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Large housing association Sanctuary has reported a drop in its post-tax surplus of nearly a third after a year of rent reductions, increased staff costs and the COVID-19 pandemic.
The 102,000-home landlord’s surplus after tax fell from £77.5m in 2018/19 to £53.2m in 2019/20, a reduction of 31%.
In the group’s annual report, Sanctuary chair Andrew Manning-Cox and chief executive Craig Moule said: “As a result of the COVID-19 pandemic and the consequent government-ordered lockdown of the UK from 23 March 2020, the unprecedented last few months have been the most challenging in our 50-year history.”
Despite these difficulties, the association said it has achieved a “strong financial performance”, citing increased revenue from £735.4m to £763m.
Its operating surplus of £186.2m is down from £203.7m in 2018/19, but its underlying operating surplus rose slightly from £181m to £182.6m, which the group said was a “good result particularly in the context of a further year of rent reductions, compliance expenditure, increased staff costs and an impact from COVID-19 in the final part of the year”.
Sanctuary noted that it repaid a tranche of legacy debt during the year, which will lower the interest cost to the business in the long term but produced £8.6m in loan break costs.
Homes completed fell by 35% from 941 in 2018/19 to 604 in 2019/20. But the group said that it remains committed to increasing housing supply and that 5,642 properties were on site and in development at the reporting date.
Ed Lunt, group finance director at Sanctuary, said: “Overall these results demonstrate the group’s continued financial strength and leave us well positioned to face the current short-term challenges and volatility presented by COVID-19 while still moving towards our longer-term strategic aims.”
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