we consider how changes in one risk theme might also have impacts on other key risks. This is supported by our protocols for stress testing which consider the effects of risks impacting in tandem.
Principal risks and uncertainties The principal risks and uncertainties facing Anchor are noted below. Although they are listed separately, our approach to actively managing these risks ensures that
PRINCIPAL RISKS AND UNCERTAINTIES
We maintain a prudent liquidity policy and a conservative approach to financial planning and stress testing, building in multi-variate considerations. This includes the use of leading indicators linked to our golden rules that provide an early warning signal of financial stress occurring, enabling us to respond with the appropriate risk mitigations. We continually monitor market movements and benefit from the support of retained treasury advisors. We work with our suppliers to monitor risks related to the supply of goods and services to limit any potential disruption to the services that we deliver. There are several risks in the external environment that are contributing to significant challenges for all providers. Stemming from macroeconomic impacts on the global economy linked to the war in Ukraine, higher costs of fuel and energy have contributed to elevated inflation levels in the UK. These factors have contributed to the cost-of-living crisis which we have continued to actively manage as a key area of risk, with focus on maintaining service delivery, managing and anticipating financial impacts, and monitoring the potential negative impacts of the conditions on our customers and colleagues. We seek to manage sales risk through careful targeting of buyers, including those who own their own homes with no mortgage, who do not require a mortgage to acquire a home of the sort we offer, or have property assets in the range of £100,000 to £300,000. For the year ended 31 March 2024, sales of residential property generated £14.2m of the Group’s turnover, consistent with our internal ‘golden rule’ that annual sales turnover from sales of residential property should not exceed 20% of total annual turnover, thus ensuring that the underlying business does not place reliance on property proceeds for its ongoing viability. The development of residential properties for market sale is subject to varying degrees of market and development risks, including demand and pricing risks. We seek to manage development risks by identifying priority areas for development activity, being areas where we have an existing presence, infrastructure, and local relationships. Anchor undertakes diversified residential property investment activities in the form of development construction, outright sale, and non-social housing lettings. We use wholly owned subsidiaries to assist with the delivery of investment activities. Profits can often, but not always, be gift-aided to Anchor subject to certain conditions being met as a means of reinvesting capital for the provision of affordable and social housing.
Macroeconomic conditions
Investment and development sales risks in residential properties
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