Turnover from social housing lettings – residential care homes was up 17.4% or £42.5m at £286.5m, (2023: £244.0m). This increase includes a first full year of turnover from the 10 Halcyon care homes, together with inflationary increases in care home fees and an increase in occupancy. Occupancy in care homes recovered by a further 2.6% up to 88.1% (2023: 85.5%, restated to include all Halcyon homes) and is expected to improve further in the coming year. Anchor is the registered provider of care to residents in 11 of its housing locations; turnover from this activity totalled £3.4m (2023: £3.4m). Turnover from property sales was £14.2m from the sale of 38 new units, of which 26 were outright sales and 12 were on a shared ownership basis. This is a decline from the prior year when turnover of £24.7m was generated from the sale of 54 units. The reduction in sales was due to a combination of difficult market conditions, continued supply chain pressures impacting on practical completion times, and delays in starting the marketing campaigns at some developments. Sales that were delayed are now projected to complete in the new financial year. Operating surplus Anchor’s operating surplus was £36.7m compared to £37.5m in the prior year, with turnover up from £555.5m to £628.7m and operating costs increasing from £521.0m to £594.4m. The operating surplus for social housing lettings - retirement housing to let was £61.8m (2023: £57.3m). As noted above, turnover was up £39.1m on the prior year, and operating costs increased by £34.7m to £244.4m (2023: £209.7m). This increase is primarily attributable to an increase in gas and electricity costs following the end of the fixed price contract on 31 March 2023. We took the decision not to reenter into fixed price contracts for our energy supplies and opted instead to forward purchase gas and electricity on a flexible basis when market prices were optimal. We estimate that we have saved £24.9m compared with the alternative fixed prices by adopting this strategy. Compared with the budget for the year, we delivered savings of £16.4m and this will result in a reduction in service charges for our housing customers. We will continue to forward purchase gas and electricity in the coming year. Residential care homes made an operating deficit of £7.8m compared with an operating deficit of £12.5m in the prior year. Operating costs totaled £294.4m (2023: £256.5m). The 10 Halcyon care homes acquired in November 2022 generated turnover of £33.6m for the full year and an operating surplus (excluding depreciation and amortisation of goodwill) of £10.7m (£11.9m and £2.5m respectively for the five months in FY23). The first full year of amortisation of goodwill and the depreciation of care home assets arising from the acquisition of these care homes increased operating costs by £5.0m and £2.9m respectively. 2 Strategic Report including Operating and Financial Review
The budget for the year included an efficiencies target of £4m and this was delivered through the careful management of staff vacancies and other, non-staffing related costs. These savings were principally generated from central services, and we will continue to prioritise reductions to our central overhead in the coming year. We are making significant investment in strategic initiatives to drive improvements across Anchor, adapting our operating models to deliver material, long-term savings. During the year, a detailed review of our strategic approach to change management was completed by external consultants and we have used their feedback to develop our tactical plans for delivery. Our programme of change is focused on our service offer to residents and the use of technology as an enabler. It includes the roll out of digital care planning and digital medication administration records across all our care homes, a new Customer Relationship Management system across our housing service, a new approach to the way we procure and deliver our responsive repairs and planned investment, and the installation of high-speed internet connectivity across all our rented housing and care properties. Operating surplus before goodwill amortisation was £45.2m compared to £41.0m in the prior year. Anchor is a not-for-profit organisation and therefore its entire surplus is reinvested in the business for the long-term benefit of the organisation and its residents. Turnover Turnover in the year ending 31 March 2024 was £628.7m, an increase of £73.2m or 13.2% compared with the prior year. Turnover from social housing lettings – retirement housing to let was £306.1m, (2023: £267.0m), an increase of £39.1m or 14.6%. Of this increase, £25.3m relates to service charge income and £12.8m to rental income. Service charge income has been impacted by increases in service chargeable gas and electricity unit costs following the significant increase in commodity prices over the last year. As a provider of supported housing, the Rent Standard permitted a rent increase of up to 11.1% from 1 April 2023 for our eligible housing units. Instead, we took the decision to cap rent increases for existing customers at 7% in line with other general needs providers to alleviate pressure on our residents. Demand for our services was strong and our occupancy ended the year at 98.7% (2023: 98.7%), representing 446 void units (2023: 437 units) out of a portfolio of more than 35,500 units. The value of void losses net of void indemnity income was £5.4m (2023: £3.8m). The average number of days taken to re-let void units over the year was 41 days which is a decrease on the prior year (2023: 45 days). The waiting list for properties remains strong at 18,000, a decrease of 2,000 from last year.
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