Posted on 29 July 2019
Hyde’s latest financial and operational performance results seek to demonstrate our focus on being able to withstand severe shocks to the housing sector, including a no-deal Brexit.
Our turnover increased by 33% to £450.2m in the year ending March 2019 (2018: £339.6m) and the core underlying surplus was up 31% to £134.5m (2018: £102.2m).
“The significant increases in both turnover and surplus are related predominantly to a number of developments being completed last year, improved operational efficiencies and steady income from the rest of the business,” said Group Chief Executive Elaine Bailey. “This enables us to deliver value for money, build more homes and invest in better customer services.”
Continuing customer focus
We continued to deliver on our ambition to reduce unnecessary customer contact and develop more digital solutions last year, to increase customer satisfaction.
“I am pleased to say we achieved 81.9% overall satisfaction in 2018/19, which puts us in the upper quartile of performance of the G15 – the group of London’s largest housing associations,” Elaine said. “We are also pleased to have been selected as a finalist for the 2019 Customer Experience Awards.”
Keeping residents safe in their homes
Resident safety remains a priority and, in response to the Grenfell Tower tragedy, we have completed comprehensive Type 4 fire risk assessments of all 86 of our buildings more than 18m high and is well underway with our £50m fire safety taskforce programme.
“We have removed unsafe cladding from nine of our buildings and been open and transparent with residents throughout this process, to reassure them and to help them feel safe in their homes. Remedial works are expected to continue in 2019/20,” Elaine said.
Building more homes
We set a target of completing 898 (2018: 1,217) homes last year and actually handed over 1,006 (2018: 1,285). Development sales grew significantly, to £250.4m (2018: £74.0m), through land and joint ventures.
“We are confident we are building the right homes, in the right places, at the right price points, with the right partners, to meet our future targets,” said Group Finance Director Peter Denton.
“At the year end, we had just 26 outright sale and 51 shared ownership homes awaiting sale, both within the Group and in joint arrangements; all had been completed after January 2019. On 30 June 2019, only 39 of these 77 homes remained to be sold, exchanged or reserved.”
Peter explained that while more than 90% of our development programme was land-led, partnering was a vital element of our ambitious new development strategy in 2019/20, which will see us expand our rolling five-year programme significantly, with construction of 8,400 homes planned over the coming five years.
“These homes will be delivered through other housing associations, local authorities, private partners and our strategic partnerships with Homes England and the Greater London Authority,” he said.
“This year, for example, saw the launch of Evera Homes, our innovative partnership with three other housing associations that aims to tackle the acute housing shortage in Cambridgeshire and Peterborough, enabling us to deliver homes at a much faster pace than we could each do alone. Evera Homes will unlock sites for more housing, delivering 2,000 homes by 2023.”
“In fact, we have aspirations to deliver 11,000 homes over the next five years, which will be achieved by forging new agreements with public and private sector partners. This will help us to attract further investment in affordable housing, in areas where it is needed the most.”
Solid financial performance
Peter explained that Hyde’s financial performance was broadly in line with the budgeted surplus of £135.6m.
“Operating margin is one of our key financial performance indicators. Excluding sales and fire safety costs, this was 36.3% in 2018/19, an increase of 3.2% compared to the previous year, and a 1.3% increase on budget, demonstrating we remain financially solid, despite the current economic and political uncertainty,” he said.
“Crucially, we are well placed to withstand any shocks in the market. We have adopted stress testing beyond the standard Bank of England proposals and our “no-deal” stress testing concluded we have all the funding already in place, to not only meet our next five year plan but to meet those objectives with the full stress applied.”
Peter, who will take over from Elaine Bailey as Group Chief Executive in September, explained we have been preparing for some form of bad Brexit-related news for the past few years.
“Around the time of the 2016 EU membership referendum, we decided to focus our development activities on outer London and more affordable commuter towns across the south east of England.
“This decision, combined with our approach to site acquisition, phased development, our use of partnering and joint ventures, and continued treasury management, has served us well.
“We had £2.1bn (2018: £2.1bn) of committed facilities and £606.6m (2018: £496.4m) liquidity at the year-end, while modestly deleveraging year-on-year. This liquidity is primarily retained as an insurance policy and is not intended for planned drawing. Break costs were incurred in the year of £6.7m (2018: £88.9m).”
Fitch awarded Hyde an A+ Stable rating in March 2019, complementing its A Stable rating from S&P, which was re-affirmed in July 2019. Through a comprehensive asset security reorganisation, we have £1.4bn of unsecured assets.
“We are optimistic about the future: the need for truly affordable housing is growing and there are signs the issue is becoming an even greater priority for government. We believe we will continue to play a crucial role in helping people build better lives for themselves, by providing landlord services that meet their ever-changing needs and by building, and maintaining, safe, secure and stable homes and communities.”
The Hyde Group’s financial statements will be published at the beginning of August.
Summary financial statementsClick on image for summary financial statements (PDF, 598KB).
 Before fire safety and break costs, derivative and fair value movements.