Association records £8.8m surplus

Alliance Homes saw its surplus fall marginally from £10m in 2014/15 to £8.8m in 2015/16 in its annual financial statements, which were published last week.

The organisation, which operates in the West of England, turned over just over £40m in the year with an operating surplus – turnover minus day-to-day costs – of £10.25m.

This created an operating margin of 25.6%, roughly in line with the sector average.

It generated £32.6m of this turnover from social housing lettings, with £2.8m raised from supported housing contracts and £1.1m from its generation of renewable electricity.

In the notes to its accounts, it said its care and support contacts make a loss of £1.2m once overheads are considered.

However, it said the board accepts this position during the current “expansion phase” and aims to make the contracts cost neutral by 2018.

Its corporate plan sets a target to develop 284 homes by 2020, with 42 purchased through Section 106 agreements in 2015/16. It has also been working on a 65-bed dementia care scheme.

A business transformation programme designed at stripping cost out of the business has so far directly delivered savings of £150,000 according to the accounts.

It said it needs to make £3.1m of savings to achieve the savings required to accommodate the 1% rent cut over the next four years.

Simon Sweetinburgh, chair of the housing association, said: “Last year saw the organisation, together with our customers and other community service providers, challenged like never before, with a new government introducing a number of welfare reforms, rent controls and Right to Buy initiatives.  

“This meant that we had to revisit our business plan and thanks to a number of ongoing efficiency measures we have managed to limit any significant impact on our services.”