TIDM54XE
RNS Number : 3546M
A2Dominion Housing Group Ltd
14 September 2023
A2Dominion reports significant rise in costs and investment into
existing homes in 2022/23
A2Dominion Housing Group Limited has published its Annual Report
& Accounts for 2022/23, recording a turnover of GBP389.1m
(2022: GBP465.8m) and a net deficit of GBP12.8m (2022: GBP40.4m
surplus). This follows the Group's increased investment into its
existing homes to ensure they are safe and comply with new
regulations, as well as significant increases in its operational
costs, and planned fall in sales income.
A significant part of the housing association's reduced
operating margin and operating surplus (GBP50.3m) comes as a result
of the economic conditions the organisation and sector is now
facing. This includes GBP16.9m of impairments of active development
schemes, GBP7.9m of abortive costs for schemes deemed no longer
viable, and a further GBP7.6m of scheme write-downs within cost of
sales. Combined, these GBP32.4m of costs have contributed towards
the Group's reduced operating margin of 11.2% (2022: 20.1%), which
would otherwise have been 19.5%.
The Group also saw a planned reduction in its sales and
development programme which, coupled with construction delays, led
to a fall in sales income of GBP40.6m. It also increased its
investment into maintaining and improving its homes from GBP39.6m
in 2022 to GBP54.7m.
Notwithstanding, A2Dominion's balance sheet remains strong, with
GBP1.04bn of net assets and over GBP350m of available undrawn
facilities, demonstrating its ability to weather the current and
future challenges the economic environment presents.
Moving forward the Group will invest even greater resources into
redevelopment and service improvements. It has taken stock of its
operational and financial performance, continued investment to
address safety and building quality issues, and the needs of its
customers.
Ian Wardle, A2Dominion's Chief Executive Officer who joined the
housing association in September 2022, said:
"A2Dominion hasn't been immune to the tough economic challenges.
This year's financial performance has felt the full impact with
rising inflation, interest rates, and energy costs, alongside
tougher market conditions for construction and a reduced sales and
development programme.
"We've also chosen to continue significant investments into
remediating our tall and complex buildings and improving core
landlord services.
"All these factors have contributed towards significant rises in
our operational costs and pressures on our profitability. Work is
already underway to reduce our operating expenses, borrowings and
interest costs, which will help ensure our continued financial
sustainability and resilience over the medium to longer term.
"Overall, we continue to be a financially strong organisation,
with many of our services performing well. However we also
recognise that there are some important areas where we need to
improve and we are committed to putting this right."
Key highlights from the report:
-- 86.3% customer satisfaction with responsive repairs services
-- 85,000+ responsive repairs
-- New Damp & Mould and Enhanced Housing Management teams
-- GBP11.2 million generated in social value
-- Supporting 2,200+ customers to claim over GBP7 million in financial support
-- 745 new homes completed
-- 340 homes started on site
-- 1,748 homes to be built in our two-year development pipeline
-- Fitch A credit rating
-- 82% employee engagement score.
The full audited financial statements can be found in the
following location:
https://www.a2dominiongroup.co.uk/about/reports-and-accounts
Summary Financial Performance
GROUP STATEMENT OF COMPREHENSIVE 2023 2022
INCOME AND EXPENDITURE restated
GBPM GBPM
Turnover 389.1 465.8
Cost of sales (96.1) (181.6)
Operating costs (270.7) (213.0)
Surplus on sale of fixed assets 14.4 13.3
Share of jointly controlled entity
operating profit 6.7 9.2
Operating surplus 43.4 93.7
Operating margin 11.2% 20.1%
Net interest charges (66.9) (65.5)
Change in fair value of investments (0.8) 8.4
Movement in fair value of financial
instruments 4.7 2.7
Movement in fair value of investment
properties 0.6 9.0
Taxation 7.1 (6.4)
Non-controlling interest (0.9) (1.5)
Net (deficit)/surplus for the
year (12.8) 40.4
GROUP STATEMENT OF FINANCIAL 2023 2022
POSITION restated
GBPM GBPM
Tangible fixed assets and investments 3,600.2 3,624.0
Current assets 275.3 420.9
Creditors including loans and
borrowings (1,783.5) (1,952.6)
Deferred capital grant (1,050.8) (1,070.8)
Non-controlling interest (1.4) (1.7)
Total reserves 1,039.8 1,019.8
A copy of the Annual Financial Statements has also been
submitted to the National Storage Mechanism and will
shortly be available for inspection: https://data.fca.org.uk/#/nsm/nationalstoragemechanism
ENDS
Investor Contact
For further information, please contact Giedre Mickute, Head of
Treasury:
Tel: 07977 040 259
Email: giedre.mickute@a2dominion.co.uk
Media Contact
For media enquiries, please contact Sarah Ashton, Senior
Corporate Communications Manager:
Tel: 07823 532 199
Email: sarah.ashton@a2dominion.co.uk
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END
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September 14, 2023 05:30 ET (09:30 GMT)
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