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Anchor back in surplus despite cost hit after contractor went bust
Specialist provider Anchor is back in the black despite incurring £2.4m in extra costs after the main contractor on a development went into liquidation.
The 48,000-home landlord, which also operates 114 care homes, reported a post-tax surplus of £24.4m in the year to the end of March 2022. It followed a £12m deficit the previous financial year due to interest and financing costs.
However, Anchor’s latest accounts showed its surplus was knocked by a contractor going into liquidation as it had to pay for defect costs.
“The £2.4m is a combination of cost for remedial work on recently completed homes that would otherwise have been recovered from the contractor, and the cost of a new contractor stepping in to finish a scheme that was close to completion,” the landlord said.
“Another contractor with whom we have a strong relationship stepped in to complete the scheme with a relatively short delay.”
The provider’s turnover was £526.2m, which was broadly flat year-on-year.
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Anchor, which was formed from the merger of Anchor Trust and Hanover Housing Association in 2018, updated its business plan last year in which it committed to deliver 5,700 new homes over the next decade. This will be a mix of shared ownership, affordable rent and market sale.
Since 2019, the landlord has completed 305 homes, with 737 in construction, and an approved pipeline of 1,580. Anchor said this puts it ahead of where it planned to be by this stage of its plan.
In addition, its accounts showed that it will take two years to catch up with delayed maintenance works as a result of the pandemic.
Anchor told Inside Housing that it has brought forward some works to fill in gaps in the programme and is confident that it can manage the impact of inflation on planned works.
However, it admitted that it is looking to mitigate the issues of labour shortages in the sector in the short and long term.
Sarah Jones, chief executive of Anchor, who has taken over from the long-serving Jane Ashcroft, said: “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 focused on continually improving the homes we provide.”
Ms Jones said the cost of living crisis and rising energy costs in the UK was “central to its thinking” as the landlord seeks to ensure its tenures and services remain affordable and represent value for money.
Elsewhere, the accounts showed Anchor’s net debt rose 6% to £516.1m. Gearing stayed low at 21.4%.
Last week, the association announced it has agreed a deal to acquire Halcyon Care Homes, which operates 11 residential care homes in the East Midlands and South of England.
The move is part of Anchor’s plan to further expand its portfolio and once completed will take the number of residential care homes it operates to 125.
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