25th Jul 2007 07:00
Inspace Plc25 July 2007 Press Release 25 July 2007 Inspace plc ("Inspace") Pre-close Statement Inspace plc (AIM:INSP), one of the UK's leading specialist service providers tothe social and affordable housing market, will announce its interim results forthe six months ended 30 June 2007 at 0700 a.m. on Tuesday 25 September 2007. Ananalyst briefing will be held at 0900 a.m. that day at the offices of DresdnerKleinwort, 30 Gresham Street, London EC2P 2XY. The Directors are pleased to confirm that the trading outcome for the half yearis expected to be ahead of consensus forecasts. Revenue growth wasparticularly strong, helped by the improved order book position entering theyear and by less seasonal distortion in customer spending patterns thanpreviously experienced. With an increasing proportion of Social Housing workcoming from Registered Social Landlords (RSL's), the business is now lessaffected by the local authority budget cycle. The outlook for the full year, which ends on 31 December 2007, remains in linewith consensus estimates. Social and Affordable Housing Social Housing is the largest division, representing approximately 70% of Grouprevenues. The division is focused on building sustainable, socially integratedcommunities through mixed tenure development precisely aligned with currentGovernment policy. Margins have been strong in regeneration and new homes, which now representsover two-thirds of Social Housing revenues, outweighing some margin pressure inmaintenance and stock reinvestment where competition is growing and keyperformance indicator targets, which influence incentive payments, are becomingmore stretching. Other Government initiatives such as replacing the Housing Corporation Grantwith development cross-subsidy and building more environmentally efficient homesalso play to the Group's strengths and strategies. Inspace welcomed the Government's recent commitment to substantial long-termgrowth in affordable housing. In the words of the new Prime Minister: "Puttingaffordable housing within the reach not just of the few but of the many is vitalboth to meeting individual aspirations and a better future for our country."Three million new homes are now expected be built by 2020 (a 9% increase on theprevious plan) and the annual build target has been raised by 20% from 200,000to 240,000 new homes in England from 2016 onwards. In light of this, Inspaceexpects sustained strong demand for new homes. By way of illustration, theGroup recently announced a £37.5 million three-year contract to design and buildkey worker accommodation at St. George's Hospital in South West London. This isthe third such scheme between Inspace and Thames Valley Housing Association andwhen completed in 2010 will provide over 600 units and a nursery. In additionto the St George's contract, two major schemes for Places for People and A2Housing have now moved from the preconstruction phase to signed constructioncontracts. Sales rates and trading margins of entry level homes for sale have remainedstrong despite the background of rising UK interest rates, suggesting thatdemand from first time buyers in London remains resilient. New Government plansto accelerate the planning process and to free up land owned by variousMinistries are welcome, with planning constraints in particular often cited asthe major impediment to development programmes. Planning permission hasrecently been secured for the London Wide Initiative site at West MiddlesexHospital, where Inspace is working together with English Partnerships andNotting Hill Housing Group, which should see 280 new homes built over the nextthree years. Consistent with Government policy, the development will create anintegrated community with homes for rent, open market homes for sale andsubsidised homes for sale to eligible key workers. Corporate Assets As indicated last year, margins in the Corporate Assets division will remainunder pressure during the final stage of a change programme that will seeoperating structures realigned and new technology introduced across allmaintenance activity. With the programme now in its final phase and itscompletion due by the end of 2007, the early signs of potential efficiencyimprovements are encouraging. Demand for the interiors service remainsparticularly strong and the new furniture service has been well received. Outlook The 2007 social housing workload position is substantially secure and over 80%of 2008 consensus social housing revenues are now visible as secured orders andpreconstruction commissions. New orders received from organisations such as Barclays Bank, Cemex, HaringeyBorough Council, Leicester City Council and Whitbread Restaurants has putCorporate Assets on track to meet its year-end target of having at least 75% ofits 2008 workload order book secured when 2007 accounts are closed. Overall, the Board remains confident that Inspace is trading in-line with fullyear consensus. - Ends - For further information:Inspace plcAndrew Telfer, Chief Financial Officer Tel: +44 (0) 1462 678 [email protected] www.inspace.co.uk Dresdner KleinwortChristian Littlewood Tel: +44 (0) 20 7623 8000 Media enquiries:AbchurchHenry Harrison-Topham Tel: +44 (0) 20 7398 [email protected] www.abchurch-group.com Notes to editors Inspace plc is a property based services group, and one of the UK's leadingspecialist service providers to the social and affordable housing market.Inspace has three complementary areas of activity: social housing, affordablehousing and corporate assets. Social Housing - creating and maintaining sustainable homes The division is one of the UK's leading specialist service providers to socialhousing landlords through long term framework contracts. Its services comprisemajor 'repair and maintenance', 'stock reinvestment' and new build programmesfor local authorities, Arms Length Management Organisations (ALMO) andRegistered Social Landlords (RSLs). Total spending on social housing is currently around £14 billion per annum, ofwhich around £10.3 billion is spent on repair, maintenance and improvement. Ofthis, £4 billion is spent on ongoing repair and maintenance, with the remaining£6 billion being spent on capital projects such as major refurbishment andimprovement. This includes a contribution of between £1 billion and £2 billion ayear from the Decent Homes initiative. The provision of new housing, which iscurrently running at around 35,000 units a year, adds a further £3.5 billion tothis sum. Affordable Housing - developing integrated communities The affordable housing division specialises in the provision of low cost homesfor sale in partnership with RSLs, usually alongside social housing built by theSocial Housing division, as part of more extensive mixed tenure schemes. It hasalready established a number of joint venture companies with RSLs and throughits involvement in the Key London Alliance consortium, has been appointed toprovide mixed tenure developments under the Government's London Wide Initiative. Corporate Assets - improving and maintaining public and private real estate The corporate assets division provides a comprehensive repair, maintenance,capital works and interior design service across public and private sectornon-residential real estate. It delivers 24/7 integrated maintenance servicesacross England, Scotland and Wales through its national network of branches and'home based' mobile engineers. Its specialist design-led service offerscustomers an integrated interior design, installation and furnishing 'one stop'solution. Further information on Inspace can be found at www.inspace.co.uk This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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