Source - RNS
RNS Number : 7893J
Home Group Ld
14 September 2016

Home Group Limited


Results for the Year Ended 31 March 2016


Home Group Limited today announced its results for the year ended 31 March 2016.


Surplus for the Year


The Board reports a surplus for the year of £44.2 million (2015: £38.6 million). 


Chairman's Report


In his Chairman's report, Bob Davies said: -


I have pleasure in introducing the financial statements for the year to 31 March 2016, outlining our continued progress over the past year.


Home Group, a social enterprise and charity with a turnover of some £350 million, is one of the UK's largest providers of high quality housing and support services operating across over 250 local authority areas.


The primary way in which we support our customers is through the provision of high-quality affordable homes. We house over 120,000 people across England, Scotland and Wales in over 53,000 properties. This includes accommodation-based support for customers with mental and physical health issues. In total, we work with almost 30,000 vulnerable people each year in our supported housing, justice and health services. As we celebrate our 80th birthday this year, it is worth reflecting on all the people we have supported over the years.


In the year to 31 March 2016, we delivered strong financial results with an operating surplus of £84.7 million, a 9.8% increase on the prior year. As in previous years, this surplus will be reinvested in improving our existing housing stock, building more homes and meeting the wide-ranging needs of our customers. Our total rental income in the year to 31 March 2016 was £256 million. From this, we invested £91 million on maintaining and improving our customers' homes. We have continued to improve our service delivery and have exceeded our customer and client satisfaction targets, achieving 93% and 95% respectively.


We are also one of the UK's biggest developing housing associations. Last year, we built 612 new homes for rent and ownership. The government have set out their ambition to see one million new homes built by 2020. Home Group is committed to playing its part in achieving this and our business plan projects that we will build a total of over 6,300 new homes over this period.


In doing this, we would continue to diversify our property development portfolio providing homes for families across a range of needs, incomes and demographics, with an increasing proportion of our developments for outright sale. The profits generated by these developments are then reinvested in the construction of new social housing stock.


The Care and Support part of the business continues to face funding pressures as we await the outcome of the Supported Housing review following the extension of the Local Housing Allowance cap to all social housing. The extension of the cap to social housing properties has the potential to have a significant impact on the viability of some of our supported housing services. We welcome the government's implementation of a one-year delay in the introduction of the cap for supported housing and their efforts to understand better the issues of funding supported accommodation. We are actively engaging with government and key stakeholders to demonstrate the importance of having a strong and viable care and support sector. This is not only important for individual clients but also generates long-term savings for the taxpayer. At the same time, we are working with a range of partners to try to develop alternative approaches and funding models to address this critical issue.


Over the past year, we have seen wide-ranging changes to government policy. These changes have included the one percent annual rent reduction, the implementation of the Voluntary Right to Buy, and the uncertainty surrounding the Local Housing Allowance and they have fundamentally changed the environment in which we operate. We have also continued to see reductions in spending on social care and the levels of grant funding. At the same time the Government is looking to Housing Associations to use their resources to play a key role in addressing the national housing shortage. These developments represent a major challenge to the sector, and Home Group has taken the opportunity to reassess its long-term strategy to ensure that we respond to the challenges laid down by the Government whilst continuing to meet the needs of our customers.


These policy changes reinforce the importance of the Value for Money Standard. We believe that we have met the Standard and have been fully transparent about our processes and performance within our Annual Report.  A number of areas for improvement have been identified. These are clearly set out in the Financial Statements and the accompanying self-assessment.


Home Group is strongly committed to delivering effective Value for Money.  We have worked to ensure that our work is underpinned by a commercial approach to drive efficiency and effectiveness. The current external environment demonstrates the importance of a commercial approach, and we will continue to work to ensure that this is reflected in all our decision making processes.


Benchmarking remains a priority, and Home Group's use and communication of benchmarking data has increased over the past year following the appointment of additional specialist analysts to this key function.  As well as ensuring that we have a full understanding of our relative operational performance and the factors that underpin it, benchmarking is being used to define key strategic targets and to identify opportunities to improve efficiency.


We have continued to play an important role in the sector on key issues such as the changes to the Local Housing Allowance and access for gas safety inspections. In addition, we have also engaged in the evolving devolution agenda, helping to establish 'Homes for the North', a group of the larger Northern-based housing associations. This enables us to share best practice, develop a stronger voice for the Housing sector in the North and research key themes and ideas.


We are operating in a rapidly changing and, at times, very challenging external environment.  The implementation of the Welfare Reform and Work Act - in addition to previous welfare changes, such as the roll out of Universal Credit - replaced the 10-year funding settlement with the one percent rent reduction policy for the next four years.  The government's legislative agenda has also become much clearer, with the landmark Housing and Planning Act 2016 passing just a few weeks ago.  This Act represents a significant change for the housing sector: making efforts to deregulate Housing Associations, reforming Planning Permission, introducing Starter Homes and, of course, enabling the Voluntary Right to Buy for Housing Associations.


In addition to these fundamental and wide-ranging legislative and policy changes, we are now facing a period of political and economic uncertainty following the referendum on 23 June.  At this stage, it is impossible to forecast the impact on our sector with any degree of confidence.  However, Home Group is financially robust.  In the light of the current uncertainty and its potential impact on consumer confidence and the housing market, we are reviewing the timing and scale of our development programme to ensure that it does not result in an inappropriate degree of risk to the organisation.


Following the various legislative and policy changes, we are currently in the process of a full strategic review.  The updated strategy will be underpinned by Value for Money and will be designed to make sure the organisation is well-positioned to build homes, independence and aspirations for our customers.


The impact of both the scale and pace of change that we have seen in the past year reinforces the need to ensure that we maintain our robust financial strength and that we continue to offer excellent Value for Money.  The past year demonstrates that we are making good progress.


At the same time, we are improving our effectiveness through greater integration of our activities and the implementation of a new Enterprise Resource Planning system, whilst delivering further efficiency and procurement savings.  With a strong credit rating of A, an In-Depth Assessment rating of G1 V1, a healthy surplus available for reinvestment and a gearing ratio of just over 50%, Home Group has the capacity and resources to continue growing, improving our services and building more houses.


Our year has seen some great achievements - we are delivering on our promises, our service standards continue to rise and our finances are in good health.  None of this would be possible without the continued dedication and commitment of all our colleagues.  I would like to take this opportunity to thank them all and recognise the huge contribution that they make.


Of course, there is always much more that we can and must do to enhance the lives of our customers and clients.  We have set demanding targets to continue to improve the range and quality of our services in the coming year and, whilst the external environment remains challenging, we are confident that our approach will ensure continued success.



Board Members


R J Davies, LLB, FCMA (Home Chairman)


C E R Bassett, LLB (Hons)


C H Booth (until 1 February 2016)


R A Bradley, DL, BA (Hons), DipSocAd, MA, CQSW (appointed 16 September 2015)


N J Clegg (until 1 April 2016)


N T Fee, BSc (Hons) (Senior Independent Member)


M G Henderson, BSc (Hons)


J Hudson BSc (Hons), PhD, ACA (appointed 14 July 2015)


R M Jackson, BA (Hons) (appointed 26 January 2016)


M Macfarlane, MA, MBA, LLB (Chair, Home Scotland)


B Mehta, CBE, BA (Hons), MSc


L A Morphy, OBE, BSc (Econ), MSc


N W Salisbury, BA (Hons)


Executive Team


M G Henderson, BSc (Hons)

Chief Executive


R M Byrne, BA, MCIH

Executive Director, Care and Support


R Du Rose

Executive Director, Customer Service


B A Ham, BA (Hons), MPhil, FRGS

Executive Director, Enterprise and Development


J Hudson, BSc (Hons), PhD, ACA

Chief Financial Officer (appointment date 1 June 2015)







Home Group Limited


Consolidated Statement of Comprehensive Income

For the year ended 31 March 2016













Cost of sales



Operating expenditure (including exceptional item)



Surplus on disposal of housing properties



Group operating surplus before exceptional item

Exceptional item

Group operating surplus

Share of profit before tax in joint ventures









Interest receivable



Interest payable and financing costs



Surplus on ordinary activities before taxation



Tax on surplus on ordinary activities



Surplus for the year




This information is provided by RNS
The company news service from the London Stock Exchange