Trading Statement

Karbon Homes Group

01/07/2022

Karbon Homes Group trading update for the period ending 31 March 2022

· Karbon Homes Group (KHG) is today issuing its consolidated trading update for the period ended 31 March 2022.

· These figures are unaudited and for information purposes only. 

Highlights for the period ending 31 March 2022

· KHG own and manage 29,000 homes

· Karbon Homes Limited maintained its G1/V1 status from the Regulator for Social Housing on 29th June 2022, following an In-Depth Assessment.

· Turnover (excl. asset sales) for the period was £155.2m (2021: £142.4m)

· Operating surplus (excl. asset sales) for the period was £40.2m (2021: £37.1m)

· Overall operating margin (excl. asset sales) was 25.9% (2021: 26.1%)

· The surplus after tax for the period was £35.6m (2021: £22.1m)

· Gearing as at 31 March 2022 was 34.6% (2021: 35.9%)

· Return on capital employed for the period was 3.9% (2021: 3.5%)

Commenting on the results, Scott Martin, Executive Director of Resources, said:

'Despite the challenges of 2021/22, we believe we can look back over the last year and celebrate all that we've achieved at Karbon. We've maintained a positive performance and are proud to present our draft financial results to 31st March 2022 in this release.

Karbon has continued to invest and push forward with a number of new and exciting projects which will help us deliver on our strategic aims. During 2021, we refreshed our strategy and published our 'Stronger Foundations Strategy 2021-26', outlining our direction and priorities around Homes, Customer and Place over the next five years. Our colleagues were key in shaping our strategy, and we look forward to seeing it come to life through their passion and commitment.

We had a strong year in terms of the provision of high quality affordable new homes, and delivered 458 new homes across a variety of tenures and geographies. This was despite ongoing supply chain and labour shortages following the COVID-19 pandemic and Brexit.

Our commitment to playing our part in tackling the UK's housing crisis is unwavering. To help support our ambitious plans to develop over 4,000 homes in the next six years, we were pleased to achieve Strategic Partnership status with Homes England. Our aim to deliver 2,200 mixed tenure homes across the North East and Yorkshire will be supported by £131.5m in grant funding, and we are pleased to say that at least 50% of these schemes are already either underway or in the pipeline.

The net zero challenge also continues to sit at the forefront of our plans. We've piloted more energy efficient building techniques through our new build programme and prioritised using renewable energy heating systems that achieve EPC A ratings. We've also continued to invest heavily in our existing homes, spending £30m during the year to, both, keep us on track to achieve EPC C rating across all our homes by 2030, as well as ensuring that our customers are as safe and secure.

Our customers are at the heart of what we do every day. We're very pleased that our customer satisfaction scores continue to remain high, with a Net Promoter Score of +49.9 for the year, meaning that our customers' willingness to recommend Karbon to others is at a level considered to be 'excellent'. The Institute of Customer Service also awarded us with their 'ServiceMark' accreditation recently, making us one of only five housing associations to have achieved this, and the only one to do so in the North East.

Our money, debt and benefits advice services have continued to be successful at Karbon with over £4.5m in income gains achieved for our customers during the year. This is more important than ever as we see our customers and communities affected by the increasing cost of living.

In terms of our strategic aim around 'place', we've also begun work on a number of deeper place-based interventions in areas where we have a large concentration of homes. In Stanley (County Durham) we've worked closely with customers, stakeholders and community organisations to help us understand what we can do to develop opportunities for the economy of the town to grow and to help residents live more prosperous lives. Furthermore, in the North of Tyne region we secured £700k of funding from the UK Governments Community Renewal Fund to launch an employability programme.

Finally, following a rigorous In-Depth Assessment (IDA) from the Regulator of Social Housing, we have recently retained the highest rating for both the governance and viability standard (G1/V1), showing we're in a strong position for the future. Our strong investment grade credit rating of 'A' Stable was also retained in May 2022 as well by our rating agency Standard & Poor's (S&P). S&P praised our experienced management team, solid risk management policies and highlighted our focus towards improving the quality of our assets. They also considered Karbon to have very strong liquidity to support our future plans.

We look forward to updating the investor community further during the course of 2022-23.''