YORKSHIRE HOUSING Nick Atkin Chief Executive Guy Millichamp Director of Finance - INVESTOR PRESENTATION AUGUST 2019
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YORKSHIRE HOUSING INVESTOR PRESENTATION AUGUST 2019 Nick Atkin Chief Executive Guy Millichamp Director of Finance
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2
PRESENTING TEAM
Nick Atkin - Chief Executive
Nick has a track record of leading organisations through transformational
change, driving performance improvement, with a focus on maximising
the untapped potential from businesses and people.
Nick has previously introduced a fully flexible/ remote working approach.
He also led the move to 90% of customer led transactions to be
delivered through online self-service routes. He is regularly included in
the top 25 most influential people in housing and is a keen advocate of
innovation. He uses digital as an enabler to drive fundamental change in
how businesses operate. He is also a disruptor in the ‘future of work’
debate and has been paperless for 17 years.
Guy Millichamp – Finance Director
Guy joined the group in 2001 and has held a number of finance roles
before becoming director of finance in February 2015. As well as being
Yorkshire Housing’s chief financial officer, Guy also leads on business
planning, governance, risk and assurance.
A chartered accountant with a background in the not for profit sector
including charities, education and housing, Guy is currently a board
member at Rochdale Boroughwide Housing. He lives in Leeds with his
wife and three children.
3
CREDIT HIGHLIGHTS
A successful, well-run regionally focussed housing association
With broad-reaching portfolio across 20 local authorities throughout Yorkshire
Providing over 16,500 homes across a range of tenures
Supporting over a thousand elderly or vulnerable tenants
Well funded, simple business model with £130m liquidity (£50m cash, £80m secured facilities)
Experienced board and management with appropriate skills to oversee current strategy
Focus on financial health as development programme accelerates
Moody’s A3 credit rating and G1/V1 ratings from the RSH
Trusted partner of MHCLG and HE – one of only 23 strategic partners nationally
On track to deliver current programme of 3000+ homes by 2021, and another 3,000 by 2026
4
WHO WE ARE
STRONG REGIONAL PRESENCE
• Yorkshire’s largest developing Housing
association.
• Founded in 1968, now headquartered in Leeds,
through merger with other Yorkshire HAs, and
more recent growth through development of
new homes
• Founder member of Homes for the North
• Multi tenure portfolio with 85% on social or
affordable rents
• 2/3rds less than 50 years old
• 2/3rds houses and bungalows
• No high rise tower blocks
• Mix of family accommodation & supported
housing (older persons & independent
living)
• Strong focus on sustainable communities
6
DELIVERING MORE
• Serving a widely spread urban and rural community
across Yorkshire including
* older people
* tenants with support needs
• Long term strategy to deliver more homes
• While maintaining associated social added value
• And cutting costs to improve resilience
Current Strategic Objectives (under review):
• Growth
• Independence
• Profit
• Transformation
7
FUTURE DIRECTION (WORK IN PROGRESS)
8
SOUND AND STABLE FINANCIAL BASE
• Growing the business and delivering high
social impact has required YH to maintain Key data 2015 2018 20191
a sound financial base
Units 16.1k 16.7k 17.0k
• Prudent management have enabled us to Regulatory
secure substantial government grant G2/V1 G1 / V1 G1 / V1
Judgment
Trusted partner of MHCLG and Homes Turnover (£m) 92 101 113
England, as well as other HAs – one of only
23 strategic partners with HE Social Housing
80 87 85
Lettings T/O £m
Regional agent for Help to Buy
Limit of 15% market sale and 25% shared Overall Operating
27% 32% 31%
ownership Margin
SH Core Margin 27% 32% 29%
Funding Programme Grant
Gearing 40% 47% 45%
AHP (2015-18) £17m
EBITDA MRI
1.74 1.56 1.78
SOAHP (2016-21) £25m Interest cover
1) As published in, or based on, unaudited trading update 29th July 2019
LTSP wave 2 (2021-25) £62m
9
DELIVERING SOCIAL IMPACT
Supporting sustainable communities is at the core of YHG’s strategy. This involves
• Meeting demographic needs - more homes for the elderly and those with special needs
• Two extra care schemes (more planned)
• Providing support for tenants to improve their lives
• Support people into a position of financial independence
• Help customers into employment and training
• Offer more support to those who need it
• Focus on our neighbourhoods.
We embed our social purpose in our KPIs
Measure by 2020 2019 performance Status
People into employment, better jobs, training, 1,000 1,020 (Jun 19) Exceeding target
volunteering
Vulnerable people helped to live independently 15,000 17,231 Exceeding target
pa
10MEETING THE CHALLENGE
STRATEGIC OBJECTIVES
1. Growth
2. Independence – more important
than ever to support our customers
4. Transformation
3. Profit – financial performance
strong and on track
12BUSINESS OPERATIONS
Litton Road, Keighley
13STRONG REGIONAL PRESENCE
14BALANCED PROPERTY PORTFOLIO
Bedrooms Build
3% 2%1% 7%
Bedspaces 4% Pre 1919
Bedsits 8% 1919-1944
27% 28% 16% 1945-1964
1bed 14%
1965-1974
2bed 1975-1984
3bed 5% 1985-1994
13% 1995-2004
4bed
2005-2014
5bed+ 15% 2015+
39% 18%
Type Purpose
9%1%
11% 3%
2% General needs
2% Housing for older people
Flat 3% Supported housing
55%
House Market rent
Bungalow Shared ownership
34% Intermediate Rent
Other
80%
15HIGH QUALITY ASSETS
New Build Appraisal
3,120 new homes by 2021 Value of each property
assessed
High quality and easy to heat
c.100 uneconomic homes pa
sold
Strategic
Asset
Management
H&S
£3m pa spent on building safety
Investment
99.6% Decent Homes
No high rise tower blocks
£15m pa major repairs spend
Positive independent H&S review
sustained
16GOOD DEMAND AND LOW ARREARS
No. of current empty homes as a % of total stock
Available to let voids 0.75%, with remaining
flats awaiting sale
1.5% 1.5% 1.5% 1.5%
1.6% 1.4% 1.4% 1.4%
1.3% 1.3%
1.4% 1.2% 1.2% 1.2%
1.2% 1.0%
1.0% Strong track record in rent collection and
0.8% arrears control – sector leading
0.6%
0.4%
0.2%
0.0% Investment in rent collection has minimised
the impact of universal credit throughout
whole region
Actual Sector Average
Current tenant arrears as % of rent roll We actively pursue former tenant debt
4.5%
through the courts, when necessary, and
4.0% we collect around one third of outstanding
3.5% arrears from former tenants
3.0%
2.5% 2.0% 2.0% 2.0% 2.1% 2.1%
1.8% 1.8% 1.7% 1.7%
2.0% 1.5% 1.5% 1.4% 1.6%
1.5% 2,527 customers on universal credit, but up
1.0% to 7,500 anticipated when fully rolled out,
and more complex cases
Actual Sector Average
17STABLE CUSTOMER BASE
Age banding Length of tenancy
4%
13%
25%
Retired 30%
27%
0-1 year
41-retirement age
1-5 years
26-40 32% 5-10 years
10 years+
0-25
44% 25%
Tenure type Payment method
3% 2%
2% 6% 2%
7% 11%
10% social / affordable rent
Cash/Cheque
sub-market rent Debit/credit cards
Direct debit
market rent
Housing benefit
home ownership
37% 37% Rent cards
supported housing Standing orders
83%
18DEVELOPMENT
Aynham Close, Grassington
19BUILDING ASSETS FOR THE FUTURE
10 yr programme progress Aspirational new homes completions
1,400
18%
1,200
41% 1,000
19% 800
600
22% 400
Completed In contract 200
Named sites Unidentified -
2019 2020 2021 2022 2023 2024 2025 2026
Social / affordable rent Rent to Buy Shared Ownership Market sale Market rent
We plan to develop 6,120 new homes, predominantly for social / affordable rent by 2026,
with over 1,000 already completed.
Mostly family homes, all in areas where there is strong demand
Completions at 450 pa, slowed and are now accelerating again.
20DEVELOPMENT CASHFLOW (£M)
2019 2020 2021 2022 2023 2024 2025
Total spend 79 127 169 165 103 68 59
Less grant (6) (14) (35) (31) (3) (1) 0
Less sales proceeds (15) (36) (74) (41) (38) (32) (45)
Net expenditure 58 76 60 93 63 35 15
All schemes are appraised on both financial and lettable criteria, with minimum financial
criteria required, including rent surplus to cover interest costs from year 1
21NEW HOMES STRATEGY BY LOCATION
22YORKSHIRE HOUSE PRICES REMAIN BUOYANT
Annual average house price change
25.0
20.0
15.0
10.0
5.0
0.0
-5.0
England & Wales
-10.0
Yorks & Humber
-15.0
South East
-20.0
Source – LSL property services plc analysis of Land Registry transactions
23HELP TO BUY COMPLETIONS
2016 2017 2018 2019
1400
1200
1000
800
600
400
200
0
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
Source: monthly completions in NE and Y&H regions managed by Yorkshire Housing
24CORPORATE GOVERNANCE
Lairds Way, Penistone
25SIMPLE CORPORATE STRUCTURE
Yorkshire Housing Ltd.
Registered Society
Charitable status
Registered Provider
Y H Residential Ltd. Yorkshire Community
Yorkshire Housing Finance plc.
(known as Space Property) Property Services Ltd.
100% owned 100% owned 100% owned
Company limited by shares Company limited by shares Company limited by shares
Non-Charitable
Non-Charitable Non-Charitable
Currently dormant
26EFFECTIVE GOVERNANCE AND CONTROL
The Yorkshire Housing Board’s Role
Sets the values, aims and strategic objectives
Approves the corporate strategy, including the financial
business plan and budgets
Will Lifford
Chair of Yorkshire Sets the appetite for risk and decides on strategies and
plans for the future
Housing Board
Monitors the performance of all parts of Yorkshire
Housing through agreed key performance information and
Philip Linda Sue appraisal
Keith
Severs Christon
Holloway Hall
Risk and Customer Ensures compliance with all regulatory, legal, and
Assurance Development Governance financial requirements
Services
Committee Committee Committee
Committee
Exercises control of subsidiaries through an Intra-Group
agreement, setting of strategy and appointment of
subsidiary Board members
Committee Chairs
27Overview Corporate Governance Business Operations Development Financial Performance Policy Changes Treasury & Funding
EXPERIENCED EXECUTIVE TEAM
Nick Atkin
Chief Executive
Over 28 years sector experience
David Bolton Michelle Gregg Cath Owston Guy Millichamp
Andy Gamble
Director of Property Director of Business Interim Director of Director of Finance
Director of Development
Services Transformation Customer Services Chartered accountant
Over 33 years sector
Over 30 years Over 30 years sector Over 32 years sector Over 21 years sector
experience experience experience
sector experience experience
28EFFECTIVE RISK MANAGEMENT
Impact Likelihood Total
Risk
(1 – 5) (1 – 5) (1 – 25)
Statutory compliance breach 4 3 12
Significant reduction in the customer’s ability or willingness
4 3 12
to pay rents
Shock in the housing market 4 3 12
Significant changes to the economy that adversely impacts
4 3 12
the financial viability of Yorkshire Housing
Failure to retain or recruit the right people and skills 3 4 12
Serious health and safety incident 3 4 12
Cyber attack 3 4 12
Failure to deliver the key benefits from the Today’s
3 4 12
Yorkshire programme
Failure to deliver the growth plan 3 3 9
Financial loss from the failure of a significant counterparty 2 4 8
Large scale political change 2 4 8
29FINANCIAL PERFORMANCE
York College
30SUSTAINABLE GROWTH
2015 2016 2017 2018
Published Published Published Published
Income and expenditure account (£m)
Total turnover 92 96 101 101
Operating surplus 25 28 41 33
Net surplus for the year 13 14 19 16
Statement of financial position (£m)
Fixed assets 778 805 827 849
Net current (liabilities)/assets 17 -8 -4 91
Total assets less current liabilities 795 797 823 940
Long term loans 337 341 352 451
Social housing grant 289 284 282 282
Other creditors 5 3 1 1
Revaluation reserve 29 29 29 29
Revenue reserve 134 140 159 177
Group funds 795 797 823 940
31FINANCIAL RATIOS
Operating margin
SHL income % total turnover
40%
100%
35%
30% 80%
25%
60%
20%
15% 40%
10%
20%
5%
0% 0%
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
SHL interest cover Gearing
2.50 50%
2.00 45%
1.50
40%
1.00
35%
0.50
30%
- 2015 2016 2017 2018 2019
2015 2016 2017 2018 2019
32TREASURY AND FUNDING
Aldham View, Barnsley
33CURRENT DEBT PROFILE
Debt Profile (£m) Available Facilities
700 9%
600
500 14%
Drawn
400
300 Undrawn
200
100
Liquid
- Resources
2019 2020 2021 2022 2023 2024 2025 2026
77%
Bond Fixed rate Variable rate
Fixed Rate Maturity Profile Hedging all embedded
160 7%
140
120
£ Millions
100
80
60
40 Fixed Var
20
0
Jan-19
Jan-31
Jan-20
Jan-21
Jan-22
Jan-23
Jan-24
Jan-25
Jan-26
Jan-27
Jan-28
Jan-29
Jan-30
Jan-32
Jan-33
Jan-34
Jan-35
Jan-36
Jan-37
Jan-38
Jan-39
Jan-40
Jan-41
Jan-42
Jan-43
Jan-44
93%
34PROPERTY SECURITY AS AT JULY 2019
Unit Numbers and Values
Type Units MV-STT Ratio MV-STT (net) Units EUV-SH Ratio EUV-SH (net) Total
Houses 1,244 £83m 115% £72m 618 £35m 105% £33m £105m
Flats 858 £45m 115% £40m 341 £15m 105% £14m £54m
Total 2,102 £128m £112m 959 £50m £47m £159m
Asset Cover
Funding Facility Valuation Surplus Security
Requirement
Bank loans £392m £549m £470m £78m
Public bond £140m £177m £159m £18m
Unencumbered properties (est) - £176m £176m
Total £532m £883m £272m
35INVESTOR RELATIONS
We value open relationships
with all our stakeholders
News and annual reports &
updates posted on our website
AGM open to stakeholders
Commit to speaking with
investors at least annually
Standing invite to corporate
events
36BOARD BIOGRAPHIES
Current board members are as follows
Will Lifford (Chair)
• Will is a chartered accountant and a former UK head of audit with accountants Grant Thornton.
• He has held a number of non-executive roles in the public, charity and not-for-profit sectors. He is currently a Board member
of the Independent Parliamentary Standards Authority.
• Will is a member of the Governance Committee.
Sue Hall (Vice Chair)
• Sue has more than 30 years’ leadership experience in IT transformation, risk management and consultancy.
• She was formally director of information systems and strategy with leading global law firm, Linklaters LLP and is a
non-executive director and Board Chair of the Valuation Office Agency.
• Sue is chair of the Governance Committee.
Linda Christon
• Linda has 30 years experience working in housing, health and social care.
• Formerly a Regional Director of the Commission for Social Care Inspection.
• Linda is Chair of the Customer Services Committee.
Richard Flanagan
• Richard is a Chartered Surveyor with over 25 years experience in commercial development, valuations and development
consultancy
• He currently runs his own property consultancy and is a non-executive director of York Science Park
• Richard is a member of the Development Committee
Alison Hadden
• Alison began her housing career 30 years ago and has spent the past eight years as a chief executive.
• She is currently the chair of Stafford and Rural Homes and continues to work as an experienced interim manager
within housing.
• Alison is a member of the Risk & Assurance Committee.
37BOARD BIOGRAPHIES (CONT’D)
Current board members are as follows (cont’d)
Keith Holloway
• Keith is a founding director of Adept People and Performance Ltd, a company that provides consultancy services to housing
associations. Formerly a housing association Chief Executive, he has a wide range of skills and experience relevant to the
housing sector.
• Keith is Chair of the Development Committee and a member of the Governance Committee.
Naz Parkar
• Naz has worked in social housing for over 30 years, and joined the Home and Communities Agency as head of investment
before becoming an executive director in 2013.
• He re-joined local government in 2017 as the director for economy and infrastructure and in 2018 moved to the role of
director of growth and housing at Kirklees Council.
• Naz is a member of the Development Committee
David Perry
• David is a retired managing director of several Shell UK subsidiary companies. He also spent time leading the European
operation of a foreign exchange brokerage, giving him significant experience in the world of commercial finance.
• David is a member of the Customer Service Committee
Philip Severs
• Philip is a chartered accountant. He has substantial public and private sector experience and has held a number of non-executive
roles throughout his career. He was formerly finance director of Sheffield Hallam University and is currently Chairman of
Harrogate Healthcare Facilities Management LTD.
• Philip is chair of the Risk and Assurance Committee.
38MANAGEMENT BIOGRAPHIES
Current management members are as follows
Nick Atkin
• Nick joined Yorkshire Housing as Chief Executive in April 2019. He as a track record of leading organisations
through transformational change, driving performance improvement, with a focus on maximising the untapped
potential from businesses and people.
• Nick has previously introduced a fully flexible / remote working approach. He also led the move to 90% of customer
led transactions to be delivered through online self-service routes
• He is regularly included in the top 25 most influential people in housing and is a keen advocate of innovation. He
uses digital as an enabler to drive fundamental change in how businesses operate.
• He is also a disruptor in the ‘future of work’ debate and has been paperless for 17 years
David Bolton
• David has been director of property services since 2008 and is responsible for the delivery of Yorkshire Housing’s property
related services to over 18,000 homes across Yorkshire including Leeds City Council homes.
• He also takes responsibility for health and safety, landlord compliance services and is lead director for Yorkshire Housing’s
home improvement agencies.
• David is a board member of Yorkshire Transformations Ltd and a trustee of East Lancashire Hospitals NHS Trust.
• An alumnus of the University of Central Lancashire, David also support the University Business School in a voluntary
capacity
Andy Gamble
• Andy joined Yorkshire Housing as director of Development in June 2017.
• He has over 30 years’ experience in the affordable housing sector, working with public and private companies. He
previously worked at Accent Group where he led on development and growth since 2005.
• Andy began his career with British Waterways Board, as an assistant mining surveyor.
• He is a chartered surveyor and member of the Chartered Institute of Housing.
39MANAGEMENT BIOGRAPHIES (CONT’D)
Current management members are as follows (cont’d)
Michelle Gregg
• Michelle leads Yorkshire Housing’s business transformation programme which will ensure the organisation is geared
up to meet the challenges of a changing sector.
• She also has responsibility for HR, learning and development and communications.
• Michelle joined in 2015 from Merseyside and Cheshire-based Plus Dane group where she was interim executive
director of neighbourhoods.
• Her previous roles include deputy chief executive for North West-based Your Housing Group.
Guy Millichamp
• Guy joined the group in 2001 and has held a number of finance roles before becoming director of finance in February
2015.
• As well as being Yorkshire Housing’s chief financial officer, Guy also leads on business planning, governance, risk
and assurance.
• A chartered accountant with a background in the not for profit sector including charities, education and housing.
• Guy is currently a board member at Rochdale Boroughwide Housing.
Cath Owston
• Cath Owston is interim director of customer services at Yorkshire Housing. Her remit includes responsibility for our
neighbourhoods, independent living service and customer contact centre teams.
• Cath joins Yorkshire Housing from Rochdale Boroughwide Housing where she was executive director of customer
and community. Her thirty years in housing include four years at New Charter Housing Trust Group as director of
customer experience and five years at Trafford Trust where she was transformation manager.
• She is also a board member with Bolton at Home and Chair of Starts with you, a social enterprise in Bolton
40CONCLUSION
A strong, ambitious and well-run association with 16,000 properties, tracing its roots back to 1968
Moody’s A3 credit rating (Baseline credit assessment baa1) and G1/V1 ratings from the RSH
Financially robust with strong and improving performance (not reliant on property sales)
Clear focus on core business, with social housing activities representing 87% of turnover
Well prepared for the impact of Universal Credit & welfare reform
Simple corporate structure
Experienced executive and non-executive teams
Excellent track record of development, adding over 3,000 new homes since 2010
Properties throughout Yorkshire, the largest county in England with a growing & diverse economy
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