Midland Heart reports record £47.8m surplus

News17.09.183.45 PM by Rhiannon Curry

Midland Heart made a record surplus of £47.8m last year, as its operating costs fell sharply amid a money-saving programme.

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The organisation will continue to implement its ‘Fit for the Future’ programme which is now in its third year. The programme is intended to save money for the organisation to protect against cuts while improving its services.

Costs fell from £140.2m to £124.9m – a reduction of almost 11% in the year.

This saw its operating margin – the percentage of income left after day-to-day expenditure – rose sharply to 39.2%, up from 33.8% a year previously.

Turnover was £193.5m, a reduction of £12.5m (6.1%) from the previous year, which the company attributed to a reduction in the amount of income from care contracts and a 1% fall in rents across its housing portfolio. It offloaded its mental health and learning disability contracts to other providers during the 12-month period.

Of its turnover, £172.4m was from social housing lettings, slightly less than the previous year, while £6m came from shared ownership and £10.9m from the remaining care contracts. The rest of the revenue was raised from housing sales, marketed rented housing and other social homes.

Meanwhile, its customer satisfaction rating was one of the highest it had ever recorded, at 92% for repairs and 86% overall. But its rent arrears jumped from just over £5m in 2016/17 to £6.1m in 2017/18.

The company said its priorities for the coming year were building as many homes for affordable and social rent as possible, and would be committing its surplus plus an extra £10m to do this. At the end of March, the company had cash and loan facilities worth around £180m to invest.

During 2017/18, Midland Heart completed 304 new homes and had a further 647 in construction when the year ended on 31 March 2018.

Glenn Harris, chief executive of Midland Heart, said: “During the course of the year, there has been a notable shift in policy, putting affordable housing at the heart of the government’s agenda.

“By putting the organisation on a strong financial footing, we are now in a position to drive this agenda forward, developing as many affordable homes as we can and continuing to invest in our existing homes to ensure that our customers benefit from a first-class landlord service.”