Inflationary pressures and economic turbulence continued to impact on the cost of living for individuals during the year. These pressures were no different for Anchor and impacted costs such as construction and repairs and maintenance. Our scale and experienced management team position us well to manage these challenges. Just over 10 million people over the age of 65 currently live in England. This is expected to increase by another 4 million within the next 10 years. We are committed to increasing the number of homes we provide through development and care home acquisition. Through our development programme, we have a significant pipeline and anticipate delivering an average of at least 500 homes a year over a rolling 10-year period. This is in addition to increasing the number of homes we provide for people in residential care. During the year, we achieved practical completion for a total of 573 new homes at nine locations across England. Significant growth in care has been achieved through the acquisition of 14 new care homes (951 beds) since November 2022, two of which opened in the year. The Mill House, in Skipton, provides residential and dementia care for up to 102 residents while Marsh Farm Manor, Royal Wootton Bassett, serves up to 66 residents. We now own or operate 121 care homes. Anchor's reputation for providing high quality services, coupled with strong underlying demand means occupancy is within 1.0% of pre-pandemic levels. At the date of this report, occupancy levels were 98.7% in our rented housing and 88.1% in our care homes. Enhancing residents’ lives Residents’ voices are crucial in influencing how we work across all our services. We work hard to ensure the voices of residents, and their loved ones, shape how we work and the services we provide. Members of our Residents’ Council, Scrutiny Panel and the various other residents’ groups – including the Residents’ Voice Panel - provide hugely important input into what we do and how we do it. Residents’ concerns about climate change also led to the formation of a new group - the Residents’ Environmental Forum. This forum focuses on addressing environmental issues within our communities and has a direct link to the Residents’ Council, helping inform Anchor’s environmental strategy. Our residents’ views also informed our work with the think tank Demos on the Platinum Pound report about the economic benefits of supporting older people to remain in or return to the workforce. We commissioned the report after residents identified the topic as one with a significant impact for older people. Both Conservative and Labour politicians expressed strong interest in the research, and we continue to urge politicians to do more to support people to contribute in both paid roles and through volunteering in later life. With our existing regional repairs contracts ending in 2025, we have been working with housing residents to help inform our Chair and Chief Executive’s Statement A robust financial position, strong governance and a commitment to driving value for money for our residents mean we are well placed to support continued demand for high quality housing and care. 4 Anchor Hanover Group Annual Report & Financial Statements 2024
future approach. At the same time, our ‘Don’t walk by’ surveys are supporting colleagues to work together with residents to understand and prioritise what matters most to them at individual locations. This dual approach will help us ensure that the services we deliver are good quality and good value for money. You will read more about our Be Wise financial inclusion service and Resident Support Fund in the Operating and Financial Review. The sector is rightly seeing increased legislation and regulation to safeguard residents' interests and safety. This includes the introduction of updated Consumer Standards, Tenant Satisfaction Measures and growing legislation around building safety. A commitment to co-development with residents, coupled with robust governance meant we were well-positioned for this and future changes. You will read more about how we perform against the new Tenant Satisfaction Measures in the Operating and Financial Review. Supporting colleagues In a sector facing high staff turnover and continued recruitment challenges in some areas, we continue to differentiate ourselves positively as an employer. We have maintained our membership of the Living Wage Foundation paying at least the real living wage, as well as maintaining appropriate differentials for more senior roles. We also built on a comprehensive range of benefits for colleagues. This included introducing Help@Hand, which offers colleagues 24/7 access to remote GP appointments. We also extended free eye tests to all colleagues regardless of whether they use a VDU, particularly benefitting our care colleagues. Building on previous years’ work on diversity and inclusion, Anchor was accredited during the year as a Menopause Friendly employer. The accreditation from Menopause in the Workplace was given in recognition of Anchor's commitment to inclusive practices and supporting colleagues experiencing perimenopause and menopause. Our support for colleagues’ wellbeing is clearly valued, as evidenced by the fact that Anchor was included in Indeed’s Better Work Awards as one of the top 10 companies for work wellbeing in the UK. Financial results Turnover for the year to 31 March 2024 was £628.7m, an increase of 13.2% on the previous year. This in part reflects the growth in our care homes business along with increased rents and higher service charges from our rented housing. The latter reflects the higher cost of utilities. We received lower proceeds from property sales in the year arising from a combination of delays in practical completions and more challenging market conditions, and we recognised an impairment charge of £9.6m at one scheme where the previous contractor had gone into liquidation. This, alongside the impact of rising cost inflation in the year, had a dampening effect on our operating surplus which at £36.7m was £0.8m lower than the previous year. Our operating margin was 5.8% compared with 6.8% in 2023 and we recorded EBITDA MRI interest cover of 155.3% (2023: 180.2%). EBITDA MRI is defined within the table 'A summary of Anchor’s financial results over the past five years from all its activities' on page 14. Our balance sheet remains strong with total net assets at 31 March 2024 of £592.3m and a low level of gearing at 28.9% (2023: 28.5%). We continue to maintain high levels of liquidity to support our Business Plan growth, with £144.6m (2023: £185.6m) of undrawn facilities at the year-end. We were pleased that, in March, S&P Global Ratings affirmed an A+ stable long-term issuer credit rating for Anchor. Anchor also
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