Chief executive report
Report from the chief executive
During what was a hugely challenging year for everyone, I’m very pleased to be able to report that our customer advocacy rating increased year on year by over 3% to 85%, whilst at the same time, our financial performance improved, with our net surplus for the year after tax increasing by £13.7m to £62m and our social housing operating margin by 3% to 35%. Our primary focus throughout the year was keeping people safe and we consistently ensured our homes complied with all legislation, but we also continued to deliver growth and completed 902 new homes. On top of this, we reached agreement to the sale of our homes in the final three local authority areas to other not for profit housing associations which are not in our future operating areas; enabling us to do more in the communities where we own the greatest number of homes.
Very early on in the pandemic we provided engineers, neighbourhood coaches, and other frontline colleagues with the covid secure guidance and working practices to deliver as many services as possible in a safe and secure way. We initially focused on critical safety and servicing works and temporarily paused our new homes programme for two months until restrictions were eased. By mid-May 2020, a full service had resumed, and we continued to deliver for the remainder of the calendar year. During January to April we largely reverted back to an emergency and compliance only service. As a result, we ended the financial year with no homes with overdue compliance checks, a small backlog on day to day repairs, and a 20% deferral on our component programme. Our network of 227 neighbourhood coaches, many of them adjusting quickly to remote working, continued to play a key role in reassuring and strengthening relationships with customers, initially focusing on the vulnerable or those in at risk groups before broadening our approach. The impact on customers has been multifaceted and for older customers living in extra care or sheltered accommodation, colleagues have had to react swiftly and sensitively to the changing government restrictions and offer as much support as possible whilst maintaining our focus on safety. We saw a marginal reduction on rent arrears which remained below 2% at year end. Most pleasingly, though, overall customer advocacy increased by over 3%. All colleagues but particularly our engineers, neighbourhood coaches, and income team worked tirelessly to enable customers to thrive.
We completed 902 new homes, including 206 built by Bromford Developments Limited (BDL), our in-house contractor. Our target for the year was 1,300 new homes and this was impacted by both the COVID related shut down and careful reopening of our direct sites and partner sites. The deferral of our planned programme has been rescheduled largely to the 2021 to 2022 financial year whilst we expect to deliver just shy of 1,300 new homes of all tenures in the same period. Supporting the publication of the government’s social housing white paper in November, we commissioned a further independent assessment of our homes that re-confirmed that we have no significant remedial work to carry out from a cladding perspective. We also asked independent consultants to review our homes from both a 2030 EPC C and 2050 carbon neutral perspective. The results have led to us increasing our capital investment by £18m over the next eight years to achieve the 2030 target. We will be continuing our review of achieving the 2050 target in the new financial year. Towards the end of this financial year, we were preparing our bid for the next phase of Homes England grant funding as one of their strategic partners; reaffirming our ambitions to play a leading role in the construction of new homes across our area of operation. As part of mounting efforts to address sustainability issues, we were pleased to begin our first modular housing scheme in Gloucestershire and have recently begun the procurement process to find a modern methods of construction (MMC) partner so we can make further progress in this important area.
A greener future
Shortly after year end, we were delighted to publish our inaugural Sustainable Finance Framework which will underpin and enhance our future sustainability activity. Accredited by S&P Global Ratings, it captures a range of existing and future projects beyond the delivery of affordable housing: from reducing homelessness, to making our vehicle fleet greener, to benefitting from increasing diversity across our geography. The framework will give rise to the future publication of annual investor impact reports, setting out our performance on ESG projects against a set of pre-defined criteria. This, along with the setting up of a new sustainability forum, demonstrates our commitment to addressing environmental matters moving forward. Last year, we delivered the sector’s first green loan issuance, and earlier this year we established the first housing loan to generate interest savings as we successfully reduce our gender pay gap.
Over the 12 months we secured £275m of new funding at record low rates, including £200m of bonds and private placements with long dated deferrals which will be drawn over the next 12 months. The result being that we ended the year with over twice the level of required liquidity, with significant headroom continuing. The announcement of our second sustainability linked loan and the first in the sector tied directly to a governance metric around reducing the gender pay gap was further evidence of our growing focus around sustainability. The year also saw us retain our A2 and A+ credit ratings with Moody’s and S&P Global and the Regulator of Social Housing reconfirmed our G1 V1 classification.
Shift to digital
During the year, our business-wide transformation programme was rebooted, and we successfully delivered several major milestones, including a new HR and payroll system, a new external sales portal, moving engineers from three legacy systems to the same way of working, and going live with one new materials supplier for the whole group. The coming year will see a new customer portal launch as we support our customers to move to digital, meeting an increasing expectation to manage their account and tenancy with us online.
The Bromford Strategy 2019-2023 established a clear goal to review all our workspaces. We had completed most of this prior to 2020 to 2021 but we were able to accelerate many of our new flexible and collaborative ways of working, including investing in new devices for field workers and the first tranche of electric vans for engineers. We also pressed ahead with the refurbishment of two of our main office sites whilst reducing our overall office and non office floor space by nearly 60,000 sq ft.
I’d like to finish this year’s statement by expressing my enormous gratitude to Bromford colleagues, our contractors, and our key stakeholders for their resilience, flexibility, teamwork, and their unwavering focus on not only keeping people safe but enabling customers to thrive.