Operating and Financial Review
Turnover from property sales was £14.2m, a decrease of £10.5m from the previous year’s turnover of £24.7m. This was as a result of delays in practical completions and more challenging market conditions. During the year we recognised an impairment charge of £9.6m at one scheme arising from additional costs following the liquidation of the principal contractor. Elsewhere we were pleased to have the opportunity to convert a scheme in Uxbridge from outright sale to social rent to increase the supply of much-needed affordable homes in the capital, with the strong support of the London Borough of Hillingdon and the Greater London Authority. Our balance sheet remains strong with net assets of £592.3m (based on historic cost of properties) compared with £592.0m in the previous year. We acquired two new care homes during the year on a turnkey freehold basis for a total consideration of £46.9m and invested £74.5m in the construction of new housing properties in a mixture of social and affordable rented and shared ownership tenures. Net debt excluding finance lease obligations was £562.8m at 31 March 2024 (2023: £514.4m), the increase reflecting payments to acquire the two new care homes and ongoing investment in the development programme. We had undrawn committed loan facilities of £144.6m at the same date (2023: £185.6m). Housing occupancy remained strong throughout the year, ending the year at 98.7% consistent with the previous year (2023: 98.7%). Care home occupancy improved by 2.6% to 88.1% (2023: 85.5%, restated to include all Halcyon care homes). Our mature care homes have been operating in line with or ahead of average sector occupancy all year. Impact of the external environment During 2023, the Bank of England base rate continued to increase, peaking at 5.25%, a level at which it has been held since August 2023. Financial markets remained broadly stable and constructive, but the volume of financing issued by the housing sector has been materially lower than in previous years mainly due to the higher cost of funding. In December 2023, Anchor borrowed £25m at competitive rates using two bilateral private placements. The fixed interest rates payable were lower than on drawings from our floating rate revolving credit facility, mitigating some of the cost of increasing rates through the year. However, as 10% (2023: 5%) of our loan book is neither fixed nor hedged and held at variable rates of interest, rising market rates have contributed £2.1m of the increase in interest payable. In turn this has contributed to a reduction in our interest cover ratio which finished the year at 155.3% on an EBITDA MRI, banking covenant basis (2023: 180.2%). We have forward purchased most of our gas and electricity throughout the year, buying at beneficial rates that were significantly lower than budgeted, ensuring that we fulfilled our commitment that no resident purchasing their energy via Anchor will pay more than the equivalent of the government’s Energy Price Guarantee as at October 2022.
12 Anchor Hanover Group Annual Report & Financial Statements 2024 Amortisation, Major Repairs Included), a key liquidity indicator, was £54.4m compared with £46.7m generated in the previous year. fees. Operating surplus was £36.7m (2023: £37.5m) representing an operating margin of 5.8% (2023: 6.8%), with our performance adversely affected by a one-off impairment charge at one of our development schemes. EBITDA MRI (Earnings Before Interest, Tax, Depreciation, HIGHLIGHTS • Housing occupancy remains high at 98.7% with continued lower-than-sector arrears levels of 2.6%. • Care home portfolio is 121 homes following the acquisition of two brand new turnkey homes and the transfer of four care homes through a mutually agreed lease exit and one freehold sale. • £76.3m (2023: £76.0m) invested in improvements to existing properties. • 573 (2023: 82) new units reaching practical completion during the year. • £8.3m of direct and indirect financial support provided to residents to help alleviate the impacts of the cost-of-living crisis. • Successful forward purchasing of gas and electricity resulting in lower costs for residents. • High levels of liquidity maintained with £144.6m (2023: £185.6m) in undrawn loan facilities to fund Business Plan growth. • Gearing remains very low at 28.9% (2023: 28.5%). • Interest cover including capitalised repairs (EBITDA MRI) 155.3% (2023: 180.2%). Along with organisations and households across the country, we have continued to feel the pressure from persistently high inflation, interest rates that have been maintained at their highest level for 16 years and soaring energy bills. The prolonged cost-of-living crisis has continued to impact the lives of residents, colleagues and their wider communities and as a business we are still feeling the long-term effects of the UK’s exit from the European Union, most keenly in our labour supply chains. In this context, the consistency of our corporate strategy and our financial strength and resilience has continued to serve us well. Total revenue for the year ended 31 March 2024, was £628.7m, an increase of 13.2% (£73.2m) on the previous year. The increase in turnover includes £33.6m from a full year of operating the Halcyon care homes acquired in November 2022 compared with £11.9m from five months in the previous year, along with higher service charges reflecting the higher cost of utilities and increases in regulated social housing rents and care home
Made with FlippingBook - PDF hosting