Chief executive report
Report from the chief executive
I’m very pleased to introduce our 2022 to 2023 annual report and accounts.
In what has been a challenging operating environment, I’m delighted to be able to report positive results and significant achievements, all flowing from our clarity of purpose – investing in homes and relationships so people can thrive.
The year saw us respond to a cyber incident; the cost of living impact for many of our customers and colleagues; higher inflation; the differential between rental income and costs; the understandable significant focus on the housing sector’s response to condensation, damp and mould following the tragic death of a two year old boy in Rochdale and the impact of the government’s emergency budget.
Given such I’m really pleased to be able to report our year-on-year customer advocacy increased by 4% from 79% to 83%.
The affordable housing sector has responded to a significant increase in demand for repairs in the past year. At Bromford, the year saw us deliver a 2.2% increase in repairs at an additional cost of £1.6m. Of this £1.1m was directly related to condensation, damp and mould. Throughout the year we completed works on 226 properties an increase of 9% on 2021 to 2022.
We’ve continued to invest considerably in our homes, with a further £56m of investment and ended the year with 99.9% of our homes meeting the Decent Homes Standard and 87% of our homes being at the environmental efficiency rating of SAP C or better. We remain on track for all our homes to be at EPC C by 2028, two years ahead of the government’s requirement.
Whilst investing in current homes, we continue to deliver our strategy of creating new homes for customers. In 2022 to 2023 we increased the number of new homes we built from 1,224 to 1,265 – all of which were affordable, absolutely fulfilling our focus of providing homes for people who can’t access market housing.
For the previous two years we’ve built more homes for social rent than any other housing association in England and I’m delighted that in 2022 to 2023 we increased the number we built again to 554 (444 last year).
Given the challenging operating environment I’m pleased to report a strong set of financial results. We achieved a net surplus of £75m (2022: £79m). Overall operating margin of 31% (2022: 32%); social housing operating margin of 34% (2022: 36%); and earnings before interest, tax, depreciation and amortisation (major repairs included) (EBITDA MRI %) of 1.9% (2022: 1.7%).
We continue to focus considerably on the medium and long term too with our liquidity sitting at twice our policy and cash and available funds at £455m. I’m really pleased too to report that we continue to retain a sector leading dual credit rating with Moody’s and Standard & Poor’s.
I was also pleased to see our colleague satisfaction increase. We undertake the independent Great Place to Work survey and we saw 69% of colleagues stating that Bromford is a great place to work, an increase from 61% in 2021 to 2022. We also continued to reduce our gender pay gap to 6.5%.
We’ve continued our open and constructive relationship with the Regulator of Social Housing (RSH) and were pleased to retain our G1/V1 grades following an in depth assessment in the summer of 2022. It’s notable that less than 40% of the housing association sector now has such regulatory grading.
Throughout the year we’ve continued our investment in creating our technological platform for the next decade – our Dynamics 365 (D365) ERP (Enterprise Resource Planning) solution – going live with our CRM (Customer Relationship Management) system, portal and other elements. Unfortunately, adoption was impacted by a later cyber incident but we were able to operate the business during the incident, whilst bringing all elements back online within two months.
Looking to the future, we see that the operating environment will continue to be challenging, with many of the current operating environment challenges continuing in 2023 to 2024. Securing an appropriate long term rent settlement for the sector will be very important this coming year, so too, in our view, will be the government recognising the role fundamental regeneration will play in the years to come.
At what feels like a pivotal moment in the sector, we launched our new 2023-2027 Bromford Strategy in March 2023 and we are confident that the platforms we’ve built and are completing, place us in a strong position to step into our size more. Our purpose and core business remain the same but we’ll be increasing our focus on place and also scale. As a result we will continue our investment in our proactive neighbourhood coaching model but will look to improve it further by creating a more dynamic way of working. We’re retaining our commitments on achieving EPC C and, responding to the very significant need, we will increase the number of homes we build. More importantly we will look to work more in partnership to build places rather than just homes and where appropriate seek to build at scale.
Our 2019-2023 Bromford Strategy included a Financial Framework to ensure that all the strategic decisions we made were assessed against such framework. Importantly, looking ahead, our 2023-2027 Strategy now includes three frameworks – a refreshed Financial Framework, a Customer Framework and a Sustainability Framework, which guide our strategic decision making.
I’d like to finish by thanking all my colleagues at Bromford who have worked tirelessly over the past year to deliver the results and key stakeholders with whom close working has enabled even more customers to thrive.