Karbon Homes has had its external group credit rating improved to ‘A’/Positive, by ratings agency Standard & Poors.
The northern housing association, which owns and manages almost 32,000 homes across the North East of England and Yorkshire, has had its outlook boosted from ‘stable’ to ‘positive’, reflecting its ‘relatively strong key financial metrics despite challenges affecting the social housing sector’.
In the report, S&P outlined that they were able to move Karbon’s rating outlook from ‘stable’ to ‘positive’ because they predict that Karbon “will maintain relatively strong key financial metrics despite challenges affecting the social housing sector’’ and that Karbon’s levels of borrowing and access to liquidity to fulfil its strategic objectives “are relatively strong compared with those of many rated peers’’.
Commenting on the result, Paul Fiddaman, Chief Executive of the Karbon Homes Group, said: “This is a very welcome result and a testament to the efforts we’ve made at all levels of the organisation over the past 12 months, in continuing to deliver against our ‘Stronger Foundations Strategy’, whilst in the midst of a turbulent economic and political backdrop.
“This has been a challenging time for our customers too, dealing with the increased costs of living, as well as for our supply chain in delivering new homes and investing in our existing homes. Yet, through the dedication of our colleagues, our board and our external partners, we believe Karbon is well-placed to respond positively to these challenges, making sure we can continue to work towards our mission of provide strong foundations for life across the communities we serve.’’
During the 2022/23 financial year the Karbon Homes Group completed the development of 536 new social and affordable homes across the North East and Yorkshire. It also helped its customers maximise their benefit income, generating close to £4m of income gains, and invested in a number of its existing homes to improve their energy efficiency, meaning that over 70% of its homes now have an Energy Performance Certificate rating of C or above.
The organisation has also completed a number of mergers and acquisitions, including the transfer of ownership of Byker Community Trust in April 2021, and the merger between existing subsidiary of the Karbon Group York Housing Association, and Leeds and Yorkshire Housing Association to form 54North Homes in December 2022.
Paul added: “It is very encouraging that the ratings agency recognises Karbon’s successes in recent mergers and acquisitions, where we’ve been able to integrate these businesses and continue to deliver on our promises to our customers.
“We know there are still challenges ahead for the UK economy in 2023 but are pleased that S&P acknowledge Karbon’s experienced management team who are delivering the Group’s strategy consistently with its operational capacity.’.
At the same time as the revised outlook, Karbon had its ’A’ long-term issuer credit rating affirmed on the £250m bond it issued in 2018.
Header image: Karbon is investing in building new affordable homes
