Investor Presentation
Peabody Plaistow Hospital, Newham
TCHG St James’ Court, Tunbridge Wells
Peabody Caledonian Point, Greenwich
Disclaimer
The information contained in this investor presentation (the “Presentation”) has been prepared to assist interested parties in making their own evaluation of the Peabody Group and Town and Country Housing Group (the “Groups”) and is believed to be in all material respects accurate, although it has not been independently verified by the Groups and does not purport to be all-inclusive. Neither the Groups nor any of their representative directors, officers, managers, agents, employees or advisors makes any representations or warranty (express or implied) or accepts any responsibility as to or in relation to the accuracy or completeness of the information in this Presentation (and no one is authorised to do so on behalf of any of them) and (save in the case of fraud) any liability in respect of such information or any inaccuracy therein or omission there from is hereby expressly disclaimed in particular if for reasons of commercial confidentiality information on certain matters that might be of relevance to a prospective purchaser has not been included in this Presentation.
No representation or warranty is given as to the achievement or reasonableness of any projections, estimates, prospects or returns contained in this Presentation or any other information. Neither the Groups nor any other person connected to them shall be liable (whether in negligence or otherwise) for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any statement in or omission from this Presentation or any other information and any such liability is expressly disclaimed. This Presentation may include certain statements, estimates and projections prepared and provided by the management of the Groups with respect to its anticipated future performance. Such statements, estimates and projections reflect various assumptions by the Groups' management concerning anticipated results and have been included solely for illustrative purposes. No representations are made as to the accuracy of such statements, estimates or projections or with respect to any other materials herein. Actual results may vary from the projected results contained herein.
By reading this Presentation, you agree to be bound by these limitations.
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Introduction
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Peabody Merchant's Walk, Tower Hamlets
Key messages
A combination of two strong housing associations creating a 65,000-home organisation, believed to be the UK’s 5th largest housing association
A strategy to deliver more and better homes while improving service delivery and lowering cost
Combination allows increased development output by TCHG in Kent and Sussex, following funding restructure
Growth in influence to develop stronger strategic partnerships
Strong corporate governance with experienced management teams
TCHG to remain a separate subsidiary under group-wide back-office and treasury management
Complementary credit strengths; enlarged group has a strong balance sheet with low gearing
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Corporate structure and governance
Shared board and committee membership
Clear management lines of reporting
Wholly controlled subsidiary with Intragroup Funding and Operations Agreement
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TCHG becomes a subsidiary of Peabody
Peabody Trust
TCHG Group
development vehicle
Other subsidiaries
Group Board
TCHG Board: local development and customer services
committees
Group committees: treasury, audit, risk,
remuneration
New Group Structure New Group Board Structure
Town and Country Housing Group
TCHG manages 8,920 homes in the South East (Kent, Sussex and Surrey)
8,769 are social housing units and 151 are market-rent units
One of the first stock transfers in 1992 (from Tunbridge Wells Borough Council), over half the current stock was built by TCHG
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Housing association engaged in community building
The Group consists of six companies…
Registered Provider and ultimate parent, acting as Group’s central administration hub TCHG
(Dormant) Charity arm of the Group, activity now takes place in TCHG TCHG Foundation
The Group’s vehicle for regeneration and housing development Monson Homes
Financing vehicle TCHG Capital TCHG Living (Dormant) Registered Provider
Joint venture company providing repairs and maintenance for the Group Countrywise Repairs
Transaction rationale
Utilising the strength of the Peabody brand to unlock development opportunities
Enhances TCHG’s capacity to deliver without impacting gearing, compared to developing as a standalone entity
Helps meet political pressure to develop
Being part of an organisation that has a strong, distinctive and credible voice in the sector, but maintaining TCHG’s local presence
Provides TCHG with a competitive edge against large and regional competitors operating in its geography
Peabody’s and TCHG’s aligned outlook and aims will pave the way for strong delivery of homes across London and the South East
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TCHG Lakewood, Tunbridge
Wells
Peabody Blackfriars Estate,
Southwark
Development proposition
Peabody existing development plans unchanged at 2,500 per annum
From a strong track record of realising current targets, TCHG to gradually increase development to 800 homes per annum from recent 300 homes per annum
Similar tenure profile to Peabody’s programme
1/3 social, 1/3 market sale, 1/3 shared ownership
Proven demand in targeted areas
Sharing knowledge / best practice whilst maintaining local market presence
Group-wide governance oversight
Consistent risk appetite
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Joining Peabody enables TCHG to more than double future development
TCHG Lakewood, Tunbridge
Wells
Existing integration delivery
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TCHG merger not to affect on-going integration plan
Merger Business Case; Inaugural business Plan; Group
Strategy 2018-201
Landlord amalgamation & Hive Down
Rationalisation of group structures
Staff restructures
People First culture programme
Performance management
framework New Terms and Conditions
Infrastructure and Networks
Single website, Intranet, Branding and Communications
Early Office Moves Accommodation Strategy
Single Call Centre telephony
Single Asset Management
System Single Financial Platform
CRM roll out and Contact Centre integration
Single Development
platforms
Single Housing Management
System
Integration of FM merger complete by January 2019
Existing
integration
plan
Peabody Family Mosaic Integration Update Bringing in
new
subsidiary
Integration of TCHG back office functions planned for 12 months from April 2019
Merger timetable
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October/
November
November
December
March
April
Board decisions
5th November – plans for TCHG to join Peabody announced (see RNS)
Resident consultation
Consents finalised
1st April – Completion
January 1st Designate Group Board Meeting expected
February
TCHG EGM and shareholder approval1
Refinement of financial plan
Resident consultation feedback
2019
2018
Notes
1 TCHG shareholders are the board members
Financials
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TCHG Penns Yard, Pembury
Historic financial highlights
31 March 2018 Peabody TCHG Total
Residential portfolio size 55,717 8,920 64,637
Moody’s / S&P rating A3 A+
Balance sheet reserves £2.7 bn £389 m £3.1 bn
Debt per unit £35,000 £39,000 £35,000
Gearing 31% 48%
Unsecured properties 17,000 1,407 18,407
Employees 3,310 142 3,452
Turnover £609 m £60 m £669 m
Turnover excluding sales £425 m £53 m £478 m
Operating margin 35% 45% 37%
Net surplus £175 m £18 m £193 m
Surplus before sales
(including existing properties)
£75 m £10 m £85 m
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Peabody Fish Island Village, Tower Hamlets
Peabody Caledonian Point, Greenwich
TCHG Lakewood Phase 1, Tunbridge Wells
Conclusion
Conclusion
A combination of two strong housing associations creating a 65,000-home organisation
Growth in influence to develop stronger strategic partnerships
Strong corporate governance with experienced management teams
Alignment of funding principles to ensure efficient and effective capital structure
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Peabody St John’s Hill, Wandsworth
TCHG MacDonald Court, Tunbridge Wells