Bromford achieves AA3 credit rating
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Bromford, a social business and one of the UK’s leading affordable housing and specialist support providers, has today been assigned an AA3 issuer credit rating by Moody’s Investors Service, one of the world's leading providers of credit ratings, research and risk analysis.
The announcement demonstrates the on-going strength of the organisation, placing it in Moody’s highest rated category of any housing association alongside just one other, Affinity Sutton.
Moreover, this makes Bromford the highest Moody’s rated association outside London and the South East, where sales receipts driven by buoyant property prices have underpinned the core social renting business of many associations.
Today’s rating is an independent validation of Bromford’s high credit strength, making them well placed to secure future funding to develop new social housing across central England. With the future outlook for Bromford described as ‘stable’ by the ratings agency, the announcement demonstrates confidence in the continued success of the business and its focus on tight financial controls and rigorous risk management.
Bromford’s Finance Director, Andrew Battrum, commented on the outcome:
“This rating is a reflection on our measured approach to growth, good track record on risk management and our financial strength.
“Moody’s were particularly impressed by our joined up approach for example, on our initiative the ‘Bromford Deal’ with its focus of getting customers into work, as it reinforces the way we are managing welfare reform risks and is underpinned by our exceptional record of successfully supporting people to overcome the barriers they face.”
Bromford’s operating margin (35% in 2013) is particularly strong and on an improving trend which is expected to continue. The strong business plan Bromford has in place is subject to a high level of stress testing against a range of multiple scenarios, to ensure it can withstand a wide range of pressures. This strength has been achieved through a strong focus on cashflow and liquidity combined with an approach of piloting new business activities, testing out and evaluating propositions before scaling up successful projects.
Mick Kent, Bromford’s Chief Executive, added:
“Moody’s spent a lot of time getting to know our business and have awarded us a rating which puts us at the very top of the housing association sector. This really is a milestone for us - a powerful external validation of our approach and a testament to the excellent work of our colleagues throughout the business.”
Moving forward, Bromford is expected to maintain its strong financial performance, with its long-term business plan showing margins at similar levels to 2013 and also strengthening interest coverage levels.
- One of the 20 largest associations, with a turnover in 12/13 of £153m.
- Owns and manages over 27,000 homes in the M5, M4, M1 M6 triangle.
- Operates in 51 Local authorities including Buckinghamshire, Northamptonshire Oxfordshire, Shropshire, Staffordshire, Warwickshire, West Midlands and Wiltshire.
- Provides support services (under contracts placed by social care and health commissioners) to around 10,000 individuals each year.
- Develops 600-700 new homes each year and in 12/13 invested £73m in this activity
- Employs about 1,200 people.
- Participating in the Department of Work and Pensions Universal Credit pilot (Shropshire).
- Developing an innovative ‘something for something’ approach to tenancies – the ‘Bromford Deal’.
- Top ratings for governance and financial viability from the Homes and Communities Agency, the sector regulator.
- Raised £61m by a private placement in 12/13 and has net debt of £535m (March 13).