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Sanctuary’s surplus drops 8% following bumper year of one-off sales
Sanctuary Housing Association saw its surplus drop by 8% in 2019/20 after a series of large one-off asset sales in 2018/19, the group’s audited results show.
The 102,000-home association saw it’s operating surplus slashed from £203.7m in 2018/19 to £186.2m in 2019/20.
But the group noted that this fall can be attributed to one-off restructuring costs and higher one-off strategic fixed-asset sales in the prior year and recorded an underlying operating surplus – operating surplus before restructuring and other gains and losses – of £182.6m, up from £181m the year before.
In 2018/19, Sanctuary saw three “major one-off fixed-asset sales in London” – sales which were not from its development programme.
The association said that while it saw a lower underlying operating surplus margin of 23.9%, down from 24.6%, it said this was still a “positive result” when accounting for a further year of rent reductions, compliance expenditure, increased staff costs and the impact of COVID-19.
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Sanctuary said it remains in a “strong” position to deal with short-term economic challenges with a growth in revenue from £735.4m to £763m and cash generated from operating activities reaching £244.2m, up from £215.2m the year before.
The landlord said its “solid financial performance” is built on its successful operations, including rent arrears falling from 3.8% to 3.6%, void losses remaining at 1.1%, and sales of new homes jumping by more than a third from 150 to 203.
Ed Lunt, group finance director at Sanctuary, said: “Our financial results have been delivered through a strong operational performance, reflecting the dedication of our people and the economic benefits of our national and diversified footprint.
“We remain in a strong position to face short-term challenges while continuing to deliver our long-term strategic objectives of investing in homes and providing housing and care to those in need.”
Sanctuary became one of the first housing associations to brave the debt capital markets after the coronavirus pandemic took hold, by issuing a £350m bond in April.
Update 12:15pm 13/07: Correction to Sanctuary’s underlying operating surplus. It previously stated the underlying operating surplus was £186.2m. It is £182.6m.
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