impact that they have on Anchor’s turnover, operating costs and cash flow, including assumptions for the estimated costs of meeting minimum EPC obligations by 2030, and net zero carbon commitments by 2050. The Board remains assured of the long-term financial outlook. The Group adopts a multivariate approach to stress testing to assess the vulnerability of the business to a wide range of downside risk. The Board considered analysis based on: • Sensitivity – the impact of percentage movements in income and costs to break point. • Stress – the impact of real world individual and multi variate scenarios and our response to them. • Capacity – our ability to manage stresses and continue to deliver our strategic plan. The stress scenarios considered included but were not limited to: wage inflation exceeding income growth, an adverse housing market, the application of clause 18(3) of the Care Act, enforcement of an evacuation policy in housing locations, issues arising from a cost of living crisis, changes to the rent formula and changes to interest rates. The performance against these scenarios was closely reviewed by the Executive and Board. Long term liquidity forecasts are monitored by the Executive on a monthly basis and reported regularly to the Board, ensuring that the Group has sufficient funds available to meet its short-term operational needs as well as support its strategic objectives. The Regulator of Social Housing carried out an In-depth Assessment of our financial position, business plans and risk control framework in the spring of 2023 and reaffirmed our governance and financial viability ratings at G1, V1, the highest available ratings. Having reviewed the performance of the long-term financial plan, its resilience under stressed conditions and the recovery actions available to mitigate downside risk, coupled with the Group’s strong liquidity position and its regulatory ratings, the Board is assured that the organisation retains the financial strength it requires to maintain long term viability. Value for money Our commitment to value for money is an integral part of our strategy, articulated as the More Efficient within our ‘Four Mores’. We want to achieve the best possible return from every pound that we spend, and as such we don’t just look at the cost of delivering a service to our residents, but also the quality of resident outcomes. We periodically review our compliance with the Value for Money Standard published by the Regulator of 2 Strategic Report including Operating and Financial Review
Tax and legal structure Anchor is subject to a number of tax regimes including corporation tax, indirect taxes (such as VAT, landfill tax, and climate change levy), employee taxes (such as PAYE, CIS), and stamp taxes. Anchor Hanover Group and all its subsidiaries are domiciled and operate within the UK. To support our ongoing objectives to reduce risk and increase financial resilience, maximise capacity and flexibility, and optimise our borrowing structure, we keep our tax and legal structure under review. Following the acquisition of the Halcyon Care Home Group in November 2022 and Anchor (Skipton) Limited in June 2023, we are undergoing a restructuring and simplification process to meet these objectives. As at 31 March 2024, Anchor has two non-charitable trading subsidiary companies: Anchor 2020 Limited procures design and construction services for the Group and manages the professional fees on new development projects, and Anchor Lifestyle Developments Limited operates non-charitable activities, principally the development of independent living properties for sale. Additionally, Anchor has 10 non-charitable dormant subsidiary companies, nine of which are members of the acquired Halcyon Care Homes Group. An application for the dissolution of all nine entities was submitted to Companies House in March 2024 and eight were dissolved on 18 June 2024. The remaining subsidiary, Anchor (Skipton) Limited, was acquired in June 2023 and is being retained in the structure as a dormant entity. Surpluses from Group subsidiaries are gift-aided under a deed of covenant to Anchor Hanover Group, for the benefit of its charitable activities. Viability report Our Board has assessed the viability of the Group through the long-term financial plan, with a particular focus over the next five years which represents the period over which development and growth activities can reasonably be forecast, combined with the impact of the prevailing macroeconomic volatility. This viability assessment is supported by the Group’s liquidity forecasts, the long-term financial plan and consideration of the Group’s key risks. The Board review of the long- term plan is carried out at least twice each year and the plan forms the basis of the 30-year Financial Forecast Return that is submitted to the Regulator of Social Housing annually. The plan sets out how the Group manages its resources to ensure long-term financial sustainability and the safeguarding of its assets. The Board has considered the assumptions for the key drivers of the business and the
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