Cyberattack saw arrears peak at 5% as customers cancelled direct debits

“We were able to respond quickly to implement our business continuity plan and ensure seamless service to our customers. Our arrears peaked at five per cent as customers cancelled their direct debits during the incident, but we have already improved performance to four per cent with a pathway established through agreed repayment plans as we return to our normal operating levels of two per cent to three per cent,” he said.

Social housing lettings contributed turnover of £240m during the year, representing 83 per cent of total group turnover, an increase from £225m (79 per cent) last year.

Post-tax surplus for the year was £64m. This was a drop from £69m in 2022, however last year’s results included a gain on disposal of £11m arising from the sale of 368 homes as part of a stock rationalisation drive.

Turnover was £290m in 2023, up from £284m in 2022.

Overall operating margin (excluding asset sales) of 31 per cent was fairly flat on last year (32 per cent).  

EBITDA MRI interest cover meanwhile rose to 1.9x, from 1.7x in 2022, while asset gearing (calculated as net debt/housing assets at historic cost), rose to 40 per cent, from 38 per cent.

The provider, which now owns or manages 46,450 homes, invested around £50m in its existing homes during the year. 

Writing in the report, Paul Walsh, chief finance officer, attributed the slight fall in social housing operating margin – from 36 per cent last year – to the gap between inflation and the permitted rent rise for the year (4.1 per cent).

Although predating the current seven per cent cap on rent rises in place for this year (2023-24), the rate of increase was calculated based on Consumer Price Index in September 2021 of 3.1 per cent, meaning rents did not keep pace with the high level of inflation during the year. 

“As we continue to focus on our core business of social housing, we are delighted to have delivered a social housing operating margin at the leading edge of the sector and in line with our reforecast of 34 per cent,” Mr Walsh said. “Whilst this is lower than last year’s performance, reflecting the sector’s challenge of a rent uplift in the year of 4.1 per cent against double-digit inflation across our cost base, our margins will continue to benefit from a £5m strategic cost review that is now firmly embedded in the business.”

He added: “The reduction in margin also reflects our proactive investment in our existing homes as we work to bring outstanding repairs to below 6,000 in line with pre-COVID levels. We stepped up our overall investment in our existing homes to c.£50m for a second year in a row and we continue to profile over £2bn of investment in our existing homes over the life of the business plan.”

Record new homes delivery

The unaudited results also show a record year of development for the landlord, with 1,265 new homes completed, all at affordable tenures and nearly half (554 homes) at social rents. Affordable rent accounted for 348 homes, and shared ownership for 363.

According to the document, the group has board-approved budget for the 2024 year to enable the completion of 1,250 new homes, all at affordable housing tenures, as part of its intended pipeline of delivering 12,000 new homes by 2031.

Bromford is graded G1/V1 by the Regulator of Social Housing, and has credit ratings of A2/A+ from Moody’s and Standard & Poor’s respectively. 

Mr Nettleton said: “Our year-end results reflect our continued operational and financial strength during a period that saw significant challenges to our sector and the wider economy. Against a backdrop of rising inflation and unpredictable financial markets, a continued cost of living crisis and uncertainty over social housing rents, our priority has always been the well-being of our customers and our people. 

“So we are proud that our customer advocacy score has increased by four per cent to 83 per cent; that we retained our top G1/V1 ratings from the Regulator of Social Housing; and that we delivered a record year for development with 1,265 new homes, all of which are affordable and almost half of which are social rent.”

The association’s trading update yesterday also saw Bromford include key environmental, social and governance (ESG) indicators, or ‘sustainability golden metrics’, alongside its financial update to investors for the first time.

The association called on Sustainability for Housing, which oversees the sector’s ESG standard, to promote the inclusion of such metrics across the sector.