Investing in A2Dominion Group bonds

In 2023/24 we recorded a turnover of £399.6m and a net deficit of £21.0m. This has come at a time when we have been increasing investment in our existing homes, while being impacted by increases in operational costs, and a planned fall in sales income. We achieved an operating margin of 12.2%.

Our recent performance reflects the Group’s decision, outlined in our new Corporate Strategy, to refocus finances on improvements to services and customers' homes, as well as investing in building safety work.

The last year saw a continued increase in investment in maintaining and improving properties to ensure customers’ homes are safe and comply with new regulations (£96.8m – 2023: £86.1m). The Group will also be investing approximately £612m in customers’ homes over the next five years, in line with our 2030 vision to provide homes people love to live in. 

We have taken on a new approach to property development, which focuses on the regeneration and redevelopment of existing homes and neighbourhoods, moving away from our previous emphasis on private sale homes via the FABRICA by A2Dominion brand.  

In 2024 we also decided to write-off the costs of a legacy IT programme and introduce a new approach to improving systems for customers and colleagues, driving service improvements and efficiencies that will be more cost effective in the medium term. 

The change in direction is one of several initiatives helping to underpin work to improve services and outcomes for our customers, as well as return to a compliant regulatory grading after we were graded G3/V2 by the Regulator of Social Housing in January 2024. 

Our balance sheet remains strong, with a Fitch A credit rating (outlook negative), more than £3.5bn of fixed assets and investments, and a reserves position of over £1bn.  

With significant liquidity and a strong asset base, we have been taking the tough calls now to reset the business to ensure it is well prepared to meet the significant challenges that will be faced across the wider housing sector in the years to come so that we can do more to support customers and alleviate housing needs.  

Our Funding

We have £695m (31 March 2023: £695m) of unsecured funding through the retail and wholesale markets. These funds have supported the delivery of our development programme and our investment in market rented housing across London and southern England.

As at 31 March 2024, we had £500m of revolving credit facilities (of which £351m was undrawn), our total loan book stood at £1.89 billion of which £1.54 billion was drawn, and the Group held cash of £45m.

External funding and liquidity

We continue to enjoy good access to funds via banks and capital markets. We repaid in full a £150m retail bond that was issued in 2013 and are reviewing a number of initiatives to reduce our average cost of funds.

Financial planning for the future

Our priority is to safeguard the organisation for the benefit of our customers, so we take action to help protect the organisation from the impact of external economic conditions. We also have a commitment to protect our customers’ homes and the services we offer them, so we will be investing in these as a priority.

Retail bond 2022

Our first retail bond was released in September 2013 and closed within two days, raising £150m towards building new homes. In April 2022, we prepaid half of this bond. The remaining £75m matured on 18 October 2022. The 4.75% unsecured sterling bonds, were guaranteed by A2Dominion Housing Group Limited (A2Dominion), and the proceeds were on-lent to members of the A2Dominion Group.

Retail bond prospectus 2022

Retail bond 2026

We issued a retail bond in 2014. The offer period closed after just one day and raised £150m towards building new homes.

The 4.50% unsecured sterling bonds, due 2026, broke new ground with a maturity of 12 years, the longest ever in the retail bond market.

Euro Medium Term Note Programme

In 2016 we set up an unsecured £1bn EMTN Programme to facilitate our future funding requirements.

To date we have issued a total of £485m. The issues have all been rated at A+ or A by Fitch Ratings, mirroring both the programme and our long-term corporate rating.

Our issues:

£250m 12-year unsecured sterling wholesale bond with a 3.5% coupon
£75m 10-year bond with a coupon of 2.605% issued in December 2019
£85m 11-year bond with a coupon of 2.625% issued in December 2019
£75m deferred bond issued in March 2022 at a coupon of 4.25%

Our Board approved Business Plan shows that we do not need to raise new finance in the capital markets over the next 12-months. Consequently, we have allowed our existing Listing Particulars to lapse, but intend to reinstate our EMTN programme again at a future date when funding is required.