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Our financial results 2019/20

Posted on 31 July 2020

The Hyde Group announces another solid performance in the year ending 31 March 2020; delivering a healthy surplus, maintaining a robust balance sheet and sector-leading funding position while prudently managing development and the potential impact of COVID-19.

This has enabled us to realise our ambition to invest in existing stock and provide more much-needed homes at discounted rent or shared ownership for those who otherwise could not afford one. We have a clear 2050 Strategic Plan, “A great home for everyone “, that is comfortably reflected in the progress made in 2019/20:

  • Adjusted surplus (1) rose 20% to £161.3m (2018/19: £134.8m)
  • Surplus before tax & derivatives of £115.7m (2018/19: 114.4m)
  • Customer service and repairs satisfaction at 83% (2018/19: 82%) and 84% (2018/19 85%) respectively
  • COVID-19 impact minimised due to flexible working, investment in technology
  • Highest ever staff engagement score of 86% (2018/19: 82%) and Investors in People Gold Award reaffirmed for ninth year running
  • Total investment in fire safety programme (Safer Homes) of £48.9m (2018/19: £28.6m)
  • Proactive response to risk environment by reducing new build delivery to 687 homes (2018/19: 1,006) with minimal unsold stock of 77 homes (2018/19: 77) at year end
  • Increased total provisions for bad debts to £12.1m (2018/19: £4.2m) in response to COVID-19 impact
  • Further reduction in gearing to 44.7% (2018/19: 50.4%) with liquidity at an all-time high of £828.3m (2018/19: £606.6m)
  • Regulatory In Depth Inspection reconfirmed G1/V2 ratings in April 2020 and reaffirmation of S&P rating A (stable) in July 2020 and Fitch rating of A+ (negative) in May 2020
  • £723m of social value created (2018/19: £553m)
  • Reserves of £609.1m (2018/19 £504.4m) doubling over the last five years.

Peter Denton, Chief Executive Officer, said: “This year’s results provide a sensible platform from which to grow, not only through the short term COVID-19 crisis, but also in the medium and longer term, helping us meet the ambitions of our 2050 Strategic Plan that we launched in April.

“I’m really pleased with our customer service performance at 83% and truly humbled by how our staff and partners have risen to the challenge of COVID-19, delivering over 50% of normal services during lockdown and providing extra support to our most vulnerable customers.

“We have also been careful to manage development risk arising from both Brexit and COVID-19 and were pleased to have only 77 homes unsold at the 31 March 2020, of which 52 were sold, exchanged or reserved by 30 June 2020.”

Rod Holdsworth, Chief Financial and Resources Officer, commented: “Our adjusted surplus of £161.3m (2018/19: £134.8m) demonstrates our strong financial delivery this year. Our core operating margin at 31.8%(2)  (2018/19: 36.3%), has remained consistently above 30% for the last five years, with additional investment in data and customer service this year.

“During the year we have strengthened our funding position having £2.2bn (2018/19: £2.1bn) of committed facilities and £828.3m (2018/19: £606.6m) liquidity at the year-end. This provides a very robust position from which to weather the short- and long-term effects of COVID19. This liquidity is three times our anticipated funding requirement over the next 18 months. This strong position was supported by the reaffirmation last week of S&P’s annual rating of A (stable outlook) and previously Fitch’s A+ (negative outlook) in May 2020. Both these complement the G1/V2 rating reaffirmed by the Regulator in April 2020.”

Recent trading

While new home sales volumes have been impacted by the lockdown during COVID-19, our core rental income has proved resilient with a collection rate for three months to 30 June of 98.3% (Prior period: 94.1%) and a stable rent arrears at 5.2% at June 2020 (30 March 2020: 4.8%). Since the easing of lockdown, sales volumes are recovering, and we have not experienced any significant change in market pricing.

Notes:

  1. Surplus before tax and derivatives adjusted to exclude the impact of one-off (non-core) activities and accounting impacts, giving our underlying core position
  2. Core operating margin excluding sales and adjusted items

Summary financial statements 2019-20 (PDF, 143KB)

Full consolidated report and financial statements 2019-20 (PDF, 29MB)

Full financial report 2019-20