Surplus up at Sanctuary as starts and completions fall

Sales of 131 shared ownership homes and 153 open market sale homes generated revenue of £71m, down from £90m the previous year.

Sanctuary said its underlying operating surplus margin was 19%, broadly in line with 19.2% the previous year. Its margin excluding development sales improved slightly to 20.3%.

However, Sanctuary said higher net interest costs offset its improved operating performance, with underlying surplus falling from £48m to £46m.

The group expects to report an overall surplus of around £62m, compared with a deficit of £30m the previous year.

Its update to the stock market explained that this reflected stable underlying performance and several non-core items.

These included a gain on the disposal of a shared ownership portfolio, fair value movements on financial instruments, valuation adjustments for student investment property and losses linked to the cessation of pension arrangements.

Sanctuary invested £127m in existing homes during the year, compared with £131m the previous year. The group’s EBITDA MRI interest cover remained flat at 110.2%, while gearing increased to 53%.

At the end of March, Sanctuary had cash and undrawn facilities of £453m, down from £516m a year earlier, which it said provided 23 months of financing against committed expenditure.

Ed Lunt, chief financial officer at Sanctuary, said: “2026 was another solid year for the group, with resilient operational and financial performance underpinned by the strength of Sanctuary’s diversified operating model, the benefits of scale and disciplined financial management.

“We have enhanced our repairs performance, delivering service improvements for our customers while continuing high levels of reinvestment in our homes.

“We enter the new financial year in robust financial health, capable of withstanding economic turbulence and committed to growing our positive social impact.”

Customer satisfaction with repairs remained flat at 74%, while vacant stock increased slightly to 2.6%. Rent arrears also rose from 3.04% to 3.12%.