bathrooms representing 23% of the overall planned works investment (2023: 743 kitchens and 786 bathrooms). As part of the Anchor-wide change programme, we have begun to transform the way we deliver repairs and planned investment. From spring 2025, we will launch a new technology platform that supports a more efficient end-to-end process for residents, colleagues and suppliers. Following extensive resident engagement and consultation, we will also go live with new contractor appointments for the delivery of repairs and planned investment works across our eight geographical regions. Our investment plans are informed by making best use of intelligence from stock condition surveys, strategic portfolio reviews, our ‘Don’t walk by’ surveys and other onsite engagement with colleagues, residents and contractors, helping us to ensure we deliver value for money services. We have undertaken an accelerated programme to update our stock condition data. As at 31 March 2024, more than 80% of our stock condition data was less than two years old. This physical asset data enables us to plan investment in our property portfolio with more certainty compared with our historic lifecycle approach. As such our approach to preparing the Asset Investment Plan for future years is changing, enabling us to more confidently prioritise our property investment. Our Environmental Sustainability and Net Zero Carbon Strategy has been refreshed and sets out our climate commitments to ensure all our properties are at Energy Performance Certificate (EPC) level C or above and that we will be net zero ready in our business operations by 2030, with a further commitment to reach net zero across all carbon scopes, including our supply chain, by 2050.
Despite the lower property sales during the year, turnover and contribution from new developments that were open or opened during the year were in line with expectations for both price and volume. Delays in construction completions influenced largely by the prevailing economic conditions meant that some sales expected in the year did not materialise and are now expected in 2025. During the year we undertook a review of the activities of our development subsidiary, Anchor Lifestyle Developments Limited (ALDL), whose principal purpose is to develop retirement properties for sale. Delays to sales stemming from a number of factors, including development delays during and post-COVID and historic contractor and subcontractor failures, have increased the intragroup interest accruing on ALDL’s stock balances at a time of high prevailing interest rates. We have therefore taken a number of steps to stabilise the financial position of ALDL. Alongside the intragroup sale and tenure conversion of Atlas Lodge, Anchor (the Parent, the Association) entered into a partial debt for equity swap with ALDL. ALDL issued two shares to the Parent for a consideration of £31.7m which was subsequently offset against the intragroup loan, reducing the outstanding balance and mitigating future interest charges. The Parent’s aggregate investment in ALDL has been impaired by £15.5m and this write down has been reported as a financing charge within interest payable in the Association. Our programme of investment in existing properties delivered 715 planned works jobs totalling £29.4m (2023: 940 planned works jobs totalling £39.2m), the majority (80%) of which were capital in nature, including 552 kitchens and 507
A summary of Anchor’s financial results over the past five years from all its activities is set out below:
YEAR ENDING 31 MARCH
2024 Total £m
2023 Total £m
2022 Total £m
2021 Total £m
2020 Total £m
628.7
555.5
526.2
528.2
522.2
Turnover
Operating surplus before exceptional costs and goodwill amortisation Operating margin before exceptional costs and goodwill amortisation Exceptional costs 1 Goodwill amortisation Operating surplus Surplus / (deficit) for the year Capitalised Major Repairs
45.2
41.0
53.8
47.9
59.3
7.2%
7.4%
10.2%
9.1%
11.3%
–
–
(1.8)
(1.6)
– –
(8.5) 36.7 (45.5) 54.4 1.1
(3.5) 37.5 12.2 (47.1) 46.7
–
–
52.0 24.4
46.3
59.3 34.1
(12.0) 2 (36.4)
(37.2) 64.8
(57.1)
EBITDA MRI 3 43.9 1 Exceptional costs in 2021 and 2022 relate to costs associated with the group restructure and refinancing which spanned two financial years and is now complete. ²After £40.3m break costs. ³EBITDA MRI is calculated as operating surplus before depreciation, impairment of housing properties, amortisation of goodwill and amortisation of government grants, and deducting capitalised works to existing housing properties. 56.2
14 Anchor Hanover Group Annual Report & Financial Statements 2024
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