Investor Presentation

Peabody Plaistow Hospital, Newham

TCHG St James’ Court, Tunbridge Wells

Peabody Caledonian Point, Greenwich

Disclaimer

The information contained in this investor presentation (the “Presentation”) has been prepared to assist interested parties in making their own evaluation of the Peabody Group and Town and Country Housing Group (the “Groups”) and is believed to be in all material respects accurate, although it has not been independently verified by the Groups and does not purport to be all-inclusive. Neither the Groups nor any of their representative directors, officers, managers, agents, employees or advisors makes any representations or warranty (express or implied) or accepts any responsibility as to or in relation to the accuracy or completeness of the information in this Presentation (and no one is authorised to do so on behalf of any of them) and (save in the case of fraud) any liability in respect of such information or any inaccuracy therein or omission there from is hereby expressly disclaimed in particular if for reasons of commercial confidentiality information on certain matters that might be of relevance to a prospective purchaser has not been included in this Presentation.

No representation or warranty is given as to the achievement or reasonableness of any projections, estimates, prospects or returns contained in this Presentation or any other information. Neither the Groups nor any other person connected to them shall be liable (whether in negligence or otherwise) for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any statement in or omission from this Presentation or any other information and any such liability is expressly disclaimed. This Presentation may include certain statements, estimates and projections prepared and provided by the management of the Groups with respect to its anticipated future performance. Such statements, estimates and projections reflect various assumptions by the Groups' management concerning anticipated results and have been included solely for illustrative purposes. No representations are made as to the accuracy of such statements, estimates or projections or with respect to any other materials herein. Actual results may vary from the projected results contained herein.

By reading this Presentation, you agree to be bound by these limitations.

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Introduction

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Peabody Merchant's Walk, Tower Hamlets

Key messages

A combination of two strong housing associations creating a 65,000-home organisation, believed to be the UK’s 5th largest housing association

A strategy to deliver more and better homes while improving service delivery and lowering cost

Combination allows increased development output by TCHG in Kent and Sussex, following funding restructure

Growth in influence to develop stronger strategic partnerships

Strong corporate governance with experienced management teams

TCHG to remain a separate subsidiary under group-wide back-office and treasury management

Complementary credit strengths; enlarged group has a strong balance sheet with low gearing

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Corporate structure and governance

Shared board and committee membership

Clear management lines of reporting

Wholly controlled subsidiary with Intragroup Funding and Operations Agreement

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TCHG becomes a subsidiary of Peabody

Peabody Trust

TCHG Group

development vehicle

Other subsidiaries

Group Board

TCHG Board: local development and customer services

committees

Group committees: treasury, audit, risk,

remuneration

New Group Structure New Group Board Structure

Town and Country Housing Group

TCHG manages 8,920 homes in the South East (Kent, Sussex and Surrey)

8,769 are social housing units and 151 are market-rent units

One of the first stock transfers in 1992 (from Tunbridge Wells Borough Council), over half the current stock was built by TCHG

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Housing association engaged in community building

The Group consists of six companies…

Registered Provider and ultimate parent, acting as Group’s central administration hub TCHG

(Dormant) Charity arm of the Group, activity now takes place in TCHG TCHG Foundation

The Group’s vehicle for regeneration and housing development Monson Homes

Financing vehicle TCHG Capital TCHG Living (Dormant) Registered Provider

Joint venture company providing repairs and maintenance for the Group Countrywise Repairs

Transaction rationale

Utilising the strength of the Peabody brand to unlock development opportunities

Enhances TCHG’s capacity to deliver without impacting gearing, compared to developing as a standalone entity

Helps meet political pressure to develop

Being part of an organisation that has a strong, distinctive and credible voice in the sector, but maintaining TCHG’s local presence

Provides TCHG with a competitive edge against large and regional competitors operating in its geography

Peabody’s and TCHG’s aligned outlook and aims will pave the way for strong delivery of homes across London and the South East

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TCHG Lakewood, Tunbridge

Wells

Peabody Blackfriars Estate,

Southwark

Development proposition

Peabody existing development plans unchanged at 2,500 per annum

From a strong track record of realising current targets, TCHG to gradually increase development to 800 homes per annum from recent 300 homes per annum

Similar tenure profile to Peabody’s programme

1/3 social, 1/3 market sale, 1/3 shared ownership

Proven demand in targeted areas

Sharing knowledge / best practice whilst maintaining local market presence

Group-wide governance oversight

Consistent risk appetite

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Joining Peabody enables TCHG to more than double future development

TCHG Lakewood, Tunbridge

Wells

Existing integration delivery

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TCHG merger not to affect on-going integration plan

Merger Business Case; Inaugural business Plan; Group

Strategy 2018-201

Landlord amalgamation & Hive Down

Rationalisation of group structures

Staff restructures

People First culture programme

Performance management

framework New Terms and Conditions

Infrastructure and Networks

Single website, Intranet, Branding and Communications

Early Office Moves Accommodation Strategy

Single Call Centre telephony

Single Asset Management

System Single Financial Platform

CRM roll out and Contact Centre integration

Single Development

platforms

Single Housing Management

System

Integration of FM merger complete by January 2019

Existing

integration

plan

Peabody Family Mosaic Integration Update Bringing in

new

subsidiary

Integration of TCHG back office functions planned for 12 months from April 2019

Merger timetable

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October/

November

November

December

March

April

Board decisions

5th November – plans for TCHG to join Peabody announced (see RNS)

Resident consultation

Consents finalised

1st April – Completion

January 1st Designate Group Board Meeting expected

February

TCHG EGM and shareholder approval1

Refinement of financial plan

Resident consultation feedback

2019

2018

Notes

1 TCHG shareholders are the board members

Financials

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TCHG Penns Yard, Pembury

Historic financial highlights

31 March 2018 Peabody TCHG Total

Residential portfolio size 55,717 8,920 64,637

Moody’s / S&P rating A3 A+

Balance sheet reserves £2.7 bn £389 m £3.1 bn

Debt per unit £35,000 £39,000 £35,000

Gearing 31% 48%

Unsecured properties 17,000 1,407 18,407

Employees 3,310 142 3,452

Turnover £609 m £60 m £669 m

Turnover excluding sales £425 m £53 m £478 m

Operating margin 35% 45% 37%

Net surplus £175 m £18 m £193 m

Surplus before sales

(including existing properties)

£75 m £10 m £85 m

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Peabody Fish Island Village, Tower Hamlets

Peabody Caledonian Point, Greenwich

TCHG Lakewood Phase 1, Tunbridge Wells

Conclusion

Conclusion

A combination of two strong housing associations creating a 65,000-home organisation

Growth in influence to develop stronger strategic partnerships

Strong corporate governance with experienced management teams

Alignment of funding principles to ensure efficient and effective capital structure

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Peabody St John’s Hill, Wandsworth

TCHG MacDonald Court, Tunbridge Wells