YORKSHIRE HOUSING

INVESTOR PRESENTATION

AUGUST 2019

Nick Atkin Chief Executive

Guy Millichamp Director of Finance

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DISCLAIMER

2

PRESENTING TEAM

Nick Atkin - Chief Executive

Nick has a track record of leading organisations through transformational

change, driving performance improvement, with a focus on maximising

the untapped potential from businesses and people.

Nick has previously introduced a fully flexible/ remote working approach.

He also led the move to 90% of customer led transactions to be

delivered through online self-service routes. He is regularly included in

the top 25 most influential people in housing and is a keen advocate of

innovation. He uses digital as an enabler to drive fundamental change in

how businesses operate. He is also a disruptor in the ‘future of work’

debate and has been paperless for 17 years.

Guy Millichamp – Finance Director

Guy joined the group in 2001 and has held a number of finance roles

before becoming director of finance in February 2015. As well as being

Yorkshire Housing’s chief financial officer, Guy also leads on business

planning, governance, risk and assurance.

A chartered accountant with a background in the not for profit sector

including charities, education and housing, Guy is currently a board

member at Rochdale Boroughwide Housing. He lives in Leeds with his

wife and three children.

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CREDIT HIGHLIGHTS

A successful, well-run regionally focussed housing association

With broad-reaching portfolio across 20 local authorities throughout Yorkshire

Focus on financial health as development programme accelerates

Moody’s A3 credit rating and G1/V1 ratings from the RSH

Trusted partner of MHCLG and HE – one of only 23 strategic partners nationally

On track to deliver current programme of 3000+ homes by 2021, and another 3,000 by 2026

Providing over 16,500 homes across a range of tenures

Supporting over a thousand elderly or vulnerable tenants

Well funded, simple business model with £130m liquidity (£50m cash, £80m secured facilities)

Experienced board and management with appropriate skills to oversee current strategy

4

WHO WE ARE

STRONG REGIONAL PRESENCE

• Yorkshire’s largest developing Housing

association.

• Founded in 1968, now headquartered in Leeds,

through merger with other Yorkshire HAs, and

more recent growth through development of

new homes

• Founder member of Homes for the North

• Multi tenure portfolio with 85% on social or

affordable rents

• 2/3rds less than 50 years old

• 2/3rds houses and bungalows

• No high rise tower blocks

• Mix of family accommodation & supported

housing (older persons & independent

living)

• Strong focus on sustainable communities

6

• Serving a widely spread urban and rural community

across Yorkshire including

* older people

* tenants with support needs

• Long term strategy to deliver more homes

• While maintaining associated social added value

• And cutting costs to improve resilience

DELIVERING MORE

Current Strategic Objectives (under review):

• Growth

• Independence

• Profit

• Transformation

7

FUTURE DIRECTION (WORK IN PROGRESS)

8

• Growing the business and delivering high

social impact has required YH to maintain

a sound financial base

• Prudent management have enabled us to

secure substantial government grant

Trusted partner of MHCLG and Homes

England, as well as other HAs – one of only

23 strategic partners with HE

Regional agent for Help to Buy

Limit of 15% market sale and 25% shared

ownership

SOUND AND STABLE FINANCIAL BASE

Key data 2015 2018 20191

Units 16.1k 16.7k 17.0k

Regulatory

JudgmentG2/V1 G1 / V1 G1 / V1

Turnover (£m) 92 101 113

Social Housing

Lettings T/O £m80 87 85

Overall Operating

Margin27% 32% 31%

SH Core Margin 27% 32% 29%

Gearing 40% 47% 45%

EBITDA MRI

Interest cover1.74 1.56 1.78

1) As published in, or based on, unaudited trading update 29th July 2019

Funding Programme Grant

AHP (2015-18) £17m

SOAHP (2016-21) £25m

LTSP wave 2 (2021-25) £62m

9

Supporting sustainable communities is at the core of YHG’s strategy. This involves

• Meeting demographic needs - more homes for the elderly and those with special needs

• Two extra care schemes (more planned)

• Providing support for tenants to improve their lives

• Support people into a position of financial independence

• Help customers into employment and training

• Offer more support to those who need it

• Focus on our neighbourhoods.

We embed our social purpose in our KPIs

DELIVERING SOCIAL IMPACT

Measure by 2020 2019 performance Status

People into employment, better jobs, training,

volunteering

1,000 1,020 (Jun 19) Exceeding target

Vulnerable people helped to live independently

pa

15,000 17,231 Exceeding target

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MEETING THE

CHALLENGE

1. Growth

STRATEGIC OBJECTIVES

4. Transformation

3. Profit – financial performance

strong and on track

2. Independence – more important

than ever to support our customers

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BUSINESS OPERATIONS

Litton Road, Keighley

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STRONG REGIONAL PRESENCE

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BALANCED PROPERTY PORTFOLIO

Bedrooms

7%4%

14%

5%

15%18%

13%

16%8%

Pre 1919

1919-1944

1945-1964

1965-1974

1975-1984

1985-1994

1995-2004

2005-2014

2015+

Build

Type Purpose

2%1%

28%

39%

27%

3%Bedspaces

Bedsits

1bed

2bed

3bed

4bed

5bed+

80%

3%2%

2%3%

9%1%

General needs

Housing for older people

Supported housing

Market rent

Shared ownership

Intermediate Rent

Other

34%

55%

11%

Flat

House

Bungalow

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HIGH QUALITY ASSETS

New Build

3,120 new homes by 2021

High quality and easy to heat

Appraisal

Value of each property

assessed

c.100 uneconomic homes pa

sold

H&S

£3m pa spent on building safety

No high rise tower blocks

Positive independent H&S review

Investment

99.6% Decent Homes

£15m pa major repairs spend

sustained

Strategic

Asset

Management

16

GOOD DEMAND AND LOW ARREARS

No. of current empty homes as a % of total stock

Current tenant arrears as % of rent roll

2,527 customers on universal credit, but up

to 7,500 anticipated when fully rolled out,

and more complex cases

Investment in rent collection has minimised

the impact of universal credit throughout

whole region

Strong track record in rent collection and

arrears control – sector leading

We actively pursue former tenant debt

through the courts, when necessary, and

we collect around one third of outstanding

arrears from former tenants

Available to let voids 0.75%, with remaining

flats awaiting sale1.4%

1.5%

1.2%1.3%

1.4%

1.0%

1.3%1.2% 1.2%

1.5% 1.5%1.4%

1.5%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

Actual Sector Average

1.8%2.0% 2.0% 2.0%

2.1% 2.1%1.8% 1.7% 1.7%

1.5% 1.5% 1.4%1.6%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

Actual Sector Average

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STABLE CUSTOMER BASE

Age banding Length of tenancy

Tenure type Payment method

13%

32%

25%

30%

0-1 year

1-5 years

5-10 years

10 years+

83%

10%

2%3% 2%

social / affordable rent

sub-market rent

market rent

home ownership

supported housing

2%11%

37%37%

7%6%

Cash/Cheque

Debit/credit cards

Direct debit

Housing benefit

Rent cards

Standing orders

25%

44%

27%

4%

Retired

41-retirement age

26-40

0-25

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DEVELOPMENT

Aynham Close, Grassington

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BUILDING ASSETS FOR THE FUTURE

We plan to develop 6,120 new homes, predominantly for social / affordable rent by 2026,

with over 1,000 already completed.

Mostly family homes, all in areas where there is strong demand

Completions at 450 pa, slowed and are now accelerating again.

-

200

400

600

800

1,000

1,200

1,400

2019 2020 2021 2022 2023 2024 2025 2026

Aspirational new homes completions

Social / affordable rent Rent to Buy Shared Ownership Market sale Market rent

18%

19%

22%

41%

10 yr programme progress

Completed In contract

Named sites Unidentified

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DEVELOPMENT CASHFLOW (£M)

All schemes are appraised on both financial and lettable criteria, with minimum financial

criteria required, including rent surplus to cover interest costs from year 1

2019 2020 2021 2022 2023 2024 2025

Total spend 79 127 169 165 103 68 59

Less grant (6) (14) (35) (31) (3) (1) 0

Less sales proceeds (15) (36) (74) (41) (38) (32) (45)

Net expenditure 58 76 60 93 63 35 15

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NEW HOMES STRATEGY BY LOCATION

22

YORKSHIRE HOUSE PRICES REMAIN BUOYANT

-20.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

Annual average house price change

England & Wales

Yorks & Humber

South East

Source – LSL property services plc analysis of Land Registry transactions

2323

HELP TO BUY COMPLETIONS

0

200

400

600

800

1000

1200

1400

Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

2016 2017 2018 2019

Source: monthly completions in NE and Y&H regions managed by Yorkshire Housing

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CORPORATE GOVERNANCE

Lairds Way, Penistone

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SIMPLE CORPORATE STRUCTURE

Yorkshire Housing Ltd.

Registered Society

Charitable status

Registered Provider

Y H Residential Ltd. (known as Space Property)

100% ownedCompany limited by shares

Non-Charitable

Yorkshire Community Property Services Ltd.

100% ownedCompany limited by shares

Non-CharitableCurrently dormant

Yorkshire Housing Finance plc.

100% ownedCompany limited by shares

Non-Charitable

26

EFFECTIVE GOVERNANCE AND CONTROL

Philip Severs

Risk and Assurance Committee

Sue

Hall

Governance

Committee

Keith Holloway

Development Committee

Linda Christon

Customer Services

Committee

Will Lifford

Chair of Yorkshire

Housing Board

Sets the values, aims and strategic objectives

Approves the corporate strategy, including the financial

business plan and budgets

Sets the appetite for risk and decides on strategies and

plans for the future

Monitors the performance of all parts of Yorkshire

Housing through agreed key performance information and

appraisal

Ensures compliance with all regulatory, legal, and

financial requirements

Exercises control of subsidiaries through an Intra-Group

agreement, setting of strategy and appointment of

subsidiary Board members

The Yorkshire Housing Board’s Role

Committee Chairs

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EXPERIENCED EXECUTIVE TEAM

Nick Atkin

Chief Executive

Over 28 years sector experience

David Bolton

Director of Property

Services

Over 30 years

sector experience

Andy GambleDirector of Development

Over 33 years sector experience

Cath Owston

Interim Director of Customer Services

Over 32 years sector experience

Michelle GreggDirector of Business

Transformation

Over 30 years sector experience

Guy MillichampDirector of Finance

Chartered accountant

Over 21 years sector experience

Overview Corporate Governance Business Operations Development Financial Performance Policy Changes Treasury & Funding

28

EFFECTIVE RISK MANAGEMENT

RiskImpact

(1 – 5)

Likelihood

(1 – 5)

Total

(1 – 25)

Statutory compliance breach 4 3 12

Significant reduction in the customer’s ability or willingness

to pay rents4 3 12

Shock in the housing market 4 3 12

Significant changes to the economy that adversely impacts

the financial viability of Yorkshire Housing4 3 12

Failure to retain or recruit the right people and skills 3 4 12

Serious health and safety incident 3 4 12

Cyber attack 3 4 12

Failure to deliver the key benefits from the Today’s

Yorkshire programme3 4 12

Failure to deliver the growth plan 3 3 9

Financial loss from the failure of a significant counterparty 2 4 8

Large scale political change 2 4 8

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FINANCIAL PERFORMANCE

York College

30

SUSTAINABLE GROWTH

2015 2016 2017 2018

Published Published Published Published

Income and expenditure account (£m)

Total turnover 92 96 101 101

Operating surplus 25 28 41 33

Net surplus for the year 13 14 19 16

Statement of financial position (£m)

Fixed assets 778 805 827 849

Net current (liabilities)/assets 17 -8 -4 91

Total assets less current liabilities 795 797 823 940

Long term loans 337 341 352 451

Social housing grant 289 284 282 282

Other creditors 5 3 1 1

Revaluation reserve 29 29 29 29

Revenue reserve 134 140 159 177

Group funds 795 797 823 940

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FINANCIAL RATIOS

0%

5%

10%

15%

20%

25%

30%

35%

40%

2015 2016 2017 2018 2019

Operating margin

0%

20%

40%

60%

80%

100%

2015 2016 2017 2018 2019

SHL income % total turnover

-

0.50

1.00

1.50

2.00

2.50

2015 2016 2017 2018 2019

SHL interest cover

30%

35%

40%

45%

50%

2015 2016 2017 2018 2019

Gearing

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TREASURY AND FUNDING

Aldham View, Barnsley

33

CURRENT DEBT PROFILE

Debt Profile (£m) Available Facilities

Hedging all embeddedFixed Rate Maturity Profile

0

20

40

60

80

100

120

140

160

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£ M

illio

ns

77%

14%

9%

Drawn

Undrawn

LiquidResources

93%

7%

Fixed Var

-

100

200

300

400

500

600

700

2019 2020 2021 2022 2023 2024 2025 2026

Bond Fixed rate Variable rate

34

PROPERTY SECURITY AS AT JULY 2019

Unit Numbers and Values

Type Units MV-STT Ratio MV-STT (net) Units EUV-SH Ratio EUV-SH (net) Total

Houses 1,244 £83m 115% £72m 618 £35m 105% £33m £105m

Flats 858 £45m 115% £40m 341 £15m 105% £14m £54m

Total 2,102 £128m £112m 959 £50m £47m £159m

Funding Facility ValuationAsset Cover

RequirementSurplus Security

Bank loans £392m £549m £470m £78m

Public bond £140m £177m £159m £18m

Unencumbered properties (est) - £176m £176m

Total £532m £883m £272m

35

INVESTOR RELATIONS

We value open relationships

with all our stakeholders

News and annual reports &

updates posted on our website

AGM open to stakeholders

Commit to speaking with

investors at least annually

Standing invite to corporate

events

36

Alison Hadden

• Alison began her housing career 30 years ago and has spent the past eight years as a chief executive.

• She is currently the chair of Stafford and Rural Homes and continues to work as an experienced interim manager

within housing.

• Alison is a member of the Risk & Assurance Committee.

Current board members are as follows

BOARD BIOGRAPHIES

Will Lifford (Chair)

• Will is a chartered accountant and a former UK head of audit with accountants Grant Thornton.

• He has held a number of non-executive roles in the public, charity and not-for-profit sectors. He is currently a Board member

of the Independent Parliamentary Standards Authority.

• Will is a member of the Governance Committee.

Sue Hall (Vice Chair)

• Sue has more than 30 years’ leadership experience in IT transformation, risk management and consultancy.

• She was formally director of information systems and strategy with leading global law firm, Linklaters LLP and is a

non-executive director and Board Chair of the Valuation Office Agency.

• Sue is chair of the Governance Committee.

Linda Christon

• Linda has 30 years experience working in housing, health and social care.

• Formerly a Regional Director of the Commission for Social Care Inspection.

• Linda is Chair of the Customer Services Committee.

Richard Flanagan

• Richard is a Chartered Surveyor with over 25 years experience in commercial development, valuations and development

consultancy

• He currently runs his own property consultancy and is a non-executive director of York Science Park

• Richard is a member of the Development Committee

37

Current board members are as follows (cont’d)

BOARD BIOGRAPHIES (CONT’D)

Keith Holloway

• Keith is a founding director of Adept People and Performance Ltd, a company that provides consultancy services to housing

associations. Formerly a housing association Chief Executive, he has a wide range of skills and experience relevant to the

housing sector.

• Keith is Chair of the Development Committee and a member of the Governance Committee.

Naz Parkar

• Naz has worked in social housing for over 30 years, and joined the Home and Communities Agency as head of investment

before becoming an executive director in 2013.

• He re-joined local government in 2017 as the director for economy and infrastructure and in 2018 moved to the role of

director of growth and housing at Kirklees Council.

• Naz is a member of the Development Committee

David Perry• David is a retired managing director of several Shell UK subsidiary companies. He also spent time leading the European

operation of a foreign exchange brokerage, giving him significant experience in the world of commercial finance. • David is a member of the Customer Service Committee

Philip Severs

• Philip is a chartered accountant. He has substantial public and private sector experience and has held a number of non-executive

roles throughout his career. He was formerly finance director of Sheffield Hallam University and is currently Chairman of

Harrogate Healthcare Facilities Management LTD.

• Philip is chair of the Risk and Assurance Committee.

38

MANAGEMENT BIOGRAPHIES

Current management members are as follows

Nick Atkin • Nick joined Yorkshire Housing as Chief Executive in April 2019. He as a track record of leading organisations

through transformational change, driving performance improvement, with a focus on maximising the untapped potential from businesses and people.

• Nick has previously introduced a fully flexible / remote working approach. He also led the move to 90% of customerled transactions to be delivered through online self-service routes

• He is regularly included in the top 25 most influential people in housing and is a keen advocate of innovation. He uses digital as an enabler to drive fundamental change in how businesses operate.

• He is also a disruptor in the ‘future of work’ debate and has been paperless for 17 years

David Bolton• David has been director of property services since 2008 and is responsible for the delivery of Yorkshire Housing’s property

related services to over 18,000 homes across Yorkshire including Leeds City Council homes.

• He also takes responsibility for health and safety, landlord compliance services and is lead director for Yorkshire Housing’s

home improvement agencies.

• David is a board member of Yorkshire Transformations Ltd and a trustee of East Lancashire Hospitals NHS Trust.

• An alumnus of the University of Central Lancashire, David also support the University Business School in a voluntary

capacity

Andy Gamble

• Andy joined Yorkshire Housing as director of Development in June 2017.

• He has over 30 years’ experience in the affordable housing sector, working with public and private companies. He

previously worked at Accent Group where he led on development and growth since 2005.

• Andy began his career with British Waterways Board, as an assistant mining surveyor.

• He is a chartered surveyor and member of the Chartered Institute of Housing.

39

MANAGEMENT BIOGRAPHIES (CONT’D)

Michelle Gregg

• Michelle leads Yorkshire Housing’s business transformation programme which will ensure the organisation is geared

up to meet the challenges of a changing sector.

• She also has responsibility for HR, learning and development and communications.

• Michelle joined in 2015 from Merseyside and Cheshire-based Plus Dane group where she was interim executive

director of neighbourhoods.

• Her previous roles include deputy chief executive for North West-based Your Housing Group.

Current management members are as follows (cont’d)

Guy Millichamp

• Guy joined the group in 2001 and has held a number of finance roles before becoming director of finance in February

2015.

• As well as being Yorkshire Housing’s chief financial officer, Guy also leads on business planning, governance, risk

and assurance.

• A chartered accountant with a background in the not for profit sector including charities, education and housing.

• Guy is currently a board member at Rochdale Boroughwide Housing.

Cath Owston

• Cath Owston is interim director of customer services at Yorkshire Housing. Her remit includes responsibility for our

neighbourhoods, independent living service and customer contact centre teams.

• Cath joins Yorkshire Housing from Rochdale Boroughwide Housing where she was executive director of customer

and community. Her thirty years in housing include four years at New Charter Housing Trust Group as director of

customer experience and five years at Trafford Trust where she was transformation manager.

• She is also a board member with Bolton at Home and Chair of Starts with you, a social enterprise in Bolton

40

CONCLUSION

A strong, ambitious and well-run association with 16,000 properties, tracing its roots back to 1968

Moody’s A3 credit rating (Baseline credit assessment baa1) and G1/V1 ratings from the RSH

Financially robust with strong and improving performance (not reliant on property sales)

Clear focus on core business, with social housing activities representing 87% of turnover

Well prepared for the impact of Universal Credit & welfare reform

Simple corporate structure

Experienced executive and non-executive teams

Excellent track record of development, adding over 3,000 new homes since 2010

Properties throughout Yorkshire, the largest county in England with a growing & diverse economy

41