Bromford releases half yearly trading update
Bromford has announced a strong set of half-year results with increased turnover and growth in core operating margin on social housing lettings.
The West Midlands and West of England housing association’s results for the six months to 30 September 2021 revealed a ten percent year-on-year increase in turnover to £142m (2020: £129m) and a 28% increase in operating surplus to £64m (2020: £46m). It also reported an increase in its operating margin on social housing lettings to 36%. Overall operating margin including asset sales climbed to 45%, boosted by the strategic of disposal of 359 homes which completed Bromford’s withdrawal from four local authority areas, and a greater level of shared ownership and open market sales homes than budget The strategic disposals have been front loaded in the financial year, and the overall operating margin is therefore expected to align with the forecast position by year end.
After having its status as a Homes England strategic partner reaffirmed earlier in the year, Bromford reported it had completed 502 homes during the first six months of the year and remains on target to deliver 1,200 new homes by the end of the year. Over 400 of these homes will be for social rent, building on Bromford’s position as the largest develop of social rent homes in the previous financial year.
Chief executive Robert Nettleton said: “We are pleased to report a strong set of financial results alongside our continued clear purpose of enabling customers to thrive in what has been a challenging operating environment.
"Alongside our financial results we are pleased to have maintained a customer advocacy rating of over 80%. We have focussed heavily on Covid catch up repairs and addressing issues of condensation, damp, and mould which have affected around 0.5% of our homes. We have continued to focus on ensuring our homes are safe and have completed our work to be compliant with the Fire Safety Act ahead of schedule.
"We continue to pursue our ESG strategy; with over 84% of our homes already at EPC C, we continue to pro-actively identify further carbon reduction measures and have increased our fleet of electric vans to 72. As part of a broader Equality, Diversity and Inclusion agenda, we have partnered with a number of other leading housing associations to launch a Future Leaders Programme to support and mentor colleagues from minority backgrounds.
"With rising inflation, the road to decarbonisation, fire safety and an ever-increasing focus on our existing homes, coupled with continued growing demand for affordable housing, the sector has a number of challenges to address over the coming years. We continue to deliver a focussed Corporate Strategy with strong financials to meet these challenges with the rigour and purpose they deserve."
Paul Walsh, chief financial officer, added: “We have continued to deliver a strong financial performance within the parameters of our Financial Framework. Our social housing margin has grown to 36%, with efficiencies in our operating model and rent inflation successfully offsetting the rise in catch up repairs.
"We continue to deliver a strong operational performance, maintaining net arrears of 2% through proactive engagement with customers from our neighbourhood coaches and income collection colleagues. We have also seen improvements in voids at 1.45%.
"We are delighted with our sales performance; delivering the full year budget of outright sales in the first half of the year. Importantly, we haven’t built up a significant level of work in progress. At 30 September, we held only 65 unsold units of which only 18 units have remained unsold for over six months, five fewer than at 31 March 2021. We have also disposed of a further 359 homes across four local authority areas outside of our core geographies, effectively meeting our target for the year as expected by September, and at higher values than budgeted and driving up our year-on-year surplus by £18m."