S&P Global Ratings has affirmed the A+ rating for Sovereign Housing Association and upgraded its outlook to “stable”.
In a recently published research report, S&P stated: “Sovereign will continue to benefit from strong demand for its properties and deliver its ambitious development plan.”
The report added that the stable outlook reflects a view that Sovereign’s “management strategy to invest in its asset base will support the business’ long-term prospects”.
The report noted that Sovereign has expanded the scope of its business plan, is investing in higher maintenance to improve existing stock, and is using a new home and place standard to achieve its 2050 zero carbon target.
The report read: “Over time, we think the group’s homes will be well positioned to meet future consumer, environmental, and construction regulations, reducing both enterprise and financial risks in the longer term.”
The report acknowledged that COVID-19 has had an impact on development but said that any impact the pandemic has on arrears will be “very moderate compared with [Sovereign’s] peers because the group started the pandemic in a very strong position”.
The S&P report noted that “despite changes at the top executive level over the past two years, we consider that Sovereign’s management has the expertise to deliver”.
Responding to the S&P report, Mark Washer, chief executive of Sovereign, said: “I am very pleased that we have had our A+ rating affirmed and that the outlook has been upgraded as well.
“This reflects the long-term commitment we have made to invest in our homes, to build new homes, and to underpin all that we do with a new home and place standard.
“This demonstrates that a forward-looking and ambitious programme to improve our homes for customers and make all our homes more sustainable is also sound financial planning.”
Washer added: “Sovereign will be going into 2021 in very good financial health.
“As S&P say in their report, we have strong assets and a strong enterprise profile. Whether it’s in our plans for new homes or to improve the lives of our existing customers, this is welcome recognition that we are delivering on our corporate plan.
“This is good news for Sovereign and testament to the hard work of colleagues across the organisation, delivering for our customers in a very challenging year.”
Sovereign manages nearly 60,000 homes and aims to build around 1,900 new homes every year.
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