Northern Ireland Housing Association Consolidated Accounts November 2015

Transcription

1 Northern Ireland Housing Association Consolidated Accounts October

2 Background to consolidated accounts NI data from published accounts Number of Northern Ireland 1 Associations Period covered Cost of Housing Stock Number of people employed (FTE) England,Wales and Scotland data Associations Associations Associations Associations 2015 refers to years ends from 31 December 2014 to 31 March ,436m ,275m ,045m , , ,853 Sourced from published 2011 accounts 2,825 for 2013/14 by regulators in each jurisdiction 2

3 Key financial highlights Income & expenditure account 2015, ,000 Turnover 214, ,078 Operating costs 157, ,313 Operating surplus 56,328 52,139 Loss on sale of assets (548) (321) Interest receivable 980 1,091 Interest payable 30,189 27,715 Surplus before transfers 21,476 27,549* Turnover up by 5.5% Operating costs up 4.5% Operating surplus up 8% Interest paid up 8.9% Surplus down -20.1% *1 Association 10.8m goodwill on acquisition in excluding this from prior year results in an underlying increase in surplus of 28.2% 3

4 NI Consolidated Income and Expenditure trend to The sector has grown consistently throughout the period with turnover increasing by 23.8% over the 4 financial years with a corresponding increase in operating surplus of 35.8% representing increased economies of scale and operating efficiency. This has created headroom for interest costs to increase by 42.3% without impacting upon overall surplus levels. 250, , , ,000 50, Turnover Op Costs Op Surplus Int Payable Surplus (before transfers) 4

5 Key financial highlights Balance sheet GBV up by 4.9% Gross book value 3,436,041 3,275,986 Capital grant 2,476,288 2,383,646 Depreciation 17,537 16,578 Net book value 958, ,548 Cash & Short Term Investments Total assets less current liabilities 160, ,005 1,090,983 1,017,982 Long term loans 691, ,687 Capital grant up 3.9% Depreciation up by 5.8% NBV up 7.6% Cash & ST investments up by 21.9% Loans up 7.7% 5

6 NI Consolidated Balance Sheet trend to The sector s balance sheet has grown over the past 4 financial years; GBV of housing is up 19.0%, total assets less current liabilities is up 33.7% and long term debt is up 47.7%. This growth has been sustainable with the underlying strength of the balance sheet remaining steady Balance Sheet 000s GBV Housing Capital Grant Total assets less current liabilities Long term loans 6

7 Rental income, operating surplus and surplus before transfers has increased year on year and continues to show a rising trend Trend in turnover, operating surplus and surplus before transfers 000s 250, , , ,000 50,000 0 Turnover Operating surplus Surplus before transfers

8 Gross margin has remained steady between 2013 and % % % Gross margin remains steady The increase in turnover was not matched by an equal increase in operating costs. This led to an improvement in gross margin during 2015 compared to Gross margin is now at the level recorded in

9 Analysis of resources expended Wages and have remained steady as a percentage of the total expenditure but depreciation has increased Analysis of 2015 expenditure Analysis of 2014 expenditure Other costs 41% Wages & salaries 34% Other costs 42% Wages & salaries 34% Interest payable 16% Deprecia tion 9% Interest payable 17% Depreciat ion 7% 9

10 The Total Number of Units under management has increased by 4.2% from 44,210 to 46,074. Number of Units under management ,644 33,354 31, Equity sharing Rented - shared Rented - self contained 10

11 The sector now contributes over 60m through remuneration to the local economy. Average remuneration has increased by 6.6%. Pension costs as a percentage of the total remuneration package has risen over the 5 years from 7% to 9.4% Analysis of salaries and wages 2011 to ,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000, ,023 19,245 18,939 19,920 21, Salaries Social Security costs Pension costs Other 11

12 Growth in NBV of housing properties (before impact of HAG) Value in millions 4,000 3,500 3,000 2,500 2,000 1,500 1, ,436 3,276 3,044 2,845 2, Source: Consolidated Accounts 12

13 Growth in NBV of housing properties with HAG contribution Value in millions 4,000 3,500 3,000 2,500 2,000 1,500 1, ,994 2,135 2,239 2,383 2, HAG Other funding Source: Consolidated Accounts 13

14 The cost per house has remained steady between 2014 and 2015 at an average of 74k per unit Average GBV per unit , Average GBV per unit 14

15 During the average decontrolled rent in the sector for rehab housing and new build was as follows Rehab (decontrolled rent) Rehab (Controlled rent) Rehab (decontrolled rent) New Build (decontrolled rent) Average New Build (decontrolled rent) New Build (Controlled rent) Rehab (Controlled rent) New Build (Controlled rent) Average 15

16 HAG represents nearly three quarters of cumulative financing for Housing Association properties in Source of Housing Finance % 10% 73% HAG Borrowing Other (grants and HA reserves) 16

17 but borrowing is becoming an increasingly important source of finance rising from 17% to 20% of total cumulative financing in just 3 years, whilst HAG has decreased by 1% over the same period. Source of Housing finance % 8% 72% HAG Borrowing Other (grants and HA reserves) 17

18 During there was over 120m* of housing capital additions, of which just over 50% was funded through HAG Split in source of finance for capital additions between HAG and Housing Association resources Additions HAG Housing Association *Excludes Choice, Co-ownership, Covenanter and Craigowen 18

19 Accounting policy for housing property Average useful economic life Asset type Structure Roof Windows and doors Primary heating unit Kitchen Bathroom Mechanical systems (plumbing) Electrics Lifts Average life 93 years (range 50 to 100 years) 73 years (range 40 to 100 years) 29 years (range 15 to 40 years) 15 years (range 10 to 20 years) 19 years (range 10 to 25 years) 26 years (range 15 to 30 years) 30 years (range 15 to 35 years) 33 years (range 25 to 40 years) 25 years (range 20 to 30 years) 19

20 Northern Ireland ratios Working capital Current assets/ Current liabilities Gearing Net Borrowing/Total capital and reserves plus HAG Net Borrowing plus pension liability/total capital and reserves plus HAG Return Operating Surplus/Total assets less current liabilities % % % %

21 How do we compare to England and Scotland and Wales Number of Units managed England 2,638,000 Scotland 285,000 Wales 157,000 N Ireland 46,074 21

22 Key financial highlights England m Scotland m Wales m Turnover 15,634 1, Operating costs 10,606 1, Operating surplus Surplus on sale of assets 4, Interest payable 2, Surplus before transfers 2, Turnover up by 5.1% Operating costs up 4.8% Operating surplus up 6.5% Interest paid up 4.9% Surplus up 18.6% 22

23 Key financial highlights England m Scotland m Wales m Gross book value 132,741 13,330 5,903 Capital grant 45,926 7,543 2,888 Depreciation 8, Net book value 78,155 4,858 2,658 Total assets less current liabilities 87,261 5,698 2,965 Long term loans 56,825 3,378 2,112 Cost up by 5.5% Capital grant up 1.5% Depreciation up 11.5% NBV up 7.7% Loans up 4.0% 23

24 Our profitability margins are strong both at operating and net profit levels compared to peers Profitability ratios Net margin Operating margin Northern Ireland Wales Scotland England 24

25 Growth in income and operating surplus year on year is similar to England. Interest payable has grown ahead of Scotland and England reflecting the need to privately finance development. Growth ratios Percentage increase year on year England Scotland Wales Northern Ireland Income Operating surplus Interest payable

26 Development has continued, financed by HAG and loans. Borrowing was highest in Wales again but grew consistently everywhere else. Growth ratios Percentage increase year on year NBV Capital grant Total assets less Current liabilities England Scotland Wales Northern Ireland Long term loans 26

27 Debt servicing ability England 22,474 Scotland 12,184 Debt per unit Borrowing per unit reflects higher gearing and in NI has increased year on year reflecting increased borrowing to finance development Gearing England 93.8% Scotland 31.9% Wales 13,500 N Ireland 15,001 NI gearing is similar to Wales and has increased year on year. Wales 61.1% N Ireland 64.4% 27

28 Average rents in NI are comparable with Wales, lower than England but higher than Scotland reflecting NI s ability to generate larger surpluses than Scotland and Wales despite higher debt per unit levels Average weekly rent ( ) Weekly rent England Scotland Wales Northern Ireland London SE England NE England Yorkshire 28

29 In summary Sector well positioned financially with growth in surplus year on year at 8% ahead of GB 6.5% (England 7.5% up, Scotland 4.7% down and Wales 2.7% down) However, rent levels potentially higher than Scotland and Wales (based on small sample). Worth completing a complete exercise to benchmark against GB accurately? Sector has contributed to the NI economy with a 4.2% growth in units compared to the GB average of 2.3% growth in units managed Growth has been positive and so far it appears to be sustainable can this continue into the future? 29

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