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Bromford sees 23% drop in surplus
Bromford has reported a post-tax surplus fall of almost a quarter for the year to 31 March 2020.
The association, which owns and manages 44,000 homes across the Midlands and South West of England, saw its surplus fall 23% from £69m in 2018/19 to £53m in 2019/20.
Bromford noted that the 2018/19 final year surplus included a £21m one-off adjustment from its acquisition of Severn Vale Housing completed in January 2019.
The landlord’s pre-tax operating surplus including asset sales for 2019/20 was £99m, up from £83m in 2018/19.
Bromford’s turnover grew 5% from £257m last year to £270m in 2019/20, 81% of which was from core social housing turnover. This represents a slight rise in proportion of turnover from social housing, up from 78% in 2018/19.
Its operating margin on social housing lettings dropped from 35% in 2019 to 33% in 2020, while the margin including asset sales rose from 33% to 37%.
During the year, the housing association disposed of its entire student accommodation portfolio and offloaded housing stock in two council areas as part of an ongoing rationalisation strategy.
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Bromford completed 1,027 new homes in the year, 969 were for affordable housing tenures and 58 for open market sale. Of the 969 homes, 310 were for social rent, 341 for affordable rent and 318 for shared ownership.
Before the coronavirus crisis, it had expected to complete 1,300 new homes in 2020/21.
Robert Nettleton, chief executive at Bromford, said: “Our social housing business continues to thrive, contributing over 80% of our turnover. And during the year we disposed of our entire student portfolio.
“We have delivered over 1,000 new homes and have continued to de-risk the plan by further increasing our focus on affordable housing.”
Mr Nettleton said the pandemic is likely to have an impact on development, sales and arrears but that Bromford is well positioned to deal with the challenges due to an agile business plan.
“We have also undertaken significant treasury activity again this year; maintaining strong levels of liquidity, in excess of half a billion pounds, through additional facilities, including our inaugural [environmental, social and governance] ESG-linked loan and a new deferred private placement that we are due to draw in August 2020,” he added.
Bromford is rated as A2 (stable) by credit agency Moody’s and A+ (stable) by Standard & Poor’s.
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