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REG - Anchor Hanover Group - Annual Financial Report

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RNS Number : 2507U  Anchor Hanover Group  29 July 2022

Anchor Hanover Group

29 July 2022

 

Anchor Hanover Group ('Anchor') - Publication of Financial Statements

Anchor, the largest operator of social housing for older people and sixth
largest residential care home operator in England, announces the publication
of its annual report and financial statements for the year ended 31 March
2022.

"Despite a challenging period, we ended the financial year in a strong
position. While the restrictions caused by Coronavirus were having a
significant impact on many organisations during the year we have continued to
provide quality homes for those living in later life and are driving occupancy
back to pre-pandemic levels.

Our strategy to build more and better homes in a sustainable way has continued
unabated and we are focussed on continually improving the homes we provide.
The ongoing cost of living challenges facing individuals across the UK and
increasing energy costs facing all organisations are central to our thinking
as we consider how to ensure services remain affordable and represent value
for money across the range of tenures and service models which we operate.

We are extremely grateful to colleagues who continue to work hard to ensure
residents can love living in later life and were pleased to demonstrate our
commitment to our workforce by becoming the first large provider of care and
housing to pay all our colleagues, whatever their age or wherever they work,
at or above 'the Real Living Wage', as part of a comprehensive and competitive
reward and wellbeing offer."

Sarah Jones, Chief Financial Officer

The financial statements can be accessed at the following link:

https://www.anchorhanover.org.uk/investors/our-financial-performance
(https://www.anchorhanover.org.uk/investors/our-financial-performance)

 

A copy of this document has been filed with the National Storage Mechanism and
will shortly be available for inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)

 

Highlights

·  Occupancy levels continue to recover from the lows experienced during the
pandemic and consumer demand remains strong

·    Revenue for the year ended 31 March 2022 was £526.2m, a decrease of
0.4% on the previous year, with improved income from occupancy rates in
housing to let and residential care homes offset by a reduction in proceeds
from property sales reflecting the stage of the construction cycle for
developments

·    Operating surplus before exceptional items was up 12.3% at £53.8m
from £47.9m in the previous year with improvements in both housing to let and
residential care, including £4.7m increase attributable to a one-off thank
you payment to colleagues being included in the prior year comparative

·   On track to deliver £22m efficiency savings identified from merger with
£14.7m achieved by 31(st) March 2022

·    First large provider of care and housing to pay all our colleagues,
whatever their age or where they work, at or above 'the Real Living Wage'

·    Ahead of plan to provide 5,700 new homes

·    Anchor maintains a rating of A+ stable from S&P

·    Sarah Jones to be in post as Chief Executive from 1(st) August 2022,
and Board and Executive strengthened with new appointments

·    As announced to the market on 28(th) July 2022, Anchor acquires
Halcyon Care Homes TopCo Limited.

 

Financial Highlights

 Figures in £m                                31 March 2022  31 March 2021
 Turnover                                     526.2          528.2
 Operating surplus before exceptional items   53.8           47.9
 Operating margin before exceptional items %  10.2%          9.1%
 EBITDA MRI                                   64.8           56.2

Commentary

Operations

Strong underlying demand for our services, our reputation for quality, and
effective targeted marketing have resulted in a marked increase in occupancy
levels from the lows experienced during the pandemic. Despite ongoing
restrictions on admissions for care homes and challenging recruitment
environment, Anchor ended the period under review with occupancy levels at
98.5% and 83.9% in our housing and care homes respectively (prior year: 97.7%
housing to let, 78.2% care homes).

At the time of the 2018 merger with Hanover Housing Association, the Board set
a target of £22.0m in integration savings to reinvest back into the
organisation for the benefit of the older people we serve. We have achieved
£14.7m of this total by 31 March 2022 and are on target to achieve the
remainder by the end of our 2023 financial year.

A proactive approach to reward meant that, in addition to a commitment to
becoming a Living Wage Foundation employer, we also implemented the 2022/23
pay review on 1 December 2021 for colleagues who were below the Living Wage
Foundation rate, four months ahead of our usual 1 April timeframe. This made
us the first large provider of care and housing to pay all our colleagues,
whatever their age or wherever they work, at or above 'the Real Living Wage',
and is part of a comprehensive and competitive reward and wellbeing offer.

We continue to innovate and, in May 2022, launched our dementia music therapy
research project with Anglia Ruskin University's Cambridge Institute for Music
Therapy Research, with funding from The Utley Foundation. The project
makes Anchor one of the first care home providers in England to partner with
a university to implement music therapy sessions into its dementia care
pathway.

Our investment in more and better homes continues to create new opportunities
for colleagues and we were very pleased that our commitment to embracing
difference and being welcoming to all resulted in us achieving silver status
with Inclusive Employers in September 2021 in recognition of our work in the
area of Equality, Diversity and Inclusion.

We launched our "Be Well" offer to bring together the range of ways we support
residents' wellbeing into an easy-to-understand and easy to access package.
As part of this "Be Wise", our free service supporting housing residents to
claim the benefits they are entitled to and get the best deal on their energy,
increased residents' income by £4.4million. The team took 14,000 calls and
assisted residents with an average of 360 new cases each month.

Increasing cost of living pressures and energy price rises over the last year
have driven the number of calls to our Be Wise service, which increased by 13%
on the previous year. Residents truly value this service, with the team
continuing to receive compliments and high satisfaction feedback throughout
the year from the residents they supported.

Development

Our 2019 business plan was updated in 2021, committing to provide 5,700 new
homes and expanding our care home portfolio alongside ongoing investment in
our existing services. Since 2019, we have completed 305 homes, are in
construction with 737 and have an approved pipeline of 1,580. This puts us
ahead of where we had planned to be by this stage.

In April 2021, along with four other of the UK's largest not-for-profit social
housing providers, we launched The Greener Futures Partnership with the core
objective of creating sustainable tenancies, homes and communities.

Building on our strong focus on sustainability, we are committed to achieving
a minimum Energy Performance Certificate rating of B or above for every new
home we develop, and all new homes will have access to sustainable, renewable
energy sources.

Liquidity

Liquidity remains strong following our debut public bond issue in July 2021
with £235.6m in undrawn available loan facilities and cash available to fund
the development programme.

Revenue for the year ended 31 March 2022 was £526.2m, a decrease of 0.4% on
the previous year. Operating surplus before exceptional items was up 12.3% at
£53.8m from £47.9m in the previous year. EBITDA MRI (Earnings Before
Interest, Tax, Depreciation, Amortisation, Major Repairs Included) which is a
key liquidity indicator for our lenders was £64.8m, compared with the £56.2m
generated in the previous year. At the year end, our net assets were £571.9m,
net borrowing was £516.1m and the gearing level was 21.4%.

Credit and Regulatory ratings

Anchor maintains a rating of A+ stable from S&P which was issued in March
2022. This rating reflects the group's strong balance sheet position and
robust business plans set out within a strong risk control framework. The
group remains G1/V1 compliant under the Regulator of Social Housing's
Governance and Viability assessments.

Our care homes have continued to see strong quality ratings from the Care
Quality Commission; as at 31 March 2022 90.5% of our services were rated Good
or Outstanding, and we receive excellent feedback from residents and families
through regular surveys and external reviews on websites.

Board and Executive Board Changes

We announced in June 2022 that Jane Ashcroft was stepping down after more than
twenty years at Anchor and twelve of them as Chief Executive. Sarah Jones was
appointed to the role, with effect from 1 August 2022, following a thorough
and comprehensive search for Jane's successor using external consultants.

We were delighted to welcome Denise Peart, Chief Talent, Diversity and
Inclusion Officer at Sky, to the Board in March 2022. Alun Griffiths retired
during the year at the end of his term as non-executive director.

Suki Jandu joined the Executive Committee in November 2021 as Executive
Director - Housing Services.

Oliver Boundy joined Anchor as Executive Director - Development in January
2022. Oliver replaced Mark Curran who retired at the end of 2021.

In line with our wider commitment to equality, diversity and inclusion, during
the year we committed that, through executive and non-executive succession
planning, we would maintain Board diversity by ensuring that from 1 April 2022
onwards at least half of all Board and Executive Committee roles are filled
by women, members of the LGBTQ+ community, individuals of Black, Asian, Mixed
or ethnicities other than White British and/or individuals who identify as
having a physical or mental disability or impairment.

 

 

Anchor annual report and financial statements 2022

All comparatives are to Anchor's consolidated audited year end results to 31
March 2021.

 

 Group Statement of Comprehensive Income
 Figures in £m                                     31 March 2022         31 March 2021
 Turnover from ongoing operations                  493.5                 482.6
 Turnover from property sales                      32.7                  45.6
 Turnover                                          526.2                 528.2
 Operating costs from ongoing operations           (443.9)               (451.4)
 Cost of Sales - property sales                    (28.6)                (32.6)
 Surplus on disposal of fixed assets               0.3                   3.7
 Operating Surplus before exceptional items        53.8                  47.9
 Net interest costs                                (28.4)                (17.8)
 Refinancing costs                                 -                     (40.3)
 Taxation                                          0.8                   (0.2)
 Surplus / (deficit) for the period                24.4                  (12.0)

 Operating margin excluding property contribution  10.1%                 6.5%
 Operating margin before exceptional items         10.2%                 9.1%
 Operating margin                                  9.9%                  8.8%
 EBITDA MRI(1)                                     64.8                  56.2
 EBITDA MRI - Interest cover(2)                    2.6x                  2.4x

 

1.  Group operating surplus including property proceeds less Amortisation of
social housing grant, less Government capital grants taken to income, add back
Depreciation and Impairment attributed to Retirement housing to let and
Residential care homes, less improvements to existing properties capitalised

2.   EBITDA MRI including property proceeds, divided by Interest and
financing costs less Interest receivable

 

 Group Statement of Financial Position
 Figures in £m              31 March 2022        31 March 2021
 Tangible fixed assets      1,200.5              1,227.4
 Other investments          0.8                  2.6
 Total long-term assets     1,201.3              1,230.0
 Properties held for sale   205.2                146.6
 Cash                       83.9                 150.2
 Other current assets       44.4                 54.0
 Total current assets       333.5                350.8
 Loans                      (501.9)              (538.4)
 Finance lease obligations  (98.1)               (99.4)
 Grants                     (231.9)              (245.3)
 Pension liabilities        (8.2)                (12.9)
 Other liabilities          (122.7)              (142.8)
 Total Liabilities          (962.8)              (1038.8)

 Total net assets           571.9                542.0

 Reserves                   571.9                542.0

 Gearing(3)                 21.4%                20.5%

 

 

3.   Net debt divided by historical cost of completed properties

 

 

Anchor Hanover
Group

Derya Filiz

Head of External Communications

The Heals Building Suites A & B, 3(rd) Floor

22-24 Torrington Place

London

WC1E 7HJ

07713085004

derya.filiz@anchor.org.uk

communications@anchor.org.uk

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