Combined Charts

Trends in Income and Expenditure
The chart shows a four-fold and steady increase in income from social housing. Expenditure shows much more erratic growth, mainly because of fluctuating repairs and maintenance costs. As a result of this, SBIT is also volatile and, at times, it does not fully cover net interest payable, mainly in the first few (historical) years and in mid-forecast (2010, 2014). The last ten years are mainly stronger with surpluses after tax.

Trends in Balance Sheet
This shows the steady increase in both SHG and net assets, increase by 2.5 times over the period. Capital and reserves grows more slowly and unsteadily to 2018 but recovers more strongly after that. Debt shows the opposite pattern, with sharper increases in mid forecast then slower growth after that.

Balance Sheet Structure
This standardised balance sheet shows even more clearly the large and stable contribution of SHG to the financing of property assets, the small increase in the reserves percentage and the eventual reduction in the debt percentage. The initial peak and the mid-term peak in debt are also revealed.

Expenditure Components of Operating Cash Flow
The growing but volatile operating cash flow covers interest for almost all years except the weakest period in mid-forecast. After that it increases more strongly. Cash flow after capital expenditure is always negative except in 2031, with the biggest deficits in the mid to late years, (plus the recent historical period.)

Major Cash Inflows and Outflows
Operating cash flow is volatile but growing and new debt largely reflects an opposite profile to compensate. Five substantial “spikes” in new debt requirements are indicated in 2012, 2015, 2021, 2024 and 2025 as well as the historical 1999 and 2000. Interest grows steadily and debt repayments peak in 2022 then uaccountably fall away. Capex is also stable after the first few years until it declines somewhat in the last five years.

Profit and Cash Cover Ratios
All three ratios move very much in tandem but reflect the extreme volatility of operating profit and hence cash flow. Cash interest cover is generally better than I & E cover, which in turn is better, by definition, than cash debt service cover.

Overall all three are above 1.0 much more often than not, but there are downwards ’spikes’ in 2004, 2013, 2016, 2022 and 2031 when cash flow is tighter.

Debt Multiples
Debt/EBITDA is comfortably below 12.5 in most years except for the period between 2012 to 2016, and also in 2021. These ’spikes’ are caused by the big dips in operating surplus during that middle period. Total debt/unit rises steadily with inflation from £8,000 in 2002 to £16,000 by 2032, none of these figures being excessively high allowing for inflation.

Measures of Leverage
All measures trend down slightly over the forecast period. Net debt to estimated EUV(SH) is the lowest, starting at 45%. Debt initially is at 75% against net asset value and 83% against the net present value of the 30 years’ cash flows plus the terminal value. Debt is at 14% of the NPV of 30 years’ cash flows without the terminal value, but does fall below 100% by 2032.

Multi-Period Cover Ratios
The HALCR shows good initial cover of 1.15, improves slowly to 1.20% by 2023 then accelerates to 1.30. The LLCR (30 constant) starts at a low 0.65 but improves strongly to finish above 1.0 by 2032.

NPV Values v Debt
jAs the increase in debt slows after 2017 the NPV of 30 years plus ?????? grows to equal the debt total. The margin between the NPV of 30 years plus the TV and debt also increases more sharply after 2017.