Bromford’s surplus drops after year of acquisitions
Bromford Housing Group has reported a drop in the amount of money it has to invest in its stock after a year of acquisition activity.
In a trading update to the market ahead of its full results, the housing association said surplus after tax for the year to the end of March 2019 was £56m, down from £64m a year previously.
Bromford owns and manages almost 43,000 homes across central and South West England, and last year made a turnover of £257m, slightly higher than the previous year which was £221m. Its core social housing renting business contributed 76% of the total turnover, down from 85% the previous year.
Bromford made two major acquisitions in the 12-month period: Merlin Housing Society became a subsidiary of Bromford in July last year, while Severn Vale Housing Society joined the group in January.
Lee Gibson, executive director of finance at Bromford, said: “It has been a busy and successful year for the Bromford Housing Group.
“Merlin and Severn Vale are now fully integrated into the group and we are pleased to now deliver the Bromford proposition to over 40,000 households. We are proud of our customer advocacy results which remain high at 89%.”
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He said that the group had outperformed its budget in a number of key areas, including turnover, operating surplus and overall margin.
“The operating surplus has reduced slightly year-on-year, reflecting the ongoing investment we are making in our business transformation programme and neighbourhood coaching model, which will ultimately drive an improved customer experience and longer-term operational efficiencies and financial savings,” he said.
Its operating margin on social housing lettings was 35%, down from 40% last year, while its overall operating margin including asset sales was 33%, down from 40%.
Mr Gibson said that the company had “refreshed” its ‘new homes plan’ and is now targeting around 13,000 new homes by 2028, with a greater focus on social and affordable homes than in the previous plan.
In the 12 months to the end of March, the company delivered more than 1,200 homes and was appointed as one of Homes England’s strategic partners with a grant award of £66m.
Bromford also raised more than £500m of new funding in the year, including its debut public bond worth £300m.
Imran Mubeen, head of treasury at the landlord, said: “The group’s low leverage with significant headroom against key funding covenants and the strength of our financial performance present effective capacity for future borrowings.
“We are delighted to have maintained our leading dual sector credit ratings following the recent mergers and remain committed to maintain two credit ratings moving forwards.”
