Bromford maintains £33m half-year surplus while delivering 472 new homes

In the first half of 2023-24, Bromford’s average first tranche share was at 40 per cent and the provider has generated a total of £18m of income from these sales.

The landlord said it is on track to meet its full-year budget of 357 shared ownership home sales. It will have no homes for open market sale this year, compared to two open market sales in the six-month period last year.

“We are pleased that after another challenging six months, our financial performance remains strong,” said Paul Walsh, chief finance officer at Bromford.

He said that “in the face of persistently high inflation against a rent cap”, the landlord maintained its surplus while investing more than £25m in its existing homes and delivering 472 new affordable homes.

The six-month investment in existing homes compares with £56m of expenditure in the full year to the end of March.

Meanwhile, the number of new homes delivered in the six months was a slight drop on the more than 500 units delivered in the same half-year period in 2022-23.

Of the new homes delivered in the period to September 2023, most were for social rent (212) while 126 were for affordable rent and 134 were for shared ownership. 

Bromford said that because of the planned phasing of handovers on contracted schemes, it expects to realise more than 700 completions in the second half of the year, and is on track to deliver more than 1,200 new homes by 31 March 2024.

These will all be at affordable tenures with no open market sale homes.

Bromford said it will continue to pursue its development aspirations, with a plan for 12,000 new homes by 2031.

In addition, the majority of the landlord’s homes (87.4 per cent) are now at Energy Performance Certificate Band C or above.

Mr Walsh said that Bromford is committed to providing quality homes and maintaining financial discipline, and that it is working on achieving £5m of efficiency savings by the end of the year.

He said: “We are determined to provide homes that our customers are proud to live in and at the same time, we are committed to financial discipline. The vast majority of our income is generated in our core business of social housing lettings, which makes up 86 per cent of our turnover. At 34 per cent, our social housing operating margin is amongst the highest in the sector, but we recognise that it is below budget.

“We have spent significantly more than budgeted on service delivery for our customers, most notably on tackling condensation, damp and mould, where we have already invested £2.6m against a full-year budget of £1.8m. We will continue to invest in our existing homes and will not compromise the safety and well-being of our customers.

“But at the same time, we are working hard to drive efficiencies in our business; our strategic cost review which focuses on general overheads and the benefits of in-sourcing will deliver £5m of savings by the end of the year, with 80 per cent of the actions to embed these savings already actioned.

“When these efficiencies are delivered, we expect performance to meet the budgeted social housing operating margin of 36 per cent by the year end.”

Elsewhere, asset gearing increased from 39 to 41 per cent and cash and undrawn facilities reached £434m.

Imran Mubeen, director of treasury at Bromford, said that over the next six months Bromford will expand its revolving credit facilities (RCFs) to establish total available facilities of £450m.

This follows the housing association securing a £100m private placement from three investors in September and a £75m RCF with ABN AMRO in June.

In August the provider co-designed a sector-first deal to ‘recoupon’ an existing private placement with Legal & General Investment Management to unlock £50m of additional funding.

Mr Mubeen said the new loans would be “sustainability-linked, with a unique social or customer-themed KPI for each facility”.

He added: “Importantly, our new loans will also focus more holistically on our decarbonisation strategy with an aspiration to re-baseline our Scope 1, 2 and 3 emissions and set annualised targets, which will remain independent of any changes to government policy.”

According to its annual results for the year ending 31 March 2023, Bromford posted a surplus of £40.2m, a drop from £50.7m in the previous year.