• Turnover (excluding intercompany) down

by £22m (16%) to £120m

• Surplus before gift aid decreased from

£72.2m to £66.6m.

• Gift aid to NHHT and Notting Hill

Community Housing of £58m (2016: £75m)

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NHHO Balance Sheet

Key facts

• Invested £204m (2016: £199m) in new

housing

• Properties held for sale stood at

£196.4m, of which £79.2m was for sale to other Group members

• £16.7m of properties held for sale

represented finished homes

• Housing assets at cost stood at £619m
• Borrowings up from £306m to £389m

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Folio London Limited

• Folio London’s purpose is to operate Notting

Hill Housing’s market rent portfolio

• The number of homes owned and managed

by Folio increased from 517 to 736 during the year due to the sale of one scheme of 106 units from Presentation Market Rent with the remaining coming from new build units.

• At 31 March 2017 the value of investment

properties was £142m (2016: £139m)

31

2017-2018

Results to date

32

Key events so far

In the last year:

• Results have held up well so far - with the

half year surplus £14m above budget.

• Moody’s has downgraded us from A2

(negative) to A3 (stable) as a result of the changes to the sovereign.

• Moody’s commented adversely on

treasury policy breach (maintaining 11 months’ cover for future uncommitted expenditure rather than 18 during merger discussions).

• S&P rating unchanged at A+ (-ve outlook)

33

Sales to date

As at 31 October, the position was as follows.

• We had sold 73 shared ownership homes

at a surplus of £5.4m.

• We had sold 58 outright sales homes at a

surplus of £9.9m. In general, sales continue well, and we have a further 146 shared ownership and 80

• utright sales expected for the remainder of

this financial year.

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Other Points

Unaudited position to 30 September 2017

• Board budgeted surplus of £88m for the

full year

• Budget surplus lower than last year due to

fewer sales.

• Surplus to 30 September - £60.8m
• Full year surplus should exceed budget -

before mark to market effects

• 186 staircasing sales - surplus of £13m

35

Statement of Comprehensive Income (£m)

Group Half year to 30 Sept. 2016/17 Actual Budget Actual Turnover 175.5 189.1 411.7 Cost of sales (29.7) (39.1) (87.7) Operating costs (81.6) (83.5) (178.4) Operating surplus 64.2 66.5 145.6 Surplus - asset disposals 15.3 3.8 32.1 Net interest payable (21.4) (23.6) (44.4) Gains/(losses) - derivatives 2.9

• 8.8

Surplus before tax 60.8 46.7 142.2

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Statement of Financial Position (£m)

Group - Actual As at 30 Sept. As at 31 Mar. ’17 Actual Actual Housing properties 3207.6 3,149.7 Other fixed assets 587.3 509.6 Net current assets (excl. debt) 362.8 314.5 Debt (1,467.5) (1,336.3) Other long term liabilities (373.8) (383.7) Net assets 2,316.4 2,253.8 Reserves 2,316.4 2,253.8

37

Consolidated cash flow (£m)

Group - Actual Half year to 30 Sept. 2016/17 Cash from operations 16.8 161.6 Net interest paid (38.4) (62.8) Purchase & construction of housing (141.9) (261.6) Sale of housing properties 35.2 71.9 Investment in joint ventures (0.9) 8.2 Net debt drawn/(repaid) (131.2) 36.4 Other (4.0) 21.8 Increase/(Decrease) in cash (2.0) 24.5

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30 September 2016 ratios

Gearing Interest Cover NHHO 67% 1,517% NHHT 51% 328%

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Notting Hill Housing Trust

NHH Exposures

Exposures

Page 40

NHH exposures - build for sale

2017 2016 No £m £m Vacant plots 2,351 73 117 On site - spent 856 166 120 On site - committed

• 231

115 Completed homes unsold 41 16 18 Total 3,207 468 352

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As at 29/11/2017

House price risk

Points to note:

• We have contracted for sale of £8m of

the homes on site

• We started 625 homes for sale in the

last year and expect to start 305 in the next year

42

NHH exposures - shared ownership

2017 2016 No £m £m Vacant plots 1,886 65 76 On site - spent 1,291 181 117 On site - committed

• 262

140 Completed homes unsold 94 27 19 Total 3,177 508 333

43

As at 29/11/2017

NHH exposures - land bank

2017 2016 No £m £m Plots for rent 768 6 13 Plots for shared ownership 1,886 65 76 Plots for outright sale 2,351 73 117 Plots for market rent 392 10 12 Total 5,397 154 218

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As at 29/11/2017

NHH - current loan book 31 October 2017 £m Drawn at variable rates 163 Drawn at variable rates - hedged 240 Drawn at fixed rates 1,271 Drawn on an index linked basis 30 Total drawn 1,704 Undrawn and committed 574 Total 2,278

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Also holding £217m in cash

Future Prospects

Page 46

Prospects

• Initial view of 2017/2018 budget suggests a

group surplus similar to 2016/2017budget (excludes MtM of derivatives)

• We continue to build and hope to start

c2,100 homes this financial year

• We hope to secure a £200m loan from the

European Investment Bank in early 2018.

• We hope to complete the merger with

Genesis early in 2018.

• Long term plans show the Group, the Trust

and NHHO in a healthy position

47

Merger with Genesis - Progress

Announced a merger with Genesis Housing in July 2017. Expect to amalgamate the two organisations, subject to banking negotiations and shareholder approval. Genesis’ credit rating is two notches below NHHT. S&P have said they do not currently expect the merger to be credit negative for NHHT. Moody’s have said they will not comment until early 2018 - shortly before completion.

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And finally…

If you have been…..

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And finally…

If you have been….. Thanks for listening

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