These areas build on our current focus and reflect our ambition to be a leading UK provider of end-to-end specialist services within the housing and property sector, supporting our customers to meet their own compliance and sustainability goals.
Our customer base is dominated by relationships with Local Authorities and Housing Associations, servicing the social and affordable housing sector but also include public buildings and education, as well as the commercial and private sector. The very nature of our work ensconces us within the heart of sustainability in all its aspects; Environmental, Social and Governance.
We are proud to have the privilege of undertaking this significant responsibility and fully committed to creating value and making a positive difference whilst contributing to a better future for us all; our employees, our clients, our communities and our shareholders.
Government backed social value and net-zero targets provide macro-economic drivers for the future
The growing movement to better balance society and care for the environment is underpinned by the Government’s commitment to invest in these areas. This combination creates significant opportunities for growth in exactly the areas our business focuses on:
Over 1 million people are stuck on local authority housing lists, some for more than a decade. An estimated 380,000 affordable homes per year are needed for the next 15 years, of which 100,000 have been earmarked as social rent. The amount of capital investment needed is estimated at over £10 billion per year.
The UK Regulator for Social Housing forecasts £2.7 billion will be spent on capitalised repairs and maintenance expenditure in the twelve months to 31 March 2022.
In November 2020, the UK Government updated its ten-point plan to achieve net-zero carbon emissions by 2050. The ten-point plan will mobilise £12 billion of Government investment, and potentially three times as much from the private sector.
The Government estimates £11 billion in private investment in the 2020s and has pledged over £1 billion in funding for greener buildings, including 600,000 heat pump installations per year by 2028.
In addition, the Government has committed to further funding for the Social Housing Decarbonisation Fund to continue upgrading the least efficient social housing.
£1.3 billion has been made available to accelerate the roll-out of electric vehicle charging points across councils in the UK.
Regulated and compliance-led markets with strong and steady growth prospects
The business is founded on specialist compliance-led and regulatory driven requirements. These vital, essential services are, generally non-discretionary and non-cyclical in their nature – the demand is consistent – thus sustained through economic cycles.
These regulated services require considerable investment in training, skills and qualifications, creating higher barriers to entry which also provides opportunities for consolidation through acquisitions and integration. Adding value to our customer base, affords higher premiums than standard building and facilities management contracting: increasing our scale, both organically and acquisitively, will drive further efficiencies through scale and operational excellence.
The public’s awareness around safety & compliance standards continues to grow, the legislation is becoming more stringent and the respective reputational risk to organisation is ever-increasing, providing greater responsibility for organisations to ensure the safety & compliance of their properties and people.
The transition towards green technologies will serve to create new regulatory requirements, which we are well placed to provide additional services for.
Long-term service contracts and recurring revenues offer resilience and good future visibility
Our service contracts typically span three years or more. Due to the ever-increasing health, safety and environmental regulatory requirements, there is a consistent demand for our services to keep our customers safe and warm.
This demand generates steady committed revenues that recur from month to month and year to year, resulting in robust, long-term relationships with our customers with the stable and consistent flow of revenues enabling us to plan ahead, whilst providing greater visibility of our forward earnings expectations.
In addition, our involvement in these critical workstreams, create further opportunities to generate revenues from complimentary workstreams with our customers.
Strong cash generation create earnings-enhancing opportunities: both organically and acquisitively
With our focus on working capital efficiencies, the business possesses strong cash generative qualities.
This allows us to increase investment into the business and our people; broadening and deepening our skill base and expertise, bringing about significant efficiencies as well as reinvesting for growth including green accreditations, which in turn will enable to increase our organic revenue streams.
In addition, our cash generation creates opportunities for strategic acquisitions that broaden and deepen our expertise in our three key strategic pillars, expand our geographic reach and offer an opportunity for consolidation within our fragmented markets. Successful integration will result in synergies through increased collaboration of subsidiaries, improved efficiency and cost-savings, whilst driving further revenue and market share opportunities.
Furthermore, whilst we postponed our dividend policy as we sought to strengthen our financial position, our cash generative qualities have served to reduce our debt levels ahead of schedule and the Group is committed to re-instating and re-introducing a progressive dividend policy, when conditions allow.