Longhurst Group - Trading Update

Longhurst Group consolidated Trading Update for the period ending 30 September 2022

Longhurst Group ('LG') is today issuing its consolidated unaudited trading update for the six months ending 30 September 2022 ('2022/23 Q2'). All statement of comprehensive income comparatives are to LG's consolidated unaudited prior year equivalent period being the six months ending 30 September 2022 ('2021/22 Q2').

HIGHLIGHTS

Commenting on the results Rob Griffiths, Deputy Chief Executive and Chief Financial Officer said:

The group's results for the first 6 months of the financial year demonstrate some strong performance in several key areas. In particular our performance on first tranche sales has significantly exceeded our business plan target and we have a healthy forward plan of sales already agreed off plan for the remainder of the year. Our core general needs rental business continues to perform well with current tenant arrears at 1.97% at the end of September.

The ongoing impact of Covid, Brexit and the war in Ukraine are continuing to affect an already turbulent market. This has led to rising material and labour costs which present additional challenges to key workstreams as the Group balances delivery timetables and value for money.

In line with the rest of the construction industry we continue to experience some challenges linked to the availability of labour and materials which has caused some delays on our development programme and void works.

LG is in receipt of the letter from the Regulator of Social Housing requesting data held regarding damp and mould within properties. LG will be complying fully with the information request within the designated timescales.

DEVELOPMENT PROGRAMME

We continue to progress with our development programme using a prudent, risk-based approach, in line with our business plan assumptions and targets. Longhurst Group were successful in their bid for additional Homes England funding through the Affordable Homes Programme 2021-26, where 1,850 grant funded units with start on site before March 2026 and complete by March 2028

SHARED OWNERSHIP SALES

106 sales have completed as at Q2 achieving an average first tranche % of 50%. Most properties are being sold 'off plan' and are sold subject to contract with only two properties being unsold for greater than 6 months which is sold subject to contract and likely to be completed early into Q3.

As at 30 September 2022, LG, held 28 completed shared ownership homes as unsold stock of which 25 were 'sold subject to contract' and 3 'under offer'.

LG are forecasting a pipeline of further sales throughout the next 6 months with a forecast 23% profit in the current financial year.

REPAIRS RE-PROCUREMENT

Re procured via Competitive Dialogue (robust and detailed multistage procurement process that involves dialoguing and agreeing potential solutions), with 20% of the evaluation devoted to ESG.

Three contractors appointed from July 2022, 1 per region (East, South, West), helping to mitigate risks and providing more local focus and with the scope to widen and deepen the relationships as they mature.

Call handling and diagnosis brought in house to focus on improving customer satisfaction.

NET DEBT AND LIQUIDITY

As at 30 September 2022 LG has £50.0m of funding scheduled to be drawn on a deferred basis in 2023 and a further £143.2m secured undrawn loans. In the near term, our priority is on progressing extensions to revolving credit facilities with our relationship banks

ENVIRONMENTAL, SOCIAL, GOVERNANCE (ESG)

LG has recently adopted the Sustainable Reporting Standards for the sector and will be reporting against this in 2023.

We've continued to invest in our homes to improve their energy efficiency with 94 percent of our homes being EPC D and above, and 63 percent above C. All of our new homes (100 percent) have achieved EPC level B or above.

IMPROVING LIVES STRATEGY

Our Improving Lives Strategy reaffirms LG's commitment to focus our efforts into the two areas of health and wellbeing and economic resilience and delivering five key objectives between now and 2025

· Focusing on our customers and communities

· Delivering an integrated housing, care and support offer

· Providing the homes people want, where they're needed

· Building and maintaining great partnerships

· Our people and culture

KEY UPDATES

The Board of Longhurst Group Limited has approved the appointment of Chris Tyson as its new board member, with effect from June 2022.

Following Moody's rating action on taken on the Government of the United Kingdom (UK's) sovereign bond rating on 21 October 2022, Moody's changed the outlook from stable to negative for UK housing associations.

NON-DEAL INVESTOR UPDATE

Longhurst Group, is holding its non-deal annual investor update on Tuesday 29 November 2022. 

To register your interest, please email Newbridge at [email protected] , who will coordinate joining details

This trading update contains certain forward-looking statements about the future outlook for LG. Although the Directors believe that these statements are based upon reasonable assumptions, any such statements should be treated with caution as the future outlook may be influenced by factors that could cause actual outcomes and results to be materially different.

For further information, please contact:

Libra (Longhurst Group) Treasury PLC

Robert Griffiths

Leverett House

Gilbert Drive

Boston

Lincolnshire

PE21 7TQ