We have reported an 11% increase in our surplus off the back of record turnover after another year of strong financial performance.

In a trading update released today for the year ending 31 March 2022, we have announced our post-tax surplus had risen to £69m over the past 12 months (2021 FY: £62m), while turnover rose to £284m (2021 FY: £266m). Our operating margin on social housing lettings increased to 36% (2021 FY: 35%), while social housing lettings contributed to 79% of total turnover (2021 FY: 82%). This performance was aided by recording arrears levels of just 1.9% for the second successive year thanks to the positive influence of our neighbourhood coach housing model. We have continued to invest in our communities across the West Midlands and West of England with an expanded team of income management advisors working alongside our neighbourhood coaches to help customers to thrive.

We also announced we have exceeded our development targets for the year, completing 1,224 new homes, a 36% increase on the previous year. The number of homes for social rent built rose to 444 while we also built 350 affordable rent and 392 shared ownership homes. Our future development plans were strengthened during the year after we agreed a £240m strategic partnership with Homes England, which will support the construction of 4,000 affordable homes by 2029.

Chief executive Robert Nettleton said: “We’re pleased to report a strong set of financial results in a year when the Covid pandemic continued to provide many challenges for our customers, colleagues and stakeholders. Our primary focus throughout the year continued to be the safety and wellbeing of our customers and colleagues.

“Despite the challenging environment we substantially increased our development programme delivering 1,224 new homes enabling even more customers to thrive. 1,201 of these homes were at social and affordable tenures and we are particularly pleased to have delivered even more homes for social rent with 444 completions.”

He added: “Our sustainability agenda remains at the heart of our strategy and business plan. During the year we progressed our net zero carbon targets bringing forward our target to have all homes to EPC C by two years to 2028. In addition, our long-term financial plan now includes the full cost of achieving our net zero carbon target by 2050, and remains fully compliant with our funder covenants and Financial Framework.  We delivered on our year one targets set out in our two sustainability linked loans and have invested the savings into further community projects to add even more social value for our customers.”

Chief finance officer Paul Walsh added: “Against the backdrop of an increasingly difficult operating environment with rising inflation, significant volatility in terms of the supply and cost of materials and growing challenges around the supply of labour, we continue to deliver a strong set of financial results within the parameters of our Financial Framework. 

“Our social housing and operating margins have improved to 36% and 32% respectively as a result of rent growth and conscious management of our operating costs.  Our net surplus remains strong at £69m boosted by the strategic disposal of 368 homes which completed our withdrawal from three local authorities as we continue to rationalise our operations to focus on core geographical areas.  Our strong surplus allows us to self-fund a significant proportion of the investment in our new and existing homes. We maintained net arrears of less than 2% through the close working with our customers from our unique neighbourhood coach and income management teams.”

During the past year we had our A+ rating with S&P confirmed, with our outlook upgraded from negative to stable and maintained our credit rating of A2 Stable with Moody’s. We will be publishing its full, audited accounts later this year.

Read the full trading update.