Page 11 - Housing Solutions Annual Report
P. 11
The Group has prepared the accounts in GROUP DEBT
accordance with UK Generally Accepted Accounting The Group borrowed a total of £19.7m during
Practice (UK GAAP) including Financial Reporting the year.
Standard 102 (FRS 102) and the Housing SORP
2018: Statement of Recommended Practice for At the year-end Group borrowings amounted to a
Registered Social Housing Providers and complies nominal amount of £301.2 million. Gross gearing,
with the Accounting Direction for Private Registered calculated as total loans as a percentage of the
Providers of Social Housing 2019. Statement of Financial Position value of completed
housing property, was 56% at 31 March 2020 (2019:
HOUSING PROPERTIES 60%). Cash held at 31 March 2020 was £14.9 million
At 31 March 2020 the Group owned 5,806 social compared to £22.6 million at 31 March 2019. Net
housing properties including 683 care home units Debt per Unit at 31 March 2020 was £61.5k against
(2019: 5,625), own and manage 75 market rent the covenant of £70.0k.
properties, and maintain 1,412 properties for other
partner organisations. Totally 7,306 properties that The Group is borrowing principally from banks
we own, manage and maintain. There were 203 and through private placements, at both fixed and
completions in the year. floating rates of interest. Embedded interest rate
swaps are in place to generate the desired interest
The Board appointed external professional valuers profile and to manage the Group’s exposure to
to undertake the annual valuation of the Group’s interest rate fluctuations. The Group’s policy is to
housing properties as at 31 March 2020. The value keep between 65% and 85% of its borrowings at
of the properties, on an existing use for social fixed rates of interest and to maintain an average
housing basis except the care homes which are tenor no less than 10 years.
valued at market value subject to tenancy, is £538
million and this has been reflected in the valuation At the year-end, 79% of the Group’s borrowings
of properties in the financial statements were at fixed and index linked rates after taking
account of interest rate swaps (2019: 81 per cent).
Our investment in new properties totalling £27m and The fixed rates of interest range from 3.28%
our further investment of £7.1m in the maintenance including loan margin to 6.16%. Our all-in average
of existing properties this year was funded through a cost of funds was 4.32%.
mixture of debt finance and operating surpluses.
The Group’s lending agreements require compliance
CASH FLOWS with a number of covenants. The Group’s position is
We generated £20.6m from operating activities monitored against those covenants on an on-going
and borrowed a further £19.7m to develop new basis and reported to the Board at each meeting.
properties, with debt servicing totalling £14.2m. The Group funding committee regularly reviews the
The spend on new properties during the year was Group’s treasury position including requirements for
£27m. Cash inflows and outflows during the year are new loan facilities. The Group is compliant with its
shown in the consolidated statement of cash flows loan covenants at the year end date and the Board
(page 51). expects to remain compliant in the foreseeable
future. The Group borrows and trades only in sterling
and so is not exposed to currency risk.
Maturity 2020 2019
£m £m
Within one year 7.5 7.5
Between one and two years 7.6 7.5
Between two and five years 51.2 20.3
After five years 234.9 253.8
Total 301.2 289.1
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16645.02 HS Annual Report 86pp A4 v10.indd 11 10/11/2020 13:34
