Anchor's turnover rises by 7.4% while operating margin declines

In June, the landlord was downgraded by the regulator to non-compliant for governance, and S&P later revised Anchor’s credit rating from A+ (stable) to A+ (negative).

In its half-year trading update, Anchor said it incurred one-off costs of £500,000 as a result of the downgrade. These costs were part of its work on a regulatory compliance improvement plan, which was agreed with the regulator in October.

Turnover was £357.1m as of the end of September this year, up from £332.5m last year, which was driven by inflationary increases to rents, service charges and care fees, together with increased property sales volumes.

Property sales rose from 23 last year to 40 in the six months to the end of September this year. However, there was a net deficit from property sales due to the cost of holding unsold stock.

“Demand for recently built stock remains good, while we are facing challenges on some larger legacy developments,” the trading update said.

Anchor increased investment in developing new homes in the first half of the year, from £46.7m last year to £66.2m, and it aims to deliver an average of 500 new homes per year over a rolling 10-year period.

The trading update also revealed increased levels of investment in existing homes, with capitalised major repairs costs rising to £30.7m from £24.8m in the same period last year.

This investment drove an 18% decrease in the landlord’s EBITDA MRI, from £39.9m as of September 2024 to £32.7m in this latest update.

Anchor completed 30 retrofits of its properties, bringing its total number of homes receiving energy efficiency upgrades to 324. It used £2.2m of grant funding from the Social Housing Decarbonisation Funding wave 2.1 to complete this work.

Ken Youngman, Anchor’s interim chief financial officer, said in the trading update that the landlord’s “underlying financial performance remains stable” while noting the decrease in operating margin.

He said: “The corporate plan remains unchanged and continues to focus on the four key themes – the ‘Four Mores’ – of being more efficient: delivering more and better homes, creating more opportunities for colleagues, and being more influential on behalf of older people.

“The board is pleased to present these half-year results and is grateful to the many partners and stakeholders who work with us for the benefit of our residents.”