Great Places Housing Group - Investor Presentation March 2018
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Great Places
Housing Group
Investor Presentation
March 2018
Tony Davison - Chair
Matthew Harrison - Chief Executive
Phil Elvy - Executive Director of Finance
Kal Kay - Director of Finance
Disclaimer
The information contained in this investor presentation (the a result of relying on any statement in or omission from this This information presented herein is an advertisement
“Presentation”) has been prepared to assist interested parties Presentation or any other information and any such liability and does not comprise a prospectus for the purposes of
in making their own evaluation of Great Places Housing Group is expressly disclaimed. This Presentation includes certain EU Directive 2003/71/EC (as amended) (the “Prospectus
Limited (“Great Places”). This Presentation in relation to a statements, estimates and projections prepared and provided Directive”) and/or Part VI of the Financial Services and
proposed offering of bonds of Great Places (the “Bonds”) by the management of Great Places with respect to its Markets Act 2000. This Presentation does not constitute or
is believed to be in all material respects accurate, although anticipated future performance. Such statements, estimates form part of, and should not be construed as, an offer to
it has not been independently verified by Great Places and and projections reflect various assumptions by Great Places’ sell, or the solicitation or invitation of any offer to buy or
does not purport to be all-inclusive. This presentation and management concerning anticipated results and have been subscribe for, Bonds in any jurisdiction or an inducement to
its contents are strictly confidential, are intended for use by included solely for illustrative purposes. No representations enter into investment activity. No part of this Presentation,
the recipient for information purposes only and may not be are made as to the accuracy of such statements, estimates nor the fact of its distribution, should form the basis of, or
reproduced in any form or further distributed to any other or projections or with respect to any other materials herein. be relied on in connection with, any contract or commitment
person or published, in whole or part, for any purpose. Failure Actual results may vary from the projected results contained or investment decision whatsoever. Any purchase of the
to comply with this restriction may constitute a violation of herein. Bonds should be made solely on the basis of the final offering
applicable securities laws. By reading this Presentation, you circular to be prepared, which will contain the definitive terms
agree to be bound by the following limitations. Neither Great The Bonds have not been and will not be registered under the of the transactions described herein and be made public
Places nor any of its representative directors, officers, board U.S. Securities Act 1933, as amended (the “Securities Act”), or in accordance with the Prospectus Directive and investors
members, managers, agents, employees or advisers makes any the laws of any state or other jurisdiction of the United States, may obtain a copy of such final document from the National
representations or warranty (express or implied) or accepts and may not be offered or sold within the United States, or Storage Mechanism.
any responsibility as to or in relation to the accuracy or for the account or benefit of, U.S. Persons (as such terms are
completeness of the information in this Presentation (and no defined in the Regulation S under the Securities Act), absent The distribution of this Presentation and other information
one is authorised to do so on behalf of any of them) and (save registration or an exemption form, or in a transaction not in connection with the Bonds in certain jurisdictions may
in the case of fraud) any liability in respect of such information subject to, the registration requirements of the Securities be restricted by law and persons into whose possession
or any inaccuracy therein or omission therefrom is hereby Act and applicable state laws. This Presentation is made this Presentation or any document or other information
expressly disclaimed, in particular, if for reasons of commercial to and is directed only at persons who are (a) “Investment referred to herein comes should inform themselves about
confidentiality information on certain matters that might be of professionals” as defined under Article 19 of the Financial and observe any such restrictions. Any failure to comply with
relevance to a prospective purchaser has not been included in Services and Markets Act 2000 (Financial Promotion) Order these restrictions may constitute a violation of the securities
this Presentation. 2005, as amended (the “Order”) or (b) high net worth entities laws of any such jurisdiction. This Presentation and any
falling within Article 49(2)(a) to (d) of the Order (all such materials distributed in connection with this Presentation
No representation or warranty is given as to the achievement persons together being referred to as “relevant persons”). are not directed to, or intended for distribution to or use by,
or reasonableness of any projections, estimates, prospects Any person who is not a relevant person should not act or rely any person or entity that is a citizen or resident or located in
or returns contained in this Presentation or any other on this Presentation or any of its contents. Any investment any locality, state, country or other jurisdiction where such
information. None of Great Places, Banco Santander S.A. or investment activity to which this Presentation relates is distribution, publication, availability or use would be contrary
(“Santander”), any of their respective directors, board available only to and will only be engaged in with such relevant to law or regulation or which would require any registration or
members, employees, affiliates, advisors and representatives persons. licensing within such jurisdiction. Great Places does not accept
or any other person connected to any of them shall be liable any liability to any person in relation to the distribution or
(whether in negligence or otherwise) for any direct, indirect possession of this presentation in or from any jurisdiction.
or consequential loss or damage suffered by any person as
Investor Presentation March 2018 | 02
1 | Highlights
• We own or manage over 19,000 homes across the North West and Yorkshire
• Good mix of properties by type and geography
• High demand across the entire property portfolio
• Impact of welfare reform has been well managed and mitigated
• Clear and uncomplicated organisational structure
• Strengthened governance structure, and experienced board
• Experienced executive team
• Strong development track record and good portfolio mix
• Increasingly financially robust
• Modest exposure to property sales
• Record turnover achieved in 2017
• Our most recent stability test has confirmed G1/V1 status
• Benchmarked strongly against our peers
Our refreshed three year Corporate Plan will be in place for April 2018 and will set out our short and medium term plans
and long term ambitions.
Investor Presentation March 2018 | 03
2 | Who we are
Investor Presentation March 2018 | 04
2.1 | Vision and Values
Our
About Great Places Housing Group values
Great • We are fair, open
We have over 19,000 properties across the North
homes
Maximis
ing o and accountable
West and Yorkshire. Our portfolio includes social investme ur
rented homes, affordable rented homes, market sustainab nt in • We know, respect and
le homes
rent, shared ownership, homes for key workers, care about our customers
and accommodation and services.
• We appreciate the effort of
The key entities in the group are: everyone who works here
• Great Places Housing Group – provider of Gr • We promote partnerships,
central and corporate services such as finance, commuenat efficiency and value for money
HR and Business Systems to all group members. Bu ities
ilding su
vibrant c ccessful, • We passionately embrace
ommuniti
es
• Great Places Housing Association – general creativity, change and
needs rented homes, resident services, and innovation
supported housing, now operating under our
new ‘Independence and Wellbeing’ model to
reflect a greater emphasis on empowering
customers to live independently.
Great
people Regulator for
rated
• Plumlife – property sales, managing our Shared Providing
outs social housing
Ownership and market rent portfolio, and custome tanding us G1/V1 in
r serv
leasehold services. and supp ice November 2017
ort
Participated
in the
• Cube Great Places – developing new market pilot IDA in 2
015
homes for sale and rent.
Investor Presentation March 2018 | 05
2.2 | A brief history
1970s 1970 | Manchester Methodist Housing Association (MMHA) is formed 1975 | S alford Community Housing Association founded
1980s 1980 | BME specialist Ashiana
Housing Association set up
1986 | Selhal Housing Association established, incorporating Community Housing Association
and stock from the YWCA
1990s 1995 | MMHA takes over First Peterloo
2000s 2000 | Salford CHA becomes Space New Living
2001 | Longridge and Shaw Heath,
Knutsford, acquired by MMHA 2005 | MMHA merges with Selhal, creating
Manchester Methodist Housing Group (MMHG)
2005 | Affordable home ownership
brand Plumlife established 2007 | S pace New Living
2006 | Great Places Housing Group is formed with merger of MMHG and Ashiana joins Great Places
2007 | Wybourn and Housing Group
Richmond Park, 2008 | Windmill Housing Association 2009 | Great Places is simplified so
acquired in becomes part of MMHA that just one name is used
Sheffield
2010s 2011 | Large-scale Oldham PFI
housing management contract won
2012 | Debut bond issue of £200m 2013 | Repairs service
brought in house
2013 | Tony Davison becomes
group chairman
2015 | Launched our own materials 2015 | Developed 750 2017 | Great Places achieves a record turnover of £109.4m
2013 | Matt Harrison properties - more
distribution centre to further
becomes chief homes than
enhance the repairs service. 2017 | Great Places head office
executive ever before
moves to Christie Fields
Investor Presentation March 2018 | 06
2.3 | Profit for purpose
Great Places Operating costs
per property
makes reduced
by 6%
£100K more Record
profit for
rs
cash collected low arrea
2.6 %
despite 1%
a rent cut
In 2 0 1
purpose!
n g:
lu di
6 -1
in c
we
ys
7
g en a 73 poorly
erated e in w
fficiencies performing homes
disposed of,
generating
£5.1m
Bringing sub-
contractor work
in-house to Procurement
save £350k savings of 32 market
year-on-year £330k sales worth
£6m
Our Distribution These all Great Places is a profit-for-purpose organisation.
contribute to We aim to be as efficient as possible and remain a
Centre has saved
£2.2m of Building top-quartile performer. However, we then choose to use
£147k in material
Greatness a large chunk of our surplus to go far beyond our landlord
costs, also improving
savings obligations and realise our vision of Great homes,
first-time-fix rates
(2016/17)* Great communities, Great people.
* in 2017/18 we predict £4.9m
Investor Presentation March 2018 | 07
2.4 | Group structure
Great Places
Housing Group Audit and
Remuneration Limited
and Appraisal Assurance
Non-asset-owning
committee non-charitable RP committee
Community Benefit
Society
Co-terminous
Plumlife Homes board
Great Places
Housing Association Limited
100% subsidiary
100% subsidiary
Asset-owning
Asset-owning, charitable
non-charitable RP
RP, Community
Community Benefit
Benefit Society
Society
Terra Nova
Cube Great Developments
Places Limited Limited The Group structure comprises five
Company limited by Company limited by
shares. Development of companies led by the group board
shares. Design & build
properties for outright supported by two committees and
contracts - development
sale and market rent of residential property managed by our Chief Executive
(VAT Shelter) (Matthew Harrison) and a team of
Executive Directors.
Investor Presentation March 2018 | 08
2.5 | GPHG and Cube board members
Tony Davison Jerry Green Brendan Nevin
Chair Chair of Audit & Assurance member of the Audit &
Appointed: 19 September 2013 Committee Assurance Committee
Tony is a highly experienced Appointed: 5 December 2013 Appointed: 11 September 2014
businessman. Former Managing Jerry uses his 20 years’ experience Brendan has spent more than 30
Director at company Bostik, he served running a commercial property years working in the housing and
as a local councillor, Chair of investment company to act as an regeneration sector. He played a lead
Governors of a College of Further advisor to a number of funders role in developing the Housing Market
Education, a Governor of investing in the sector. A member of Renewal (HMR) urban renewal
Manchester Metropolitan University the leadership board at Manchester programme and his research and
and is currently Chairman of Nantwich Business School and a Trustee of policy work is regularly published.
Town Football Club. Tony is also a Macclesfield Academy, he has held
member of the Remuneration & high-profile roles at Yates Group and
Appraisal Committee at Great Places. Gradus Group Ltd.
Jenny Rayner David Robinson Celia Cashman
Deputy Chair, Chair of Remuneration member of the Remuneration member of the Audit &
& Appraisal Committee & Appraisal Committee (also a Assurance Committee
Appointed: 19 September 2013 Board member of Cube) Appointed: 11 September 2014
Jenny has for 17 years been an Appointed: 19 September 2013 Celia is a retired housing professional
independent consultant and trainer David is a member of the who has spent almost 40 years
on corporate governance, internal Remuneration & Appraisal Committee. working in a wide variety of housing
audit and risk management. He is the Chairman and former MD and regeneration environments
She formerly enjoyed a 21-year career of specialist retailer Richer Sounds, across the country. Her career history
with ICI and Zeneca in a variety of Managing Director of a privately includes housing services director
commercial management roles and -owned property development and posts in a number of large housing
as a chief internal auditor. Jenny has investment company and a Trustee of associations, most recently at
been a board member in the social United Learning, one of the country’s Yorkshire Housing, together with
housing sector for over 10 years. largest Multi Academy Trusts. several years as a housing consultant.
Investor Presentation March 2018 | 09
2.5 | GPHG and Cube board members
Jan Fitzgerald Matthew Harrison Samantha Young
member of the Remuneration & CEO and Executive Board Member member of the Audit &
Appraisal Committee Appointed: 11 April 2013 Assurance Committee
Appointed: 11 September 2014 Matthew joined Great Places in 1993 Appointed: 12 October 2017
Jan draws on 30 years of experience and led the organisation through Sam has over 20 years experience
working in housing and regeneration. award winning development before of working in the public and private
She held several senior management being appointed Chief Executive in sectors at senior management /
positions at Sheffield City Council, April 2013. He has vast experience in director level. She is an IT professional
including director of community development and urban regeneration who has led major IT projects. Sam is
services. Her high-profile work has and has led on many iconic developments an experienced non executive director
seen her play a leading role in the that have supported the growth of the and currently sits on the Board of
regeneration of the city’s Park Hill business. He has also been involved a company in the educational and
and Norfolk Park. with a Local Strategic Partnership, has technology sector. Sam is a member
been a PFI Company Board Member of the Audit and Assurance
and has supported the NHF in a variety Committee.
of ways. He is currently a Board
member of the Sheffield Housing
Company and is a Non-Exec Board
Member of another housing provider.
Will Taylor Babar Ahmad
Chair of Cube Great Places Limited Cube Great Places Limited
Appointed: 19 September 2013 Appointed: 12 October 2017
Will is the Chair of Cube. He is an Babar is a Chartered Surveyor with
experienced businessman and vast experience of acquiring
chartered surveyor, and was a residential and commercial land.
former managing director of the He has excellent knowledge of land
Carrington Business Park in Trafford, markets and the town planning
part of the multinational Shell Group. system and has delivered large
regeneration projects including the
only Legacy facility built outside
of London for the 2012 Olympic
Games.
Investor Presentation March 2018 | 102.6 | The Executive Team
Matthew Harrison Phil Elvy Guy Cresswell Pete Bojar
CEO and Exec Board Member Executive Director of Finance Executive Director of Customer Executive Director of Growth and
Services Assets
Matthew joined Great Places in 1993 Phil has responsibility for ensuring Great Guy is responsible for the customer-facing Pete leads our Growth and Assets
and led the organisation through award Places’ Finance, Business Systems, side of our business, ensuring the directorate, being responsible for our
winning development before being Business Intelligence and Governance organisation provides a great customer affordable, market sales and market rent
appointed Chief Executive in April 2013. functions provide high-quality, back office experience. Alongside managing our development programmes, sales, asset
He has vast experience in development support to the rest of the Group. He is neighbourhoods, he is also responsible for investment, compliance and corporate
and urban regeneration and has led on also in charge of making sure regulatory our work in Independence and Wellbeing, Health & Safety. He is a graduate of
many iconic developments that have and statutory requirements are satisfied. which supports our more vulnerable Sheffield Polytechnic and has worked in
supported the growth of the business. One of Phil’s key challenges is balancing customers to develop life skills and achieve housing since 1989, starting his career in
He has also been involved with a Local the need for the long-term financial their goals, and is an active member in a housing management before moving into
Strategic Partnership, has been a PFI viability and stability of Great Places number of sector-related partnerships and development in 1992. He is highly
Company Board Member and has with risks posed by the Group’s strategic forums. Guy has extensive experience in experienced in regeneration and
supported the NHF in a variety of ways. growth and development objectives. all aspects of housing but his passion lies in partnerships and has led some of Great
He is currently a Board member of the He started his career in utilities and health and housing, investment in Places’ most successful, high-profile
Sheffield Housing Company and is a has worked in the housing sector for communities and regeneration, and the schemes.
Non-Exec Board Member of another nearly 20 years. importance of getting right the basics of
housing provider. property management.
Investor Presentation March 2018 | 113 | Our properties and our customers
Investor Presentation March 2018 | 123.1 | Property profile
Bedroom profile (as at 31st March 2017)
The colours show the number of
properties owned or managed by 1 2 3 4 5+ Total
Great Places in each local authority area 205 10,796
House 63 4,279 5,017 1,232
Lancaster Flat 3,967 2,575 35 0 0 6,577
1 - 250 Bungalow 163 423 14 5 0 605
Other 930
250 - 500 Total 4,193 7,277 5,213 1,237 205 18,908
Ribble Valley Bradford Other includes shared accommodation
Wyre
Pendle Leeds
500 - 1,000
Blackpool Preston
Fylde Burnley
1,000 - 2,000 Hyndburn
South Ribble
Rossendale
2,000+ Blackburn
Chorley
Rochdale
Bolton Bury
Oldham
Wigan Salford
Tameside
St Helens Manchester
Sheffield
Trafford Stockport Rotherham
Warrington High Peak
Chesterfield
Cheshire East
Cheshire West
52% of our homes are focused
in the urban centres of Manchester,
Salford, Sheffield and Oldham
Stoke
Investor Presentation March 2018 | 133.2 | Housing assets - owned and managed
Housing properties As at 31 As at 31 As at 31 A history of steady growth
owned / managed Mar 2015 Mar 2016 Mar 2017
20,000 £110
3.3% 18,000 £100
3.4%
5.0% 16,000 £90
3.6% 6.1% £80
14,000
Over
3.9% 5.6%
3.3% 4.5% £70
79% ing 7.0% 12,000
6.3% 6.7% £60
10,000
social hous
£50
8.3% 8,000 £40
stock 9.2% 8.6%
6,000 £30
4,000 £20
13.4% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
15.5% 17.9%
Properties (Left scale) Turnover £m (Right scale)
PFI properties
Homes managed, but
owned by third party Operating surplus £m (including sale of fixed assets)
Leasehold £35m
Shared ownership £30m
Supported housing (incl.
Sheltered, Extra Care) £25m
Affordable rent housing £20m
General needs housing 60.2% 55.5% 52.9% £15m
TOTAL 17,515 18,409 18,908 £10m
Properties under 1,029 743 341 £5m
development
£0m
Homes owned (but 56 56 56
managed by a third party) 2011 2012 2013 2014 2015 2016 2017
Investor Presentation March 2018 | 143.3 | Post Grenfell
• We own 6 tall buildings (over 6 storeys / 18m)
• We also manage 8 tall buildings on behalf of others
• None of the tall buildings that we own or manage have any ACM material
• Only one of our tall buildings, Broad Road pictured below, is used as security for the bond
• We are working closely with GM Fire and Rescue Service
• Changes made to the fire evacuation policy at one building
• Tenant vulnerabilities assessed and individual PEEPs (personal exit evacuation plan) developed
• Sprinklers installed at 3 sites with deck access fire safety risk (these were not as a result of Grenfell)
• Review of fire safety at all medium rise properties
• Provision of £1.2m for sprinkler costs for all other tall buildings added into 2018-19 budget
Bowland Broad The
House Road Vibe
Investor Presentation March 2018 | 153.4 | Demand
• Over 120,000 households (4%) in the North West are
on local authority waiting lists (source HCA figures April
2016), including 85,000 in Greater Manchester alone. Social Average Average Average
Housing Social Market Local Housing
• In 2016/17, around 8,000 new dwellings were built Units Rent Rent Allowance
in Greater Manchester. During that year, Great Places
built 300 within Greater Manchester and 625 in total. In March 2014 9,428 £83.50 £121.73 £110.83
addition in South Yorkshire 4,750 homes were built of March 2015 9,205 £87.05 £125.55 £110.64
which 100 were built by Great Places, while in Lancashire, £89.29 £125.47 £112.32
March 2016 9,095
a further 4,500 were built of which Great Places
contributed close to 200. (GP figures are just for March 2017 8,853 £88.54 £125.85 £112.01
grant-funded build). All of Cube’s market sales were in January 2018 8,647 £87.74 £127.89 £111.93
Greater Manchester.
Source: Great Places data
• 64% of Great Places properties are let on first offer.
• Our average relet time is 22 days and we have achieved
year on year improvement since reporting 33 days in
March 2014.
“Across the region nearly
44,000 too few homes were
The development built between 2011 - 2015 to
Understanding the programme has been keep pace with demand”
demographics affecting our designed to deliver the type Source: NHF Hometruths 2016/17
market allows the group to of properties needed and as Our tenancy turnover is 8.0%.
be confident that there is identified by market research Based on current general needs
strong demand for its current and our knowledge of local tenancies, the average length
property portfolio. demographics. is close to 8 years. c30% of
tenants have been with us over
10 years and over 50% for
more than 5 years.
Investor Presentation March 2018 | 163.5 | Tenant profile
Long term trend of improving arrears performance
6.0%
Pensioners claiming partial
housing benefit 4%
5.0% Pensioners not claiming
4.0% housing benefit 6%
3.0% Pensioners claiming full
housing benefit 8%
2.0%
1.0%
Working age on full
housing benefit* 19%
Working age claiming partial
20%
0.0%
Dec Dec Dec Dec Dec Dec housing benefit
2012 2013 2014 2015 2016 2017
Working age not claiming
Current Arrears % Arrears excluding HB%
housing benefit 44%
* These are the tenants most at UC risk
Knowing our customer profile helps to predict our Universal Credit exposure
Average relet times (days)
29
27 Analysis of tenant age and arrears
25 25% 6%
20% 5%
23 4%
15%
21 3%
10%
19 2%
5% 1%
17 0%
27.1 23.9 22.1 22.2 0% 16-24 25-34 35-44 45-54 55-64 65+
15
March 2015 March 2016 March 2017 2017/18 Q3 Proportion of tenants (LH scale) Average Arrears (RH scale)
National North West
Investor Presentation March 2018 | 173.6 | Welfare reform
Number of tenants impacted by under-occupancy penalty Only % of rent from
2,000
1,800 59 Housing Benefit
tenants
1,600
1,400 Housing Benefit
1,200
1,000 currently affected by
46.3%
800 Non Housing Benefit
the benefit cap with
600
400 arrears of c£20k 53.6%
200
0 (as at 31st March
Apr
2013
Dec
2013
Dec
2014
Dec
2015
Dec
2016
Dec
2017
2017)
Number of UC claims Universal Credit arrears
(as at 31 March 2017)
800
700 Universal Credit
600
500
£220k
400 Other arrears
300 £1,582k
200
100
0
Dec Dec Dec Dec
2012 2015 2016 2017
Number of UC claims
Investor Presentation March 2018 | 184 | Development
Investor Presentation March 2018 | 194.1 | Business Planning
Multi scenario
stress testing
he
to ensure fin lps
ancial
resilience
Business plan
and budget A+ rating confirmed A3 rating confirmed
2017/2018
people.
Great homes. Great communities. Great
Operating margin
Assumptions Year 2 Year 3 Year 4 Year 5 Years 35%
2018/19 2019/20 2020/21 2021/22 6-30
Consumer Price Inflation (CPI) WAS 30%
2.50% 2.25% 2.00% 2.00% 2.00%
Consumer Price Inflation (CPI) STRESS 5.00% 5.00% 1.50% 1.50% 1.50%
25%
Building inflation WAS CPI+1.5% CPI+1.5% CPI+1.5% CPI+1.5% CPI+1.5%
Building inflation STRESS CPI+5.0% CPI+5.0% CPI+5.0% CPI+5.0% CPI+1.5%
20%
Major Repairs inflation WAS CPI CPI CPI CPI CPI
Major Repairs inflation STRESS CPI+5.0% CPI+5.0% CPI+5.0% CPI+5.0% CPI 15%
Earnings inflation WAS CPI+1.0% CPI+1.0% CPI+1.5% CPI+1.5% CPI+1.5% 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18
Actual Actual Actual Actual Actual Actual Actual Actual
Earnings inflation STRESS CPI+2.5% CPI+2.5% CPI+2.5% CPI+2.5% CPI+1.5% Great Places Moodys peer group Golden rule
Sources: Moody’s, Issuers’ data
Investor Presentation March 2018 | 204.2 | Development Track Record
1000
900
800
730
705
700
626 625
600 576
520
500 481 462
442
400 360
300
200
100
0
2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17
Units developed
Investor Presentation March 2018 | 214.3 | A mixed development portfolio
Shared ownership sales 2014/15 2015/16 2016/17
Units 50 115 193
Average 1st tranche % sold 46.8% 46.3% 46.3%
Average proceeds £72k £74k £68k
Total sales value £3.6m £8.5m £13.2m
Profit per unit £13.3k £10.1k £6.2k
Voluntary disposals 2014/15 2015/16 2016/17
Units 99 75 68
Profit per unit £21.1k £24.5k £30.4k
ted
Great Stone Gardens, Manchester The Firs, Salford ent of ren Outright sale
Developm using a s schemes
s in g is a ppraised are required
to meet
hou nd
Mixed tenure with Affordable rent: 10 units Private rented scheme: 15 units a r N P V a pproach, a a target sale
40 ye hemes s margin
Shared Ownership: 26 units Shared ownership: 15 units
a re d O w nership sc hurdle rate.
Sh rst
Outright sales: 32 units ider the fi
Development cost: £1.8m also cons .
ale results
Development cost: £3.8m tranche s
(PRS element)
(outright sale element) Gross yield: 7.59%
Proceeds: £5.5m
Margin: 32%
Private rented scheme
appraisals required to
Mixed tenure development helps to diversify risk meet gross and net
yield targets.
Investor Presentation March 2018 | 225 | Financial analysis and transaction overview
Investor Presentation March 2018 | 235.1 | Financials
rnover
Record tu h
nt cut; wit
despite re t
For the year ended 31 March *2015 2016 2017 Maintained in outrigh
£m £m £m
£60m increases first
sales and
Income Statement investment tranche s
ales
Total turnover 89.5 103.9 109.4 in new homes
Operating surplus# 30.6 33.8 34.0
Increases
Surplus for the year after tax 11.3 12.4 12.7 operating in £14m
surplus &
surplus af investment
ter tax in existing
Statement of Financial Position
properties
Housing properties at cost 1,092.6 1,139.4 1,174.7
Depreciation (124.4) (134.6) (147.3)
Investment properties 12.7 13.9 15.5
Other fixed assets 6.5 6.4 10.0 Turnover £ ‘000s %
Fixed assets 987.4 1,025.1 1,052.9 Social housing lettings 84,328 77%
Investments 10.2 9.9 9.2
First tranche shared
ownership sales
13,168 12%
Net current assets 25.0 28.4 45.8 Developments for sale 6,053 6%
Total assets less current liabilities 1,022.6 1,063.4 1,107.9
Supporting people 2,307 2%
Creditors due after one year 517.7 550.2 591.7 Properties owned but
managed by other 1,348 1%
Social housing grant 475.1 473.7 467.6 organisations
Reserves 29.8 39.5 48.6 Other 2,214 2%
1,022.6 1,063.4 1,107.9
* 2015 restated after FRS102
# operating surplus includes the surpluses from the disposals of fixed assets
Investor Presentation March 2018 | 245.2 | Financial analysis and ratios
For the year ended 31 March 2013* 2014* 2015* 2016 2017
Statistics and key ratios
Surplus % (Surplus for the year as % of turnover) 9.3% 10.7% 12.9% 11.9% 11.6%
Interest cover (operating surplus, add back surplus/deficit on sale of property in normal course of business, add back 178% 186% 185% 212% 236%
depreciation, impairment and gift aid) / (net interest payable)
Interest cover (As above, but with major repair capitalisation limited to 40% of total major repair expenditure) 156% 170% 169% 202% 214%
Gearing (Total borrowings less cash at bank and in hand)/ (Housing properties at cost less properties under construction) 41.5% 40.5% 44.0% 44.0% 43.1%
Social Housing Letting interest cover (Surplus on social housing lettings / net interest paid (in cash flow statement) 1.6x 1.1x 1.3x 1.3x 1.2x
Operating Margin before interest % (Operating surplus / turnover excluding grant amortisation) 28.8 30.0 34.1 28.9 30.0
Recurrent cash interest cover (Operating surplus plus depreciation and impairment / net interest in cash flow statement) 2.3x 1.7x 1.8x 2.1x 2.0x
Debt to revenue (Loans less fees plus finance leases / turnover) 4.8x 4.8x 5.0x 5.2x 4.8x
Assets under management 16,498 16,785 17,515 18,409 18,908
Housing assets £m £971.5 £1,003.2 £1,092.6 £1,139.4 £1,174.7
Net capital expenditure % (Movement in Housing properties at costs / turnover excluding grant amortisation) 39.9% 45.9% 45.8% 41.4% 24.3%
Source: GPHG statutory accounts and Moody’s * Restated following FRS102
Investor Presentation March 2018 | 255.3 | Moody’s and Fitch ratings
Moody’s ratings Fitch ratings
AA3
A1
AA-
A2
A3
A+
Baa1
Baa2
Oct May Nov Jan Dec July Feb Sep Dec Oct Apr May Oct Nov July July
2012 2013 2013 2015 2015 2016 2017 2017 2017 2012 2013 2014 2014 2015 2016 2017
Credit rating Baseline Credit Assessment
Despite sovereign and sector downgrades, Great Places has improved its Moody’s baseline credit assessment.
Investor Presentation March 2018 | 265.4 | Sector scorecard
Great Places
Business health Development
Family Group
Operating margin (%) Operating margin SHL (%) EBITDA MRI (%) Development (No.) Development (% of stock) Gearing (%)
Sector median
31.64 227.96
30.31 41.60
1.10
40.00
28.60 28.17 35.20 31.56 141.94 185.00 625.00 223.00 3.80 1.80 52.40 42.16
Operating efficiencies
Headline Social Housing cost per unit (£) Rent collected (%) Overheads as % of adjusted turnover
3,315.00 99.71 12.30
3,066.00 3,200.00 100.70 99.71 7.50 13.30
Outcome delivery Asset management
Customer satisfaction (%) Investment: communities Investment: housing ROCE (%) Repairs ratio Occupancy rate (%)
86.60 0.68
4.00 99.50
0.69
0.01
86.10 84.90 0.06 0.02 1.06 0.77 3.10 3.80 0.42 0.72 99.57 99.25
Source: Extracted directly from the Sector scorecard pilot outcomes
Our Family Group:
(21 plus Great Places: Accent, Accord, Chevin, Cobalt, EMH, Equity, ISOS, Johnnie Johnson, Irwell Valley, Leeds Federated, Longhurst,
Mosscare, Muir, Nottingham Community, Orbit, Regenda, Riverside, South Yorkshire, Stonewater, Symphony, Yorkshire)
Investor Presentation March 2018 | 275.5 | Regulator of Social Housing (RSH) Unit costs
Entity Social Housing Cost Management Service Charge Maintenance Major Repairs Other Social
CPU (£k) CPU (£k) CPU (£k) CPU (£k) CPU (£k) Housing Costs
CPU (£k)
Great Places HA 3.07 1.02 0.35 0.56 0.85 0.28
Sector Level Data
Upper Quartile 4.33 1.15 0.60 1.11 0.96 0.51
Median 3.30 0.94 0.37 0.93 0.68 0.24
Lower Quartile 2.93 0.74 0.24 0.78 0.49 0.10
Quartile 2nd 3rd 2nd Best 3rd 3rd
North West Median 3.34 0.95 0.35 0.94 0.78 0.32
Position compared to NW Median Better Worse Same Better Worse Worse
ey
ks are a k
Major wor ces
Supported H
ousing is a
r io r it y f o r Great Pla key cost driv
er; having a h
p e
e d t o im proving th proportion w igh
lin k ithin our
a li t y o f o ur homes stock should
qu make us
comparative
ly more
expensive
Investor Presentation March 2018 | 285.6 | Treasury strategy
As at 31st March 2017 Debt repayment profile (excluding bond)
Maturity £’000 The Treasury Strategy (July 2017) specifies a
minimum of 75% fixed rate debt AND a £50m
Within one year 4,817
minimum £20m cash held.
Between one and two years 9,929 £40m
Between two and five years 30,357 Fixed and hedged borrowings
£30m
After five years 499,617 is split:
TOTAL 544,720 Bond £20m
Fixed including cancellable 470,402 43%
(86%) £10m
Embedded
Variable 74,318
(14%)
30% £0
2018 2026 2036 2047
Free standing derivative
Own name Bond issue
Post 2007 facilities
201,676
310,117
27%
Other legacy debt 32,927 Hedging maturity profile
£30m
As at 31 December 2017
£25m
£632m Total facilities
£20m
£527m Total facilities drawn
£15m
£105m Total available
(includes £55m of revolving facility)
£10m
The tap issue including the retained element is
£5m
expected to cover the funding requirement of
the group for at least 4 years. £0
2019 2026 2036 2046
Investor Presentation March 2018 | 295.7 | Valuation and security for the bond
Current and proposed bond stock
1 - 50
Lancaster
51 – 250
251 - 1,200
Ribble Valley Bradford
Wyre
Pendle
Blackpool Preston
Fylde Burnley
Hyndburn
South Ribble
Rossendale
Blackburn
Chorley
Rochdale
Bolton Bury
Oldham
Wigan Salford
Tameside
Current and proposed St Helens Manchester
bond stock Trafford
Sheffield
Rotherham
Stockport High Peak
Warrington
General Needs
3,856 Chesterfield
Shared Ownership
Cheshire East
Cheshire West
340
Supported, older
people and agency
managed
725
Stoke
Investor Presentation March 2018 | 305.8 | Valuation and security
Total No. of Market value No. of Existing Loan Nil Current Unit
number of units subject to units use social supportable value loan loan Current Current
units (MV-ST) tenancy (EUV-SH) housing (£m) units (£m) value
nominal amount security valuation
(£m) value (£m) (£000s) £200m £241.5m
Proposed bond security and valuation table
Current bond 4,140 3,084 £220.71 911 £52.06 £241.5 145 £201.6 £58.3
Currently redesignating stock with a loan
Redesignating 781 690 £46.90 88 £3.93 £44.5 3 £57.0 supportable value of almost: £45m
Total 4,921 3,774 £267.62 999 £55.99 £286.0 148 £201.6 £58.1
In the unlikely event that property
securing all the bond is not in place at
Total security and valuation table as at 31 December 2017
closing, cash will be placed in the sinking
Refinanced debt 6,585 2,697 £199.58 3,726 £180.17 £341.6 162 £242.3 £53.2 fund. It is anticipated that any cash will be
(2007 £315m facility) replaced by property within no more than
Bond 6 months.
4,140 3,084 £220.71 911 £52.06 £241.5 145 £201.6 £60.5
Sub-total 10,725 5,781 £420.29 4,637 £232.23 £583.2 307 £443.9 £56.0
(with security trustee)
Other debt 3,147 1,022 £54.18 2,080 £106.29 £132.4 45 £80.00 £42.7
Unencumbered properties 1,869 1,553 £35.30 83 £3.81 £90.1 224 £54.8
TOTAL 15,741 8,365 £510.31 6,800 £342.33 £805.4 576 £524.0 £53.9
Investor Presentation March 2018 | 315.9 | Transaction structure
Issuer: Great Places Housing Group Limited
Borrower: Great Places Housing Association
Rating: A3 Moody’s, A+ Fitch
Bondholders
Tap Amount: £75m with £70m retained
Regulatory judgement: G1 / V1
Maturity date: 22 October 2042
Security: Social housing property
Great Places Great Places
Housing Housing Group
Covenants: Asset cover ratios: 1.05x EUV-SH, Association Limited
Bond Trustee
1.15x MV-ST (Borrower) (Issuer)
Use of proceeds: General corporate purposes,
including funding the development programme
Bookrunner: Santander GCB
Security
Trustee Security
Cash flows
n
h is t a p t ransactio
T e
b r in g t h e total siz
wil l
t h e e x isting bond
of 5m
up to £34
retained)
(inc. £70m
Investor Presentation March 2018 | 325.10 | Find out more
Great Places values its ongoing relationships with all of its stakeholders.
Find out more at the dedicated investor section of our website.
Performance
Update
For the period covering
1 October 2017 to 31 December 2017
Great homes. Great communities. Great
people.
Perform
Update ance
For the
1 July 20period covering
17 to 30
Septemb
Great hom
es. Great
er 20
communiti 17
es. Great
people.
ance
Perfortm
Updaerieod coveringe 2017
p n
For the 2017 to 30 Ju
1 April at people
.
es. Gre
muniti
at com
mes. Gre
Great ho
Investor Presentation March 2018 | 336 | Conclusion
• We own or manage over 19,000 homes across the North West and Yorkshire
• Good mix of properties by type and geography
• High demand across the entire property portfolio
• Impact of welfare reform has been well managed and mitigated
• Clear and uncomplicated organisational structure
• Strengthened governance structure, and experienced board
• Experienced executive team
• Strong development track record and good portfolio mix
• Increasingly financially robust
• Modest exposure to property sales
• Record turnover achieved in 2017
• Our most recent stability test has confirmed G1/V1 status
• Benchmarked strongly against our peers
Our refreshed three year Corporate Plan will be in place for April 2018 and will set out our short and medium term plans
and long term ambitions.
Investor Presentation March 2018 | 34You can also read
