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Moody's rating - 23 February 2024

Moody’s affirmed the A2 long-term issuer rating of Jigsaw Homes Group Limited (Jigsaw) and the A2 senior secured debt rating of Jigsaw Funding plc. Jigsaw’s Baseline Credit Assessment (BCA) has also been affirmed at a3.

The outlooks for both changed to stable from negative, reflecting Moody’s expectation that Jigsaw’s operating performance will strengthen relative to results recorded during 2023.

Due to the slower debt growth than previously anticipated, Moody’s expects Jigsaw’s gearing metrics will remain in line with the A2-rated peer median at 49% over fiscal years 2024-26. Capital spending is lower than planned, as Jigsaw outperformed its prudent forecast.

Jigsaw plans to build 4,000 units in five years by fiscal 2026 and will have delivered half of those by the end of fiscal 2024.  Higher grants and cash receipts than planned in fiscal 2024, helped limit debt growth.

Jigsaw’s operating performance will recover from its fiscal 2023 dip as it benefits from additional rental income. Moody’s expects Jigsaw’s operating margin to average 27% over the next three years, up from 21% in fiscal 2023. Jigsaw expects to deliver over 900 new units by March 2024, compared to 701 units in fiscal 2023, which will boost its income. In addition, similarly to peers, Jigsaw will benefit from rent increases beginning April 2024, as well as from the gradual decrease in inflation.

You can read the update and full report using the links below:

Moody’s credit rating update 23 February 2024 – Jigsaw Homes Group Limited >>

Moody’s credit opinion 29 February 2024 – Jigsaw Homes Group Limited >>

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