Half-year Financial Report

Incommunities Limited trading update and unaudited financial results for the period ended 30 September 2025

Incommunities Treasury Plc's parent company, Incommunities Limited (IC), today announces the release of its unaudited half-year financial statements for the period ended 30 September 2025.

IC is one of the largest Registered Providers in Yorkshire, owning and managing over 22,000 homes across Bradford and Huddersfield.

Financial and Operational Highlights

The Group delivered strong, well-managed financial and operational performance in the first half of the year. Results remain in line with management expectations and reflect the Group's disciplined approach to financial management, investment planning and service improvement.

Highlights include:

·      Net surplus of £7.0m, against £5.7m for the same period last year, £1.5m ahead of budget.

·      Interest cover of 305%, against 307% for the same period last year, 9.7% ahead of budget

·      Regulatory EBITDA MRI interest cover of 114.8% against 110.3% for the same period last year.

·      Regulatory Gearing of 60.2% against 58.7% for the same period last year

·      Drivers of performance compared to budget include:

o  Lower interest costs (£0.6m), supported by refinancing activity.

o  Increased surplus from property sales: £1.0m

§ First-tranche shared ownership sales: (£0.2m)

§ Fixed asset sales: £1.2m

·      Investment programme: YTD spend of £9.4m, against £6.8m for the same period last year, reflecting continued investment in improving the quality of tenants' homes.

·      Development programme: YTD spend of £15.3m, against £15.4m for the same period last year, supported by £0.3m from first tranche sales and £8.3m in grant income.

·      Liquidity remains strong with £11.1m cash at period end and £140m of undrawn facilities.

·      All funder covenants have been met.

Business Outlook

Despite a challenging economic backdrop, IC has demonstrated strong financial resilience at the mid-year position. The Group's upgrade to G1 continues to demonstrate the strength of its governance, strategic oversight, and risk management approach.

The Corporate Strategy launched in April 2024 provides a clear direction for the next five years, centred around our vision: to create the best customer experience to improve everyday lives. With customers at the heart of the strategy, delivery is focused on three priority areas: Homes, Services and Communities, supported by a comprehensive change programme strengthening service quality and operational efficiency.

Operationally, IC has made significant progress in addressing cases of damp and mould, reducing reported cases through targeted interventions and improved processes. Work continues to drive further reductions. The Group has a high proportion of stock condition surveys completed within the last 5 years to enhance understanding of asset quality. The programme expectations - 85% within by March 26, and 100% by Dec 26 - enable data-driven long-term investment planning and support the delivery of our sustainability ambitions.

IC enters the second half of the year with a stable financial platform, strong liquidity and clear strategic momentum, positioning the organisation well to continue delivering safe, high-quality homes and services for its customers.

Looking ahead, the Group is preparing to build on this progress in the remainder of the financial year. Headline full-year expectations include:

·      Delivery of 246 new homes with total development expenditure of £52.4m compared to 248 new homes and £49.5m of spend in the previous year.

·      £3m investment in damp and mould interventions, £0.5m lower than last year. This reduction reflects improved diagnosis, preventive measures, and maturing processes, with spend expected to gradually decrease over the coming years as proactive approaches further limit recurrence.

·      £4m net sustainability investment, comprising £9m capex supported by £5m grant funding. The net reduction compared to last year (£6.3m capex, £1.3m grant) is a direct result of the successful application for Wave 3 of the Warm Homes Fund and subsequent refinements to programme phasing. A significant acceleration in spend and delivery is expected over the next two years.

·      Approximately £15m allocated to core component replacements, £1m higher than the previous year. This investment is expected to continue on an upward trajectory, reaching around £18m by 2029 in line with stock intelligence and long-term asset management plans.

·      £4m is planned for Fire Risk Assessment compliance works, doubling last year's allocation of £2m, reflecting the continued prioritisation of building safety across the portfolio

·      Regulatory and ratings updates expected in early 2026.

Economic Outlook

The UK Government has confirmed that housing associations will be permitted to increase rents by CPI + 1% annually for ten years from April 2026, providing long-term income visibility and supporting sector financial resilience. The Government has also announced initiatives to accelerate housebuilding through streamlined planning processes and increased grant funding under the Social and Affordable Homes Programme. While these measures are positive, delivery of new social housing continues to face challenges arising from cost inflation, labour constraints and elevated interest rates.

Against this backdrop, IC strategic change programmes are expected to continue driving improvements in operational and customer KPIs. The Group's V2 viability grading from the Regulator of Social Housing (a compliant grade) confirms IC has the financial capacity to manage a reasonable range of adverse scenarios, while highlighting the importance of strong risk management. The regrade reflects a deliberate decision to prioritise increased investment in existing homes, supported by a programme of comprehensive stock condition surveys that will identify and inform future investment priorities.

Looking ahead, IC maintains a cautiously optimistic outlook for 2026-27, with continued focus on maintaining and improving existing housing stock, advancing sustainability initiatives, and navigating financial and regulatory pressures while making the most of rent policy certainty and enhanced government support.

Appendix

 Statement of Comprehensive Income  

 Statement of Financial Position  

Disclaimer

These materials have been prepared by IC solely for use in publishing and presenting its results for the six months ending 30 September 2025.

These materials do not constitute or form part of and should not be construed as, an offer to sell or issue, or the solicitation of an offer to buy or acquire securities of IC in any jurisdiction or an inducement to enter into investment activity. No part of these materials, nor the fact of their distribution, should form the basis of, or be relied on or in connection with, any contract or commitment or investment decision whatsoever. Neither should the materials be construed as legal, tax, financial, investment or accounting advice.

These materials contain forward-looking statements regarding IC's financial condition, results of operations, business, and future prospects. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and depend on circumstances that may change. There are several factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including many factors outside IC control.