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Bromford narrowly misses development target for second year as post-tax surplus rises 5%
Bromford has recorded a post-tax surplus of £67m for 2023-24, a rise of 5% from £64m the previous year, as it narrowly missed its development target for a second year in a row.
In its trading update for the last financial year, the 47,300-home landlord also revealed a boosted turnover of £314m, up from £290m in 2022-23, as well as a slight drop in new affordable home completions.
The Tewkesbury-headquartered housing association completed 1,191 new affordable homes in 2023-24, almost half (551) of which were for social rent. The figure represented a slight fall of 6% from the 1,265 affordable completions recorded in 2022-23.
It also meant that Bromford missed its annual housebuilding target for two years in a row. The landlord had hoped to complete 1,200 homes by March 2024.
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Operating surplus for 2023-24, excluding asset sales, stood at £95m – up from £91m the previous year. Eighty-five per cent of turnover came from social housing lettings.
Net arrears rose to 4.9%, up from 4% in 2022-23, and asset gearing rose to 41% from 40% the previous year.
Paul Walsh, chief finance officer at Bromford, said: “We knew this year would be a challenge with cost inflation exceeding the rent cap, and we maintained our focus on driving efficiencies.”
He said the association invested an additional £3m in repairs year on year, which “has driven the shortfall in net surplus compared to budget”.
The overall operating margin reduced slightly year on year from 31% to 30%, which Mr Walsh explained was “largely a consequence of the lower margins seen on the first tranche sale of shared ownership homes”. This figure fell to 21% in 2023-24 from 26% in 2022-23.
Shared ownership sales margins were, however, “significantly better than budgeted”, Mr Walsh said. This helped generate £2m additional sales surplus, “partially offsetting” other cost pressures.
The trading update said that Bromford continued to pursue “ambitious” development aspirations, with a goal to build 11,000 new homes by 2032.
In 2023-24, one in eight new homes were delivered in-house, the landlord said, and “we expect this to rise to one in five as we continue to buy land and pursue in-house delivery”.
The update added: “Our focus continues to be on shared ownership, where we see significant demand in our core geographies.”
Robert Nettleton, chief executive officer at Bromford, noted the landlord had 20 complaints upheld by the Housing Ombudsman during the financial year, including five for serious maladministration. These were for repairs and complaint-handling.
He said: “We recognise the ongoing challenges and continue to make improvements through key learnings.
“Looking ahead, we will continue to deliver our Bromford strategy 2023-2027 and build on our core strategic pillars of place, scale and impact.”
Bromford has secured a number of financial deals in the past six months, including a £75m loan in February with a key performance indicator-linked to reducing repairs, which it said was a sector first.
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