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Leicestershire-based social housing and care provider EMH Group has had its A+ rating and stable outlook affirmed by ratings agency Standard & Poor’s (S&P).
S&P said the company plays “an important role” in the provision of social housing in the UK, which increases its financial strength, and works in a “low risk” industry, focusing mainly on its core objective of providing homes for social rent.
In 2018 the group was named as one of Homes England’s strategic partners, securing £30.5m in grant funding to deliver affordable homes over four years.
It was then given a further £12.9m as part of an extension of the partnership a year later.
Last year it also secured a £100m loan from the Pension Insurance Corporation in order to increase its development programme and has ambitions to build around 2,500 affordable homes in the East Midlands by 2023.
The new financing transactions have given the company stronger liquidity, S&P said.
EMH currently owns 20,000 homes across the region, and also runs a care and support arm as well as a specialist rural homes business.
S&P’s report also highlighted that the group’s operational performance continues to improve, particularly around areas impacted by Universal Credit.
Although the roll-out of Universal Credit caused gross arrears to increase from 5.3% of rent and service charge receivables last year to 6.6%, S&P said it considered management “well placed to control this in future”.
“We affirmed the ratings because we consider that EMH has consistently focused on its core social housing business. It also has a very strong financial profile with moderate debt levels and has improved its liquidity through two new financing transactions during the past 12 months,” the report said.
It did note that the last financial year, to 31 March, was "tougher" for the company. Having reduced vacancy rates for three years, they increased slightly from 1.2% to 1.4%. This was still below the typical rates for the sector, the report said.
Andrew Kilby, executive director – finance at EMH Group, said: “This rating reflects our strong financial position and the fact that we are both attractive to investors and a trusted government partner on the delivery of social housing.”