Keepmoat Homes Half Year update (H1 to 30 April 2019)
August 27, 2019 –Keepmoat Homes has continued to show robust performance during the first 6 months of its financial year ended 31 October 2019 and is on track to build over 4,000 new homes utilising both traditional and modular construction to help meet the country’s housing needs.
New Financing Arrangements
On 11 December 2018, we put in place new financing arrangements for the business to support its continued growth over the next six years. Our new debt package offers improved terms including lower costs and increased financial capacity to ensure that Keepmoat Homes can continue to move forward with its strategy of controlled and profitable growth. This is an extremely positive step and reflects the confidence of our lenders in the business. The funding deal increases our total available debt facilities to £205m (previously £175m) providing greater support for us to deliver our growth plans.
Business Performance and highlights
Keepmoat Homes has continued to strengthen its position as the UK’s largest and only dedicated partnership home builder and a leading home builder for first time buyers, providing high quality, private affordable homes. We have a presence in all the top 10 markets outside London, and we are a top 10 UK home builder, ranked 7th in terms of the number of homes we build across the country each year.
Keepmoat Homes has continued to show robust performance during the first 6 months of FY19, selling 2,108 homes during the period. Revenues for the same period grew by £19.5m (+6.3%) to £330.5m (6 months to April 2018: £311.0m). Revenue growth has been achieved mainly through an increase in the average selling price of +7%. Expectations for the 12 months to 31 October remain positive and are supported by strong leading indicators, with Keepmoat Homes now 90% sold for FY 2019 and forward selling for FY 2020 commenced.
We continue to maintain a healthy pipeline. At 30 April 2019, our pipeline (including sites on which we have been appointed preferred developer) stood at over 26,000 plots, representing over six years of supply at LTM house sale rates.
We have successfully secured a number of projects to support our long term pipeline, notably including a significant new partnership with Homes England, under which we will contribute to the delivery of almost 600 homes in Northfleet, Kent.
We will also start on site with transformational regeneration projects at Sighthill Glasgow, the largest project of its type outside London, and Leicester Waterside.
We have continued to invest substantially in modular homes in partnership with ilke Homes and worked with their team to create a product tailored to the needs of first time buyers and also to the requirements of our public sector and housing association partners.
Government policy remains supportive
The Government continues to show strong commitment to the housebuilding sector with a view to meeting its target of building 300,000 new homes a year by the mid-2020s, thereby increasing housing supply to its highest levels since the 1970s. We are pleased to see broad cross-party support for this commitment.
The Government further demonstrated its commitment to helping first time buyers by eliminating stamp duty on the first £300,000 of their purchases of homes up to the value of £500,000 including shared ownership properties. We welcome the extension of Help to Buy to 2023 and the reforms to restrict support to only first-time buyers from 2021 to 2023 and with new regional caps.
With a confirmed date now in place for the end of Help to Buy, we are investing in new schemes and partnerships to ensure that we can continue to support our core first-time-buyer market. Through additional funding accessed via Homes England’s Shared Ownership and Affordable Homes Programme we are working in partnership with Heylo to deliver its Home Reach part rent, part buy, shared ownership scheme on our developments across the country
The alignment of Keepmoat Homes with the ambitions of Government and our public sector partners means we are optimistic about our future at the heart of the UK housing market.
At Keepmoat, we remain committed to the delivery of these much needed new homes, and consider the Government’s support in the sector to be highly encouraging. We continue to work alongside our local authority and housing association partners, to identify and develop land suitable for housing. Our model is highly suited to a continuing policy preference for brownfield development, and makes us an attractive partner for local authorities, housing associations and other owners of land, as demonstrated by our continuing growth and commitment to providing high quality homes that are genuinely affordable to first-time buyers.
Any questions regarding this report should be directed to Keepmoat at:
Keepmoat Midco Limited
South Yorkshire, DN4 5PL
Attention: David Wilson
Tel: 01302 344 663
Email: [email protected]
Keepmoat cautions you that statements included in this announcement that are not a description of historical facts are forward-looking statements that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause Keepmoat’s results to differ materially from historical results or those expressed or implied by such forward-looking statements. Certain of these factors are discussed in more detail in the Offer document and under “Principal risks and uncertainties” and elsewhere in Keepmoat’s annual report for the year ended October 31, 2018. There can be no assurance that the transactions contemplated in this announcement will be completed. Keepmoat assumes no obligation to update any forward-looking statement included in this announcement to reflect events or circumstances arising after the date on which it was made