Affinity Sutton posts another strong surplus

Affinity Sutton posts another strong surplus

Affinity Sutton has revealed good growth in its underlying surplus and a strong financial position for the year ended 31 March 2012.

Affinity Sutton, which has 57,000 homes across the country,  delivered a surplus of £46.2M which equates to an underlying surplus of £50.5M (excluding exceptional items) – an increase of 15% on a like for like basis compared with last year (excluding a one-off £5.4M pension credit).  Affinity Sutton’s turnover rose to £273M from £268M in 2010/11 and interest cover was at 232% at year end.

Financial results summary

2011/12 2010/11 Growth
Turnover £273m £268m +1.9%
Net surplus for the year £46.2m £49.2m
One-off exceptional items £4.3m -£5.4m
Underlying surplus £50.5m £43.8m +15.3%

Affinity Sutton’s consistently strong financial performance continues to be driven by its commitment to improve efficiency across the business – which saw efficiency savings of £9.4m across 2011/12.

Demonstrating this efficiency is Affinity Sutton’s operating cost per home which at £2,764 continues to be one of the lowest compared to any of its benchmarking peers. Customer satisfaction has been maintained at over 80% and Affinity Sutton has won and  been highly commended for 13 awards across the year including being named What House? Housing Association of the Year 2011. Across 2011/12 it completed 1,100 new homes for rent, low cost home ownership and private sale.

Affinity Sutton is committed to maintaining a strong development programme and has pledged to build nearly 10,000 homes over the next 10 years. To support this aim it introduced a new long term financial plan designed to secure  its financial strength and reflects the changing risk landscape posed by funding and welfare reform.  It also launched its first Corporate Responsibility Review – showcasing the investment Affinity Sutton makes in its homes, its communities and its people.  Affinity Sutton’s surplus will be entirely reinvested in its homes and communities.

Mark Washer, Group Finance Director, said:  “Our strong surpluses and reserves are essential elements of our determination to retain a strong financial profile and will be used to support our plans to build nearly 10,000 new homes over the next ten years.  With government grant funding for new affordable homes down to an average of just 12% strong surpluses and robust financial capacity are vital to support the significantly increased levels of funding we will need from the capital debt markets.”

Financial highlights

  • Turnover for 2011/12 was £273M, up from £268M in 2010/11.
  • The Group posted a surplus for the year of £46.2M equivalent to an underlying surplus of £50.5M – excluding exceptional items.
  • Affinity Sutton retained its Aa2 investor rating from Moody’s Investors Service for the fifth consecutive year.
  • Affinity Sutton achieved annual savings in excess of £7M from procurement exercises across a range of services.
  • Annual savings of around £650,000 from returning the financial services function in-house.
  • Around £200,000 savings from an innovative insurance arrangement with Igloo.
  • Interest cover of 232.2%
  • Affinity Sutton invested a record £62M into improving its existing homes.

Corporate responsibility highlights

  • Invested £170m in building over 1,100 new homes across the year for rent, low cost home ownership and private sale.
  • What House? magazine Housing Association of the Year 2011
  • Business in the Community National Award for Excellence for Building Stronger Communities 2011.
  • Achieved Investors in People Gold accreditation, an achievement shared with only 1% of recognised organisations nationally.
  • Invested £3.25M in its communities through community investment initiatives .
  • Created three new regional scrutiny boards.