TIDM63SQ
RNS Number : 3072Z
Beyond Housing Ltd
13 September 2022
Click on, or paste the following link into your web browser, to
view the associated PDF document.
http://www.rns-pdf.londonstockexchange.com/rns/3072Z_1-2022-9-13.pdf
Co-operative and Community Benefit Society registration number:
RS007814
Regulator of Social Housing registration number: LH4401
Beyond Housing Limited
Report and financial statements
for the year ended
31 March 2022
Page
Contents
Officers and professional advisers 1
Strategic report 2
Statement of the board's responsibilities for the
report and financial statements 32
Independent auditor's report 34
Group statement of comprehensive income 41
Association statement of comprehensive income 42
Group statement of financial position 43
Association statement of financial position 44
Group statement of cash flows 45
Group statement of changes in reserves 46
Association statement of changes in reserves 47
Notes to the financial statements 48
Board members
J D Hayward (Chair)
P A Baren (Senior Independent Director)
K Abson
A F C Gambles (Retired - 23 September
2021)
S D Hardwick
J E Jones (Retired - 23 September
2021
R Du Rose (Chief Executive)
G Taylor
J P Williams
S D Williams
F Yeomans
Executive leadership team
R Du Rose (Chief Executive)
K Hanlon (Chief Finance Officer)
S Rawson (Chief Operating Officer)
Company Secretary
L Peacock
Registered office
Brook House
4 Gladstone Road
Scarborough
North Yorkshire
YO12 7BH
Auditor Principal Solicitors Principal Bankers
BDO LLP Devonshire's Solicitors Natwest Bank Plc
Chartered Accountants LLP 1 Trinity Gardens
3 Hardman Street 30 Finsbury Circus 2(nd) Floor, Broadchare
Manchester London Newcastle upon Tyne
M3 3AT EC2M 7DT NE1 2HF
The board presents its annual report and audited consolidated
financial statements for Beyond Housing for the year ended 31 March
2022.
The consolidated financial statements include the results of
Beyond Housing Ltd, for the year ended 31 March 2022. They also
include the results of its subsidiary companies Beyond Housing
Developments Limited and Beyond Housing Sales Limited.
Principal activity
The group's principal activity is the provision and management
of housing and associated services to people in housing need.
Group structure
On 31 March 2022 Beyond Housing (the 'group') comprised the
following entities:
-- Beyond Housing Limited (BHL)
-- Beyond Housing Developments Limited (BHDL)
-- Beyond Housing Sales Limited (BHSL)
Beyond Housing, the parent is a:
-- Community Benefit Society (CBS) registered under the
Co-operative and Community Benefit Societies Act (2014), is
regulated by the Financial Conduct Authority (FCA)
-- Registered and regulated by the Regulator for Social Housing (RSH).
BHDL and BHSL are both limited companies and are wholly owned
subsidiaries of Beyond Housing.
Within this report and the financial statements, the
consolidated financial position is referred to as 'group' and the
parent entity financial position is referred to as
'association'.
An introduction from the Chair of the Board
Once again, Beyond Housing has experienced a challenging and
rewarding year and I am pleased to introduce the 2021/22 annual
report and accounts. As we emerged from the Covid-19 restrictions,
the business has been able to re-focus on improving the quality of
our homes, started to enhance key services, and prioritised helping
customers through the continued economic challenges. In addition,
we became the first housing association to secure a long-dated
sustainability bond of GBP250m, allowing us to take advantage of
the lower rates of borrowing to support our longer- term plans and
strategy for Beyond Housing.
The majority of 2021/22 was still a challenging time in terms of
covid infection rates, social distancing and the impact on overall
resources and I thank both customers and colleagues for working
together and remaining resilient and supportive throughout. Our
overall business performance to the year end 31 March 2022,
achieved a group turnover of GBP76.5m and operating surplus of
GBP17.1m. Construction delays, reducing repairs backlog from 2020
and the increases in component pricing and contracts resulted in a
reduced operating margin of 20.9%
Supporting customers remains the key priority, especially given
the cost-of-living crisis and inflationary pressures the country is
facing. Once again, we supported customers with Universal Credit
and other benefit claims, helping them to protect/increase their
income and pay their rent. Beyond Housing collected 99.7% of rents
and helped customers claim GBP1.86m of benefits. We supported 37
apprentices during the year, 10 of which took up full time
employment with us. In addition, we helped 112 people into work
through our dedicated employment programmes and invested circa
GBP2m into community initiatives.
Our commitment to new homes continues and in 2021/22 we exceeded
our Homes England affordable homes programme targets, achieving 318
starts, 142 completions and claimed GBP2.6m of grant. A total of
142 affordable homes were completed, 117 for rent, 2 outright sale
and 23 for shared ownership. We launched our new sales brand, Viola
Homes, for open market sales and contracted our first off-gas,
modular development.
Alongside completing 67,000 routine repairs, we invested a
further circa GBP8 million of capital on existing properties,
including major programmes in Redcar and Scarborough. Our capital
programme included installing 110 boilers, refitting 320 homes with
new windows, installing 320 kitchens and 140 bathrooms, re-roofing
80 homes and completing 60 re-wires.
The launch of a new brand for our independent living services
was another major milestone. Reach & Respond launched at the
end of 2021 and proudly supports customers to live independently in
their own homes, using assistive technology and a responder
service. The service also received accreditation with the Telecare
Services Quality Standards Framework.
Whilst a large proportion of colleagues continued to work
remotely during 2021, we were able to complete our values programme
for all c700 colleagues - allowing them to consider how to maintain
an optimum mindset and live our values of accountable, considerate,
collaborative, and ambitious. The most recent overall colleague
engagement survey (May 2022) shows that 78% of colleagues think
Beyond Housing is a good place to work. We were pleased to be
awarded a Better Health at Work award (silver) and very proud to be
named in the top 100 most inclusive places to work.
Our risk environment changed to focus more on the challenges of
inflationary increases and the impact for customers, service
delivery and our new home programme. In addition, we prepared for
the changes in regulation, particularly those relating to building
and fire safety requirements. The organisation received the Royal
Society for Prevention of Accidents (RosPa) Gold Award for the
ninth year running.
We very much enjoyed collaborating with our key stakeholders
across Teesside and North Yorkshire, to support their overall
strategic plans, and very proud to support homelessness initiatives
in both regions. In addition, we worked with Tees Valley Combined
Authority and other providers to achieve a successful bid for
decarbonisation funding.
In 2022/23, our priority is the overall customer experience and
improving customer satisfaction. Implementing a new repairs service
offer, increased self-service for customers and new technology to
support better and timely communication are all key priorities.
Plans for 2022/23 include further investment in our existing
homes/places and the continuation of major regeneration works at
Church Lane North in Redcar. We will continue to deliver against
our plan of delivering 2,000 homes and incrementally increase our
investment towards carbon zero.
I know that 2022/23 has different challenges, both politically
and from a housing perspective; changes to funding, consumer
regulation and the wider economic conditions will pose difficulties
for customers, colleagues, and the wider business. We are already
preparing for how we can mitigate or reduce the risks such
challenges pose and remain committed to our strategy and the
customers we serve.
As always, the Board and all colleagues at Beyond Housing,
continue to strive to help our customers and communities succeed
and thrive, and I am proud to recognise our achievements during
2021/22.
James D Hayward RD
Chair
Overview of Beyond Housing and our 2020-2025 strategy
Beyond Housing was formed in October 2018 as the result of a
merger (via transfer of engagements) between Coast & Country
Housing, based in Redcar, and Yorkshire Coast Homes, based in
Scarborough. We remain a G1/V1 Regulator Social Housing rated
organisation.
As a registered Community Benefits Society (CBS), we have a
group turnover of GBP76.5m, own and manage 15,113 homes across nine
local authorities in the north-east/yorkshire, housing over 30,000
customers. We employ circa 700 colleagues and offer homes for rent
and sale, including shared ownership.
We also undertake a wide range of activities to improve the
lives of our customers, including our Independent Living Services
(ILS) 'Reach and Respond' (formerly HomeCall, Lifeline and
Coastcall), which support older and vulnerable people to live
independently in their homes for longer.
As a business we aim to deliver on our purpose and mission. We
launched a new five-year strategy in April 2020 with clear
objectives and ambitions for our services, homes, place and
people.
We are investing in good quality homes and services for people
in housing need and for the communities we work with. This year we
have achieved a lower net surplus before tax of GBP2.5m (GBP12.5m
2020/21), the decline was due to one off refinancing costs of
cGBP7.1m and higher repairs volumes. We invested GBP36.8m in new
homes and GBP33.9m revenue spend in our existing properties
(routine/planned maintenance and major repairs).
Our five-year strategy
Our strategy is based on four strategic objectives:
-- Provide quality services to our customers - increase customer
satisfaction, grow our ILS business and have 55% of our customers
registered using our 'Me and My Home' digital services.
-- Build new homes and keep our existing home in good condition
- build circa 2,000 new homes, increase customer satisfaction with
the quality of our homes and repairs satisfaction and improve the
Energy Performance Certificate (EPC) ratings for all our properties
to EPC C or better by 2030.
-- Invest in our communities/neighborhoods to create a great
place to live and work - offer the best information and advice to
customers, be a leading training provider and create neighborhood's
our customers are proud of.
-- A great place to work for our people - achieve Investors in
People (IIP) accreditation, deliver an agile working environment,
increase colleague satisfaction and improve the health and
wellbeing.
We intend to target year on year improvements in our business
and services. These include investing more in our homes,
neighborhoods and communities through high quality repairs and
planned capital programs. We intend all properties to be energy
efficient by 2030 at EPC C or better. In 2021/22 we commenced our
113 home outright sale Mill Meadows development and the
regeneration of Church Lane, North Estate in Eston with a budget to
invest circa GBP16m into delivering this regeneration project. We
will continue to invest in our digital infrastructure e.g., 'Me and
My Home' and new Customer Resource Management (CRM) system.
In May 2021 we completed the refinancing of our business to
secure longer term funding for our five-year strategy and beyond.
We issued the first long dated 30-year Environmental, Social and
Governance Bond (ESG) for GBP250m. At the time of issuing, we were
five times oversubscribed in the market. Moody's issued a A2 rating
at the time of issuing the bond and we retained that rating in
February 2022. We drew down GBP165m of funding to refinancing
cGBP130m of existing bank loans to take advantage of very low
financing costs, reducing our interest finance costs and released
cGBP30m of additional cash after break costs. We still retain
GBP85m of funding that is un-drawn, and we are assessing a drawdown
of these funds in 2022/23.
Our operating margin will improve by 2030 in line with our
business plan to drive greater efficiency and cost saving to allow
more investment in homes and to address zero carbon challenges. We
will continue to deliver on our 2,000 new homes under our current
strategy providing affordable homes across our area of operation.
We will also look at those areas that may require future
regeneration, higher zero carbon investment and continue to build
more homes.
Corporate governance
The board comprises of nine members, made up of 56 % women and
44% men. None are classed as BAME. Members can be viewed on page 1
and 8-9. Board members are drawn from a wide range of backgrounds
bringing together commercial, professional and local skills,
experience and knowledge.
An annual compliance assessment is undertaken by the board of
its chosen code of governance. This assessment is reviewed and
validated externally by independent consultants every three years
(first assessment carried out in 2021/22). Accordingly, the board
states Beyond Housing (the parent) are fully compliant with its
adopted code of governance, the National Housing Federation (NHF)
Code of Governance 2020. The board has determined the NHF Code of
Governance 2020 does not apply and therefore is not adopted by the
subsidiary companies Beyond Housing Sales Ltd, and Beyond Housing
Developments Ltd, on the basis the companies are not registered
providers and therefore out of the scope of the Code. The
subsidiary companies continue to operate within the overarching
governance framework of Beyond Housing's structure with the Beyond
Housing board retaining control and oversight of the subsidiary
companies.
Beyond Housing complies with the Regulator of Social Housing's
(RSH) Governance and Financial Viability Standard. Self-assessments
against all of the regulatory standards were undertaken during the
year and no issues were noted.
An independent governance review was undertaken in the year
providing assurance that governance arrangements were operating
well and efficiently. It noted the board had provided a strong
self-assessment of its own effectiveness which correlated with the
independent review opinion. A number of recommendations were made
as part of the review to support the delivery of Beyond Housing's
future strategy and ambition which have been implemented during the
financial year. The board has overall responsibility for the
administration of sound corporate governance throughout the group
and recognises the importance of maintaining a strong reputation
for the group.
The Board met formally five times during the period 1 April 2021
and 31 March 2022 and held two strategic away days. The Board and
committees have formal terms of reference which were last reviewed
during 2021/22.
Audit and risk committee
The audit and risk committee are responsible for ensuring a
sound system of internal control and risk management is embedded
across the group. The committee exercises oversight of the internal
and external audit functions. The committee met five times during
the period 1 April 2021 to 31 March 2022. Board member John
Williams chaired the meetings.
Governance and review committee
The governance and review committee are responsible for board
director succession planning, recruitment and selection of
non-executive directors, board training and development, ensuring
the appraisal and remuneration of the chief executive is carried
out and for addressing any conduct or standards issues. The
committee oversees and reviews governance arrangements to ensure
that best governance standards and practices are upheld, with
particular oversight in relation to statutory and regulatory
changes. The committee met four times during the period 1 April
2021 to 31 March 2022. Board member Sam Hardwick chaired the
meetings.
Health and safety committee
The health and safety committee oversees the health and safety
framework and management system which enhances clarity around
roles, accountability and responsibility throughout the
organisation, provides enhanced focus for customer, property and
colleague compliance and increases visibility around performance to
provide asset compliance assurance. The committee met four times
during the period 1 April 2021 to 31 March 2022. Board member Kate
Abson chaired the meetings. As part of the independent governance
review in 2021/22, whilst retaining strategic oversight of the
health and safety framework, board delegated operational oversight
to the executive via a health and safety forum. The health and
safety committee therefore ceased on 31 March 2022.
Refinancing task and finish group (committee)
The refinancing task and finish group had oversight for the
refinancing of the business completed May 2021. The committee
oversaw the proposal to raise the GBP250m long term Environmental
Social Green (ESG) bond and to restructure existing loan
arrangements with our funders Lloyds, Nationwide and Natwest. We
exited high interest cost loans and replaced them with the lower
cost bond and released additional cash for investment. The
committee met once during the period 1 April 2021 to March 2022.
Board member Peter Baren chaired the meeting.
Board and committee meetings
The table below dates all board and committee meetings.
27 May 2021 12 May 2021 15 April 2021 21 June 2021 22 April 2021
--------------- ---------------- ---------------- ----------------
5 August 2021 27 July 2021 8 July 2021 16 September
2021
--------------- ---------------- ---------------- ----------------
23 September 18 August 14 October 16 December
2021 2021 2021 2021
--------------- ---------------- ---------------- ----------------
28-29 October 17 November 20 January 17 March 2022
2021 (strategic 2021 2022
away days)
--------------- ---------------- ---------------- ----------------
2 December 16 February
2021 2022
--------------- ---------------- ---------------- ----------------
3 February
2022
--------------- ---------------- ---------------- ----------------
28 February
2022 (strategic
away day)
--------------- ---------------- ---------------- ----------------
Board and committee attendance 2021-22
A B A B A B A B A B
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Kate Abson 5 5 - - - - 4 4 -
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Peter Baren 5 5 5 5 - - - - 1 1
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Andrew Gambles* 3 1 - - - - 2 0 -
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Samuel Hardwick 5 5 - - 4 4 4 4 - -
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
James Hayward
(Chair) 5 5 - - - - 4 3 1 1
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Judith Jones * 3 3 - - 2 2 - - - -
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Gillian Taylor 5 5 5 5 - - - - 1 1
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
John Williams 5 4 5 5 - - - - 1 1
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Steven Williams 5 5 5 5 4 4 - - - -
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Fay Yeomans 5 5 - - 4 4 - - - -
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Rosemary Du Rose 5 5 5 5 4 4 4 4 1 1
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
A = maximum number of meetings that could have been attended
B = number of meetings attended
* retired 23 September 2021
Viability assessment
Beyond Housing prepares a 30-year business plan 'Plan',
incorporating the 2021/22 budget, treasury, asset and development
plans and financial assumptions over the medium term. The long-term
financial plan to demonstrate it can effectively manage its
resources and ensure long term financial stability is maintained
and social housing assets are safeguarded.
Beyond Housing has approved and stress tested the current plan
using multi-variant analysis which tests against potential economic
and business risks. The board held a stress testing workshop in
September 2021 and February 2022.The results of the stress testing
included considering the impact of movement in interest rates,
liquidity, inflation, costs, debts, political risk, Covid 19,
welfare reform, sales risk and a single/multi-variant risk scenario
with mitigation plans. The board also identified actions to
mitigate against these risks (including Covid 19), quantified
through the stress testing and is satisfied these mitigations would
be implemented, if the need arises to protect the social housing
assets and to maintain compliance with regulatory requirements.
We also completed our refinancing in 2021/22 that culminated in
the issuance of a GBP250m ESG bond in May 2021. We drew down
GBP165m and retained GBP85m whilst restructuring our existing loans
with our three bank lenders.
The 30-year business plan and Financial Forecast Return (FFR)
submission to the Regulator Social Housing (RSH) was approved by
the board in May 2021.
Internal controls
The board acknowledges its overall responsibility for
establishing and maintaining the whole system of internal control
and for reviewing its effectiveness across the Group.
The board recognises that no system of internal control can
provide absolute assurance or eliminate all risk. The system of
internal control is designed to manage, not eliminate, risk and to
provide reasonable, not absolute, assurance against material
misstatement or loss.
The process for identifying, evaluating and managing significant
risks faced by the Group has been in place throughout the year
ended 31 March 2022 and up to the date of the approval of these
financial statements.
The board has received the Chief Executive's annual review of
the effectiveness of internal control which concludes that there is
sufficient evidence to confirm the operation of adequate systems of
internal control and that these systems are aligned to the on-going
process of managing the significant risks faced by the Group.
Key elements of the Group's internal control framework
include:
-- Board approved terms of reference for board and committees
-- Strategic risk registers regularly reviewed by the senior
leadership team, board and the audit and risk committee
-- Policies and procedures in place for the Group's operating activities
-- A corporate and planning process with supporting financial
information, including long term business plans and annual
budgets
-- An Investment Appraisal Panel and Programme Steering Group,
aligning our project activity with corporate objectives
-- A business case and appraisal framework established to
support robust investment decision-making
-- Business assurance and internal audit functions (provided by
PwC) tasked with maintaining and testing the Group's control
environment
-- Reporting to the senior leadership team and board of key strategic performance indicators
-- Oversight by the audit and risk committee of the Group's internal control processes; and
-- An established health and safety framework.
Housing stock
Beyond Housing operates across the North-East and North
Yorkshire covering nine local authorities. We currently have 15,113
homes for rent, 12 of which are managed by a third party giving us
15,101 owned units (Note 3 in the Accounts) and an additional 291
leaseholder units. A breakdown of the housing stock is:
Houses 8,056 2 262 8,320
========= ===== ====== =========
Bungalows 3,107 1 10 3,118
========= ===== ====== =========
Flats 3,309 65 1 3,375
========= ===== ====== =========
Maisonettes 120 120
========= ===== ====== =========
Bedsits 168 168
========= ===== ====== =========
Total 14,760 68 273 15,101
========= ===== ====== =========
Third party managed 12 15,113
========= ===== ====== =========
Customer experience and outcomes
Across customer service we are proud of what we have achieved
for our customers, communities and colleagues. The pandemic made
for uncertain times, yet we adapted and flexed with the changes to
deliver some great outcomes in the delivery of our purpose and
strategic objectives. Creating a great customer experience is a key
objective and as a result the below was achieved in 2021/22:
-- Introduced a new name and brand for our three independent
living services to operate under - Reach & Respond
-- Supported 506 customers and accessed GBP1.83m in benefits to support customers
-- Answered 161,888 customer enquiry calls
-- Answered 171,675 calls from customers to our independent
living service Reach & Respond
-- Joined The National Databank scheme and launched our digital
inclusion project to bring free internet to low-income families
-- Opened a customer community facility on the Church Lane North estate in Grangetown.
-- Supported 1,211 customers with Anti-Social Behaviour (ASB) and safeguarding support
-- 4,339 hours of volunteers' time invested in community projects and services
-- Consulted with over 1,400 customers to shape a new customer contact approach
-- Successfully embedded a new approach to handling complaints
-- Commenced the implementation of new systems to better improve
the customer experience
Energy performance
We see as good practice reporting out energy consumption in line
with our Environmental, Social and Governance principles. This work
was undertaken by Trident Innovative Energy Experts for Beyond
Housing and is summarised below till 31 March 2022.
Scope 1 - Direct emissions: None
Combustible gases, kerosene
heating oil, Owned vehicles
========================================= =======================================
Scope 2 - Indirect emissions: None
purchased electricity
========================================= =======================================
Scope 3 - Other indirect emissions Employee commuting, emissions
relating to: electricity transmission from hotel accommodation, couriers,
and distribution losses, and and suppliers
private vehicles used for work
purposes
========================================= =======================================
1.768 1.580 1.719
======== ========= ========
1.609 1.544 1.719
======== ========= ========
0 -10.6% -2.8%
======== ========= ========
This year we are pleased to have reduced our carbon footprint
per employee by 2.8% working towards the Governments carbon neutral
targets is set out in more detail in our strategic asset plan
approved by our Senior Leadership Team (SLT).
We were also successful in a bid with Tees Valley Combined
Authority in securing grant from the Government Social Housing
Decarbonisation programme securing funds for our home insulation
programme.
Value for Money
Beyond Housing consciously looks to deliver Value for Money
(VfM) and will take a planned approach to the delivery of
efficiencies and financial capacity gains, which provides direction
for achieving VfM in order to increase investment in our existing
homes and communities and to create new homes.
-- Borrowing capacity - Beyond Housing had in place GBP104m of
Revolving Credit Facility and GBP85m undrawn bond funding capacity
on 31 March 2022.
-- Total cost of management and maintenance of each housing unit
- The target Social Housing Cost Per Unit (SHCPU) for the
organisation is circa GBP3,000 in the medium term as the result of
reductions to management costs and overheads, structural costs,
efficiencies and improved procurement.
-- Delivery of new homes - Our current strategy displays our
plans to build 2,000 new homes over five years.
-- Operating margin - Our operating margin reduced in the year
as our maintenance costs increased as a result of higher repair
volumes and increased material and subcontractor prices.
-- Development - we seek competitive tenders and test the
contracts cash flow, IRR and NPV to meet investment policies.
-- Procurement - Beyond Housing has actively completed
competitive tendering activities to secure long-term contracts for
key business areas including voids, tools, Electrical Installation
Condition Report (EICR's), windows and doors etc. A key contract
has been implemented to support our in-house teams to complete
routine and capital voids works. The tender was structured to
attract local subcontractors and ensure that strong relationships
could be built between the in-house teams and local labour
providers, especially during times of national labour shortages.
Savings to the value of GBP143k have also been achieved through key
negotiations on tool purchases, our security contract renewal and
rate changes. Beyond Housing has been impacted by supply chain
price increases but has looked to mitigate these as much as
possible across the year.
VfM indicators
Beyond Housing has included the nine regulatory VfM metrics from
the RSH Technical Note guidance September 2020 sector scorecard, in
its board KPIs. We benchmark our VfM indicators where appropriate
against a group of comparable housing providers to help understand
our performance and inform our improvement plans and targets.
Performance is measured against the RSH 2020/21 Global Accounts
benchmarking information, due to 2021/22 information not being
available at the time of preparing the annual accounts. During
2021/22 and going forward we will benchmark our VfM indicators, to
support our strategy to embed VfM into everything we do.
RSH VfM Beyond Beyond Global NE^ Global NE^ Global NE^
Metric Housing Housing Upper Upper Med Med Lower Lower
Restated Q Q Q
=========== =========== =========== =========== =========== =========== =========== ===========
Reinvestment 11.8% 6.0% 8.2% 8.1% 5.8% 5.7% 4.0% 3.8%
=========== =========== =========== =========== =========== =========== =========== ===========
New supply:
Social 1.05% 0.64% 2.00% 1.7% 1.30% 0.9% 0.50% 0.50%
=========== =========== =========== =========== =========== =========== =========== ===========
New supply: - - 0.009% - - - - -
Non-social
=========== =========== =========== =========== =========== =========== =========== ===========
Gearing 50.0% 47.5% 53.3% 47.5% 43.9% 42.8% 32.9% 26.6%
=========== =========== =========== =========== =========== =========== =========== ===========
EBITDA MRI 182% 277% 248% 336% 183% 213% 134% 129%
=========== =========== =========== =========== =========== =========== =========== ===========
Social GBP3,787 GBP3,047 GBP4,760 GBP3,680 GBP3,730 GBP3,160 GBP3,210 GBP3,080
housing cost
per unit
=========== =========== =========== =========== =========== =========== =========== ===========
Operating
margin:
Social 21.8% 28.7% 32.6% 28.7% 26.3% 23.1% 22.2% 19.8%
=========== =========== =========== =========== =========== =========== =========== ===========
Operating
margin:
Overall 20.9% 26.9% 28.2% 27.6% 23.9% 23.3% 18.1% 16.0%
=========== =========== =========== =========== =========== =========== =========== ===========
Return on
capital
employed 3.9% 5.8% 4.2% 4.6% 3.3% 3.4% 2.7% 2.8%
=========== =========== =========== =========== =========== =========== =========== ===========
^NE combines average performance for the northeast region and
North Yorkshire based RPs
We have used the 2020/21 financial statements for last year's
figures. Note: Our 5-year VfM targets are published separately on
our web site in our 5 Year VfM Plan.
Definitions:
1. Reinvestment % - Looks at the investment in properties
(existing stock as well as new supply) as a percentage of the value
of total properties held.
2. New supply - Delivered % the new supply metric sets out the
number of new social housing and non-social housing units that have
been acquired in the year as a proportion of total social housing
units and non-social housing units owned at period end. The table
reports on two new delivered ratios. New supply delivered (social
housing units). New supply delivered (non-social housing
units).
3. Gearing % - Measures how much of the adjusted assets are made
up of debt and the degree of dependence on debt finance. It is
often a key indicator of growth appetite. Registered providers can
be restricted by lenders' covenants and therefore may not have the
ability in which to increase the loan portfolio despite showing a
relatively average gearing result.
4. EBITDA - Earnings before interest, tax, depreciation,
amortization, major repairs included (EBITDA MRI) interest cover
measure is a key indicator for liquidity and investment capacity.
It seeks to measure the level of surplus that a registered provider
generates compared to interest payable; the measure avoids any
distortions stemming from the depreciation charge.
5. Headline social housing cost per unit - Assesses the total
housing cost per unit as defined by the Housing Regulator. The cost
measures set out in the metric are unchanged from the metric in the
Regulator VfM technical note 2018. The metric now however includes
lease costs.
6. Operating margin - Demonstrates the profitability of
operating assets before exceptional expenses are deducted.
Increasing margins are one way to demonstrate the improving
financial efficiency of a business. In assessing this ratio,
consideration is given to registered providers' purpose and
objectives (including our social objectives). As a registered
provider we report on two operating margins. Operating margin
(social housing lettings only). Operating margin (overall).
7. Return on capital employed (ROCE) - This metric compares the
operating surplus to total assets less current liabilities and is a
common measure in the commercial sector to assess the efficient
investment of capital resources. The ROCE metric would support
registered providers with a wide range of capital investment
programmes.
Future analysis
Based on our performance, our plans for the coming years will
focus on a number of performance indicators. The Board has agreed
the strategy and performance indicators for 2022/23. This includes
setting approved 'rules' against key indicators to ensure the
financial stability and resilience of the business.
Reinvestment Reinvestment at 11.8% Target Our capital investment
was below target 18.6% 19% 2022/3. plans are to maintain
as development and capital and invest in our
spending was below budget existing stock,
due to Covid 19, supply regenerate Church
constraints, planning Lane, North and
and construction site to develop our carbon
closures. We have continued reduction plans.
to deliver on our 2,000
homes strategy.
=============================== =================== ===============================
New supply: 318 affordable homes 2,000 new Our long-term plan
Social were started in the homes over is to build to a
year with 142 completed 5 yrs. target of circa
against targets of 433 2,000 homes over
and 250 respectively. the next five years.
Starts and completions
were below target, due
to the matters outlined
under reinvestment.
=============================== =================== ===============================
New supply: 113 homes for open market - Non-social homes
Non-social sale were started in will be a small
the year with 2 open proportion of social
market sales in year. homes built circa
15% of the 2,000
target.
=============================== =================== ===============================
Gearing Gearing at 50% remains To keep Gearing will remain
within our target rules below <63%. within funder requirements.
reflecting our refinancing. 2021/22 Beyond Housing rules
55.5%. impose more stringent
targets than those
imposed by the funders.
=============================== =================== ===============================
EBITDA - MRI EBITDA - MRI at 181% To keep The EBITDA (interest
is below target 255% EBITDA cover) has a funder
but well above covenant - MRI (Interest requirement to be
requirements due to Cover) above 110% in all
lower operating margin greater years. In addition,
. than >121%. a more stringent
target has been
set to give an additional
margin above funder
requirements.
=============================== =================== ===============================
Social Housing SHCPU GBP3,787 has increased Long term Our medium-term
Cost Per Unit due to higher material target target is to achieve
(SHCPU) and operating costs circa averaging a costs of cGBP3,000
against the target of GBP3,000. but reviewed annually
GBP3,435 due to inflation GBP3,534 in line with investment
on our costs. 2022/3. needs.
=============================== =================== ===============================
Operating The social operating - The social margin
margin: Social margin fell per the will remain close
explanations under EBITDA to the overall operating
and SHCPU. margin due to housing
rents making up
c92% of income.
=============================== =================== ===============================
Operating The operating margin To raise Our business plan
margin: 20.9% fell against target towards is to have an operating
Overall 25.8% due to higher 30%, 25.3% margin in the Housemark
operating and material 2022/23 top quartile.
costs and repairs volumes
as we exited Covid 19.
=============================== =================== ===============================
Return on Our ROCE at 3.9% fell 4.9% 2022/23. ROCE employed will
Capital Employed against a target of be monitored as
(ROCE) 4.7% as result of the our investment plans
lower operating margin are delivered to
and lower total assets ensure efficient
less current liabilities investment is being
balance sheet position. made.
=============================== =================== ===============================
Other metrics agreed by the board include:
-- Liquidity - current ratio >1.10
-- Security - 15% of all stock buffer to add to funder security valuation ratios
-- Operating surplus - reliance on profits from open market
sales to be limited to 20% within our business plans. By limiting
reliance on profits from open market house sales, focus is on
sustained financial stability
-- Cash flow - holding cash and cash equivalents (loan
facilities) >= 21 months operating cash requirements.
Key performance indicators measuring Value for Money (VfM)
Beyond Housing measure Key Performance Indicators (KPI's) and
VfM. Beyond Housing has a dashboard system that measures a set of
key performance metrics each month. Our dashboard for period 12 can
be viewed on page 19.
The dashboard forms an agenda item at all board meetings; hence
the board can monitor KPI performance and VfM within the
organisation. Board challenge any under performance and discuss the
actions set out to improve performance.
The KPI's are also discussed at the monthly performance and
strategy meetings attended by executive and leadership teams. The
table below shows a sample of year-end metrics (note 2021/22 still
reflected the impact of Covid 19).
VfM movements
Rent arrears (current) GBP2,111,385 GBP2,026,604 $ Rent arrears fell
due to robust customer
support policies
through Covid 19
=============== =============== ==== ============================
Voids levels fell
Level of voids (properties) 184 161 $ due to higher investment
=============== =============== ==== ============================
Average re-let time We improved in year
(days) 43.7 38.2 $ re-let times
=============== =============== ==== ============================
Rent loss due to GBP1,044,606 GBP1,107,609 # With more voids turnover
voids the weekly rent losses
increased
=============== =============== ==== ============================
Staff turnover increased
Percentage of staff due to competitive
turnover voluntary 5.7% 10% # jobs market
=============== =============== ==== ============================
Social housing cost GBP3,047 GBP3,787 # The SHCPU increased
per unit due to higher material
prices and volumes
of work post Covid
19 lockdown
=============== =============== ==== ============================
The operating margin
fell due to higher
operating costs,
material prices and
dealing with repair
backlogs after the
lifting of Covid
19 restrictions.
2020/21 was high
due to Covid restricting
repairs work and
Operating margin 29.1% 20.9% $ spend
=============== =============== ==== ============================
Repairs on time was
Percentage of repairs impacted by Covid
completed on time 96.9% 88.6% $ 19
=============== =============== ==== ============================
Number of working
days lost to sickness Sickness rates increased
per employee 7.7 9.9 # with Covid 19
=============== =============== ==== ============================
Our 2021-22 Tier 1 VfM targets and outturn
Operations Compliance: Gas M PT >= 100.0% 100.0%
====================================== ======= ======
Operations Compliance: Electrical M PT >= 100.0% 100.0%
====================================== ======= ====== =============== =============== ===============
Operations Compliance: Fire
Safety M PT >= 100.0% 100.0%
====================================== ======= ====== =============== =============== ===============
Operations Compliance: Asbestos M PT >= 100% 100.0% 100.0%
====================================== ======= ====== =============== =============== ===============
Responsive repairs transactional
satisfaction M M <= 85.0% 80.0%
====================================== ======= ====== =============== =============== ===============
Assets - Capital Investment Q YTD >= GBP9.8m GBP10.7m
====================================== ======= ====== =============== =============== ===============
New supply: planned model
programme all tenures contractual
starts M YTD >= 433 447
====================================== ======= ====== =============== =============== ===============
New supply: planned model
programme all tenures completions M YTD >= 250 380
====================================== ======= ====== =============== =============== ===============
New supply: financial performance M YTD >= GBP6.3m GBP5m GBP6m
- affordable 5-year programme
average NPV
====================================== ======= ====== =============== =============== ===============
Net profit through outright A YTD >= - - GBP100k
sales
====================================== ======= ====== =============== =============== ===============
Unsold sales homes - build Q YTD >= 0 10 or 20 or less
complete unreserved less
====================================== ======= ====== =============== =============== ===============
Colleague satisfaction A PT >= 80.0% 78.0%
====================================== ====== =============== =============== ===============
Current tenant arrears M PT <= GBP2,026,604 GBP2,300,000 GBP2,200,000
====================================== ====== =============== =============== ===============
Percentage of customer base
registered for Me & My Home M PT >= 33.1% - 30%
====================================== ====== =============== =============== ===============
Customer satisfaction: percentage
of customers 'very' or 'fairly'
satisfied with our services
STAR M YTD >= 75% 75%
====================================== ====== =============== =============== ===============
Complaints: percentage of
complaints responded to within
target timescales M YTD >= 100% 100.0% 100.0%
====================================== ======= ====== =============== =============== ===============
Complaints per 1,000 properties
(monthly average) M YTD <= 1.8 - 2
====================================== ======= ====== =============== =============== ===============
Financial health: cashflow Q YTD >= GBP19.7m GBP21.2m
from operations
====================================== ======= ====== =============== =============== ===============
Financial health: surplus Q YTD >= GBP5.3m GBP1.2m GBP17.8m
before tax
====================================== ======= ====== =============== =============== ===============
Headline social housing costs Q YTD <= GBP3,435 GBP3,534
per unit
====================================== ======= ====== =============== =============== ===============
Operating margin: (overall) Q YTD >= 25.80% 25.30%
====================================== ======= ====== =============== =============== ===============
Cyber security - Reportable
security issues, data breaches
that interrupt the business M YTD = 0 0 0
====================================== ======= ====== =============== =============== ===============
Key: M monthly measure, YTD Year to Date.
Note: throughout 2021/22 Covid 19 continued to have some impact
on our metrics e.g. supply of new homes, customer satisfaction and
inflation on costs and margins. Green are targets met, orange
(within 5% of target) or red >5% outside target.
VfM Self-Assessment
We will publish on our web site a VfM self-statement alongside
the published accounts for 2021/22.
Risk
Managing risk (page 26) is a responsibility of the board and is
fundamental to the management of corporate challenges. Beyond
Housing has put in place a risk management framework that
identifies and plans to mitigate potential risks while exploring
future opportunities. The Audit & Risk Committee undertake a
more detailed review of risks that might affect the viability or
reputation of Beyond Housing.
James D Hayward RD
Chair of the Board
Beyond Housing Ltd
25 August 2022
Structure and business overview - group and association
Beyond Housing, the parent organisation is a charitable
organisation. It is a registered provider of affordable housing
regulated by the Regulator of Social Housing.
Beyond Housing Developments Limited was originally incorporated
(by a legacy organisation) to develop properties for outright sale,
generating surplus for the group to reinvest. It has not been
active during 2021/22. BHD will be dormant in 2022/23.
Beyond Housing Sales Limited was incorporated to carry out
non-charitable open market sales activities generating surplus for
the group to reinvest. It has not been active during 2021/22. In
2021/22 BHS has had new directors appointed, a business plan
approved by board, on-lending facilities established and updated
legal and financial structures to enable trading in 2022/23.
Financial review 2021/22
The group financial results, which have been prepared using
merger accounting principles, show a group turnover of GBP76.5m and
a surplus before tax of GBP2.5m. The operating surplus before tax
is lower than 2021 due to higher repairs and maintenance costs in
year.
Summarised Financial performance:
Turnover 76,521 75,112
========== ==========
Operating surplus 17,184 20,931
========== ==========
Surplus before tax 2,496 12,539
========== ==========
Non-current assets (includes intangible assets) 399,617 371,690
========== ==========
Housing property assets net of depreciation 398,411 370,173
========== ==========
Cash 35,784 24,203
========== ==========
Loans 235,000 200,000
========== ==========
Reserves 118,413 101,880
========== ==========
Investment in new properties during the year 36,786 17,496
========== ==========
Total capital and revenue expenditure on repairs
and improvements 33,879 24,192
========== ==========
Total housing stock managed in units 15,113 15,061
========== ==========
Social rental income as a % of turnover 92.2% 91.4%
========== ==========
Operating surplus per housing stock unit 1,137 1,389
========== ==========
Average loan per unit 15,550 13,279
========== ==========
Reported reserves per unit 7,835 6,764
========== ==========
Operating surplus % of turnover 22.4% 27.9%
========== ==========
Surplus before tax % of turnover 3.26% 16.7%
========== ==========
Interest cover (operating surplus/interest
payable on loans) 1.17 2.49
========== ==========
For the year to 31 March 2022 turnover increased by GBP1.4m
compared to that of the prior year at GBP76.5m (GBP75.1m 2020/21).
During the year our social rents increased by CPI+1% in line
Government's rent policy, arrears were under budget, and we had
increased shared ownership development sale proceeds.
Social housing income remains the largest proportion of our
turnover from operations at 92.2% (91.4% 2010/21). Shared ownership
sales represented 2.3% (3.2% 2020/21) of our turnover. Non-housing
activity including our independent living service represented 3.5%
(4% 2020/21).
Note: the Net Surplus before tax fell due to one off refinancing
break costs of GBP7.2m in 2021/22.
Operating costs increased to GBP59.0m (GBP53.09m in 2020/21) as
a result increased spend on social housing operating expenditure
due to higher maintenance expenditure as repairs volumes increased
as we began to recover from Covid 19.
The majority of our operating costs for the year is social
housing lettings expenditure by the group being GBP55m (GBP48.9m
2020/21). The charts show management and planned/routine
expenditure increased partly a reflection of the Covid 19 pandemic
but also due to inflationary pressures. Major work spends remain
the same as we invested in estate improvement expenditure.
Depreciation showed no change in line with capital investment in
stock and relatively flat new housing numbers.
Our operating surplus decreased to GBP17.2m from the GBP20.9m
achieved in the prior year and largely reflected increased
maintenance expenditure occurring due to increased repair volumes,
and material/subcontractor price increases both of which are an
outcome Covid 19. Our net surplus for the year at GBP2.5m (GBP12.5m
2020/21) reduced compared to 2020/21 due to the higher maintenance
costs but also the incurrence of GBP7.2m loan breakage costs as
part of the refinancing exercise completed in May 2021.
There has been an increase from GBP371m to GBP399m (7.5%) in the
fixed assets housing property values due mainly to property
improvements, completion of shared ownership units and housing
schemes completed.
Cash held on 31 March 2022 increased to GBP35.8m from (GBP24.2m
2020/21) after the refinancing in May. No new loan drawdowns were
required during the 2021/22 year.
Pension provision liabilities decreased to GBP26.0m from
(GBP37.1m 2020/21) following the annual review of the North
Yorkshire and Teesside Pension Funds by the actuaries. The Teeside
Pension schemes had lower asset values to fund the liabilities, and
these are being funded through higher employer contributions.
We met all lender covenants during the year and the net worth
'reserves' of the group increased to GBP118.4m (GBP101.9m 2020/21)
due to the net surplus.
The Accounts 2021/22 also include a prior year adjustment (due
to incorrect intermediate rents from a legacy organisation from
2012) and are restated. The regulator and our funders were made
aware of the adjustment.
Summary loan facility per lender
Beyond Housing loan structure is set out in the table below. The
debt consists of loans from four lenders: M&G (our bond
custodian on behalf of investors being 59% of the portfolio),
Lloyds (7% of the portfolio), Nationwide (20% of the portfolio) and
Royal Bank of Scotland (RBS) (14% of the portfolio). Some GBP320m
of the debt is term loan with an average life of 16.3 years and
GBP104m represents Revolving Credit Facility (RCF). Undrawn
facilities total GBP189m of which GBP104m is Revolving Credit
Facility and GBP85m bond. The high proportion of RCF available
provides liquidity and flexibility for Beyond Housing as it builds
up its development portfolio. The group has currently sufficient
liquidity for its proposed investment programme over the next 2-3
years after completing its refinancing in May 2021. The undrawn
bond proceeds are subject to volatility in the gilt markets and the
cash value can be less than face value. The embedded value of the
debt is close to 3.94% weighted average cost of debt.
HSBC (bond) 165,000,000 - 165,000,000 85,000,000 250,000,000
============== ============ ============== ============== ==============
Lloyds 8,000,000 4,333,333 12,333,333 20,000,000 32,333,333
============== ============ ============== ============== ==============
RBS 28,333,333 - 28,333,333 30,000,000 58,333,333
============== ============ ============== ============== ==============
Nationwide 29,333,334 - 29,333,334 54,000,000 83,333,334
============== ============ ============== ============== ==============
Total 230,666,667 4,333,333 235,000,000 189,000,000 424,000,000
============== ============ ============== ============== ==============
Subsidiaries
Beyond Housing Developments Limited (formerly Coast &
Country Developments Ltd)
During 2021/22 no new construction opportunities for the
organisation have been identified and subsequently the organisation
has remained in a discontinued state. The organisation made a loss
before taxation for the year ended 31 March 2022 of GBP1,000 (2021:
loss of GBP6,000).
Beyond Housing Sales Limited (formerly Coast & Country Sales
Ltd)
The organisation has made a loss before taxation for the year
ended 31 March 2022 of GBP1,000 (2021: loss of GBP5,000) which is
broadly in line with budget expectations. No sales activity
occurred during the year.
Risk and assurance framework
The risk and assurance governance team at Beyond Housing work
with our internal auditors, PricewaterhouseCooper (PwC), to provide
a programme of audits and reviews which underpin the risk and
assurance framework for the board. Our current key risks and
mitigation strategies are set out below.
Health and safety - Non-compliance Health and safety management
with H&S legislation/standards system
: Mandatory training matrix,
Non-compliance job descriptions and role
Unclear or weak processes/systems profiles
Lack of competence Health & Safety Policy and
Poor or ineffective performance annual statement of intent
reporting Health and safety governance
Poor communication framework established
Poor data quality/record keeping Management systems and servicing
Poor or ineffective health & safety cycles
culture Operations compliance KPI
Significant event (e.g., Grenfell monitoring
Tower) Qualified health and safety
Lack of buy in from senior leaders advisors in post
/ board members Health and safety briefings
Poor or ineffective H&S management Accident, incident and near
framework miss reporting
Ineffective crisis management Lessons learned from near
Contractors/3rd parties not following misses/incidents
policies/procedures. Asset management systems
Team structures established
Effective relationship with
relevant stakeholders
Established customer involvement
framework aligned to the tenant
Involvement and Empowerment
Standard
Risk based internal audit
plan.
Building safety action plan
----------------------------------------
Breach of regulatory standards Governance framework, including
or legislative requirements: rules, articles of association,
Poor governance standing orders and financial
Unclear or weak processes regulations
Lack of competence Board training and appraisal
Loss of corporate knowledge processes
Lack of or ineffective delegated Annual board certification
authorities' framework of compliance
Changes to or gaps in structure/process Delegated authorities
Poor communication of legal and/or Risk based internal audit
regulatory obligations plan
Human error Mandatory training matrix
Poor data quality/record keeping Housing/asset management systems
Ineffective systems Intranet utilised for storage
Lack of independent audit/review of operational procedures;
Breach of governance, viability Insurance cover
or code of conduct Data governance processes,
Covid 19 - pandemic - lack of ICT firewalls and security.
skills/resources Annual self-assessment programme
----------------------------------------
Failure to maintain the integrity Business Intelligence team
of data - Suite of data governance processes
Unclear or weak processes for in place and available through
collecting, storing and using intranet
data Regular articles - monthly
Lack of competence (training, messages communicated to colleagues
awareness, skill) Data Protection Officer (DPO)
Changes to or gaps in structure/process appointed
Poor communication of roles and Data protection champions
responsibilities appointed for all business
Human error areas
Poor record keeping Information governance policy
Poor security and access controls established
Poor or ineffective process for Key systems mapped and owners
system upgrades and patch management identified
Cyber or malicious attack Core systems integrated
Fraud/probity Mandatory training
Poor or ineffective culture/accountability Data handbook and communication
Reliance on paper records processes established
Reliance on spreadsheets and databases Privacy notices communicated
holding. to colleagues and customers
ICT firewalls, security processes
in place
Disaster recover/business
continuity plans in place
Off-site archiving contract
in place.
----------------------------------------
Loss of reputation/poor brand Clear brand guidelines
recognition - Marketing and Communications
Ineffective customer involvement team
and engagement framework Crisis communication plan
Inadequate processes to respond in place and aligned to major
to customer enquiries and complaints Incident response plan
Poor service delivery Media awareness training
Inability to consider the customer Emergency Response team established
voice at Board level Customer surveys
Failure to involve customers in Customer Experience team managing
developing and reviewing services complaints and customer feedback
Poor relationships with public White paper review
bodies and Local Authority partners. Customer experience programme
----------------------------------------
Poor, or insufficiently embedded, Colleague involvement in purpose,
culture - mission values and strategy
Lack of clear vision/strategy Performance reporting on people
Poor channels of communication indicators
Inadequate training and development Training budget
opportunities Colleague consultation forums
Dissatisfaction with terms and Employee representatives in
conditions place
Poor quality recruitment processes Quarterly colleague engagement
Lack of change readiness surveys
Ineffective leadership and management Colleague engagement action
that does not role model, promote plans
and live the values Customer Experience team managing
Poor/inconsistent systems/processes complaints and customer feedback
Poor technology and working practices Strategic people plan
Covid 19 - remote working, isolation Colleague conferences
Large percentage of detractors
exist within colleague base
Values are not understood, role
modelled or applied Lack of autonomy
and trust.
----------------------------------------
Ineffective development and regeneration Development and Sales team
plan/programme - Model Development Programme
Failure to agree development appetite (MDP) established development
Inability to identify or act upon KPI on performance dashboard
development opportunities (units committed)
Ineffective stakeholder plans/networks Investment Appraisal Panel
Contractor failure/delays in place for approving all
Poor project management development and procurement
Increased development costs (incl ICT) over GBP100k
Lack of demand within operating Development opportunities
area group and insight framework
Housing market crash established
Limited customer and market intelligence Hurdle rates agreed
Development of the wrong product/tenure Investment Policy, Treasury
type (inc. modular) Policy in place
Poor or inadequate capacity planning Relationships established
Failure of the 21/26 AHP funding with local authority partners
model (Redcar and Cleveland, Scarborough,
Increased costs of delivering Tees Valley Combined Authority)
future homes standard by 2025 Contract management arrangements,
Ineffective group structure for including credit alerts (Dun
sales. & Bradstreet) and due diligence
Planning delays Homes England compliance audits
Tender costs Subsidiaries - Beyond Housing
sales and development.
----------------------------------------
Breach of loan covenants as a Cash flow forecasting
result of Ineffective Treasury Market sales units included
Management - within Business Plan projections
Inflation Borrowing strategy / Treasury
Bank interest rates management
Funders withdrawal from market Monitoring of interest rate
Rent reductions fluctuations and general market
Significant expenditure greater conditions
than income. Risk based annual audit
Investment appraisal panel.
----------------------------------------
Ineffective asset management Asset management/performance
plan - Ineffective strategic asset systems
management plan Regular stock condition surveys
Lack of external validation of House type surveys to inform
stock condition data annual investment programme
Poor system controls on data integrity Adequate budget provision
and quality (e.g., housing and assigned to deliver property
customer data, and asset data) maintenance programmes (based
Failure to meet decarbonisation on decency requirements)
and energy efficiency targets In-house repairs and maintenance
Asset's data not being up to date service to support greater
or integrated with reporting systems control and flexibility
Insufficient investment in stock Acquisitions and Disposals
Incomplete assets and liabilities Policy in place
register Stress areas identified
Lack of single source data (Asset Voids project/internal focus
Management System) to raise standards
Lack of investment in energy efficient Business intelligence around
products. terminations, reasons for
leaving, turnover and demand
Contract management arrangements,
including credit alerts and
due diligence
Health and safety audits.
Stock condition surveys
Bids for carbon zero funding
----------------------------------------
Material loss of revenue Benefit and money advice to
Welfare reform customers
Further changes in government Skilled Finance team and systems
policy in place
Loss of key contracts Prudent assumptions within
Increased competition the business plan
Housing market crash Income Management Policy and
Inability to access cash performance scorecards
Poor financial management. Treasury Management Policy
High Void levels including spread of risk,
Increase poverty and deprivation monitoring of interest rate
levels across our geography fluctuations and general market
conditions
Procurement procedures support
contractual due diligence
Effective relationships with
key stakeholders.
Rent first culture established
Robust stress testing of our
business plan
Initiatives to tackle fuel
poverty and cost of living
----------------------------------------
Liquidity/cash flow pressures Significant cash reserves
- Limited/poor quality oversight in place and access to additional
of financial performance capacity through the merger
Significant and uncontrolled increases Confirming liquidity and flexibility
in costs to respond to external risks
Increased cost of borrowing Refinancing exercise complete
Breach of one or more of our funder Treasury Management Policy
covenants in place
Changes in government policy In-house repairs and maintenance
Major contractor failure service reduces reliance on
UK recession, Brexit, inflation sub-contractors to deliver
Universal Credit, loss of rental repairs and maintenance services
income to customers
Housing market crash. Monitoring of interest rate
fluctuations and general market
conditions
Robust covenant compliance
reporting
Reduce/remove market sales
Monitoring of interest rate
fluctuations and general market
conditions.
----------------------------------------
Increased Pension Liabilities Actuarial review
- Governance arrangements
Increased life expectancy Annual review by External
Redundancies/restructures Audit as part of the year-end
Economic downturn Financial Statements audit
Increased interest rates/inflation Assets & Liabilities Register.
Consolidation within pension scheme
McCloud and GMP contingent liability
risks 2018/19 Financial Statements.
----------------------------------------
Cyber Security - Deliberate, Regular patching of servers
unauthorised or accidental breaches and PC's
of security - Annual cyber security penetration
Lack of training/awareness testing
Human error Security awareness programme
Malicious breach/phishing attack developed
Breach of policy/procedures New technology file systems
Poor/ineffective security controls Local administrator password
(including patch application) solution
Loss of colleagues/key staff. Cyber security awareness updates
provided quarterly
Migration to office 365
Mandatory training
Crisis communication plan
in place and aligned to major
incident response plan.
----------------------------------------
Failure to meet customers' expectations Customer surveys
Ineffective approach to customer Customer Experience team managing
insight, complaints, feedback complaints and customer feedback
and engagement Customer involvement and engagement
Lack of/poor communication plan framework
(for customers and other external Management information and
stakeholders) analytics
Lack of/poor marketing strategy Partnership services
and branding CSAT scores
Lack of understanding of customers Benefit caseworker campaign
wants and needs plan
Poor culture / lack of buy-in Income management support
from staff Overarching customer service
Lack of clear policies/procedures plan
----------------------------------------
Risk scenarios and stress testing
Beyond Housing uses various risk scenarios to stress test the
business with board and to determine where financial, operational
and reputational weaknesses might occur in adverse operating
conditions. This testing influences our internal procedures in
mitigating risks.
The main risks faced by the group and subsidiaries are discussed
by the board and executive team.
Risk is captured on a specific software system and regularly
reviewed by the senior leadership team and updated.
Key risks such as health and safety, financial stability and
data security take a high priority. Significant emerging risks are
also monitored (Brexit, inflation and Covid 19). Risks are analysed
according to their impact and likelihood. Management is focused on
higher impact and higher likelihood risks.
Brexit continues to carry risks that impact on labour, material
costs, government policy and financing. There may also be risks to
the wider UK economy and house prices. These risks were low and
continued to be monitored by the executive team and board in
2021/22.
Inflation has increased significantly towards the end of 2021/22
and represents a risk on material and wage prices that is being
managed through budgets and revised efficiencies.
Prior Period Adjustment The prior period adjustment in this
year's accounts is to reclassify c486 legacy housing association
intermediate rents we discovered were incorrectly classified to
correct to affordable rents and a small number social. The
adjustment captures the rent refund backdated and indexed for all
customers effected and represents the one-off liability to
correctly reset customers their rents to affordable/social from
intermediate from 2012 when they were incorrectly set in a legacy
organisation. The amendment has been discussed with our funders and
the regulator. The prior year adjustment is represented in the
accounts at Note 28.
Covid 19 continued to be a risk in 2021/22. The risks were
monitored at board and at the senior leadership team with weekly
monitoring of the potential risks and operational and financial
impacts to the business throughout 2021/22. Due to the consequences
of Covid 19 the board has evaluated and continued to stress test
the business plan . Effective action plans, including increased
agile working were working well to maintain customer services and
business operations. Our rent arrears out turned-on budget with
very little increase year on year. Voids out turned marginally
above target and the business maintained very robust cashflows
throughout the year. Covid 19 challenges in the market led to lower
operating spend across most areas of the business expect repairs.
Repairs spend was above budget due to higher inflation on material
costs, escalating subcontractor spend and larger volumes of repairs
as customers opened up homes to a backlog of repairs. Inflationary
pressures are expected to continue, and the market remains
challenging for labour, subcontractors and development
opportunities though all have been assessed in setting the 2022/23
budgets. Our development and capital spend was under budget in
2021/22 due to development sites being closed with social
distancing rules and supply issues delaying our own capital works.
These programme of works are rolled forward and future works
reprofiled out to later years.
Recent Events
The impact of the recent economic turbulence, corresponding
inflation, Ukraine war, interest rate increases, and uncertainty
for the supply chain has meant that the executive team and board
have been reviewing revised financial plans for the next five years
more frequently reflecting updated economic information to ensure
Beyond Housing remains a going concern. Our Board's attention to
these forecasts and liquidity levels ensured appropriate scrutiny
in these difficult times. Our modelling included reductions in rent
collected, higher inflation costs on the business, changes to
government rent policies, significant cash requirements for
changing developments or other supplier support and slowdowns in
our development and sales programmes.
This additional scrutiny has delivered some excellent lessons
for the organisation and has proven our financial resilience under
more extreme conditions.
Statement of the responsibilities of the board for the report
and financial statements
The board is responsible for preparing the report and financial
statements in accordance with applicable law and regulations.
Co-operative and Community Benefit Society law and social
housing legislation require the board members to prepare financial
statements for each financial year in accordance with United
Kingdom Generally Accepted Accounting Practice (United Kingdom
Accounting Standards and applicable law). In preparing these
financial statements, the board is required to:
-- Select suitable accounting policies and then apply them consistently
-- Make judgments and estimates that are reasonable and prudent
-- State whether applicable UK accounting standards and current
Statement of Recommended Practice (SORP) for Registered Housing
Providers have been followed, subject to any material departures
disclosed and explained in the financial statements
-- Prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the group and
association will continue in business.
The board members are responsible for keeping adequate
accounting records that are sufficient to show and explain the
group and association's transactions and disclose with reasonable
accuracy at any time the financial position of the group and
association and enable them to ensure that the financial statements
comply with the Co-operative and Community Benefit Societies Act
2014, the Housing and Regeneration Act 2008 and the Accounting
Direction for Private Registered Providers of Social Housing 2022.
They are also responsible for safeguarding the assets of the group
and association and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities. The
board is responsible for ensuring that the report of the board is
prepared in accordance with the Statement of Recommended Practice:
Accounting by registered social housing providers 2018. Financial
statements are published on the group and association's website in
accordance with legislation in the United Kingdom governing the
preparation and dissemination of financial statements, which may
vary from legislation in other jurisdictions. The maintenance and
integrity of the group and association's website is the
responsibility of the board members. The board members'
responsibility also extends to the ongoing integrity of the
financial statements contained therein.
Statement of compliance
The board has sought assurance of the group's compliance with
all regulatory requirements. A key element of the Regulator for
Social Housing, Governance and Financial Viability Standard is the
requirement to comply with all relevant laws. The board has taken
reasonable steps to seek necessary assurance. On this basis the
board confirms that the group complies with the requirements of the
Regulator of Social Housing Governance & Financial Viability
Standard.
Auditor
A resolution to appoint BDO LLP, as auditor for 2022/23, will be
put to the AGM members on 22 September 2022.
Going concern
When preparing their financial results', the board of Beyond
Housing considers whether the association and the group are a going
concern. The directors of the subsidiaries undertake a similar
exercise. Beyond Housing has put together a budget for 2022/23 and
a long-term financial plan together with the associated cash flow
position and a Treasury Management Policy to maintain sufficient
liquidity. The group has in place financial resources to run the
organisation's day to day operations and manage known risks despite
any current uncertainties in the social housing sector. It has in
place long-term debt facilities which provide adequate resources to
finance committed investment and medium-term development
activities. The group has a long-term business plan, which shows it
is able to service these debt facilities whilst continuing to
comply with current lenders' covenants. The business has also
carried out additional stress testing on its business plan as a
result of Covid 19 and market pressures as set out on page 27 to
demonstrate its continuing financial resilience. On this basis the
board has prepared the 2021/22 financial statements on the going
concern basis.
Disclosure of information to the auditor
The board members who were in office on the date of approval of
these financial statements have confirmed, as far as they are
aware, that there is no relevant audit information of which the
auditor is unaware. Each of the board members have confirmed they
have taken all the steps that they ought to have taken as board
members in order to make themselves aware of any relevant audit
information and to establish that it has been communicated to the
auditor.
Strategic report
The board submits its report and the financial statements of
Beyond Housing Limited ('the group') for the year ended 31 March
2022.
By order of the board
James D Hayward
Chair of the Board
Beyond Housing Ltd
25 August 2022
Independent auditor's report to the members of Beyond Housing
Limited
Opinion on the financial statements
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the Association's affairs as at 31
March 2022 and of the Group's and the Association's surplus for the
year then ended;
-- the financial statements have been properly prepared in
accordance with United Kingdom Generally Accepted Accounting
Practice; and
-- the financial statements have been properly prepared in
accordance with the Co-operative and Community Benefit Societies
Act 2014, the Co-operative and Community Benefit Societies (Group
Accounts) Regulations 1969, the Housing and Regeneration Act 2008
and the Accounting Direction for Private Registered Providers of
Social Housing 2022.
We have audited the financial statements of Beyond Housing
Limited ("the Association") and its subsidiaries ("the Group") for
the year ended 31 March 2022 which comprise the Group and
Association statement of comprehensive income, the Group and
Association statement of financial position, the Group statement of
cash flows, the Group and Association statement of changes to
reserves and notes to the financial statements, including a summary
of significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable
law and United Kingdom Accounting Standards, including Financial
Reporting Standard 102 The Financial Reporting Standard applicable
in the UK and Republic of Ireland (United Kingdom Generally
Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Independence
We remain independent of the Group and the Parent Association in
accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC's
Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
Board's use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the Board's assessment of the Group and the Parent
Association's ability to continue to adopt the going concern basis
of accounting included:
-- obtaining management's assessment that supports the Board's
conclusions with respect to the disclosures provided around going
concern;
-- considering the appropriateness of management's forecasts by
testing their mechanical accuracy, assessing historical forecasting
accuracy and understanding management's consideration of downside
sensitivity analysis;
-- obtaining an understanding of the financing facilities from
the finance agreements, including the nature of the facilities,
covenants and attached conditions;
-- assessing the facility and covenant headroom calculations,
and re-performing sensitivities on management's base case and
stressed case scenarios; and
-- reviewing the wording of the going concern disclosures and
assessing its consistency with management's forecasts.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Group and the Parent Association's ability to continue as a going
concern for a period of at least twelve months from when the
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Board with
respect to going concern are described in the relevant sections of
this report.
Overview
Coverage 100% of Group surplus before tax
100% of Group revenue
100% of Group total assets
2022
Key audit matters Accounting for bond issue P
------------------------------------------
Materiality Group financial statements as a whole
GBP1.2m based on 7% of Group adjusted
operating surplus
------------------------------------------
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the
Group and its environment, including the Group's system of internal
control, and assessing the risks of material misstatement in the
financial statements. We also addressed the risk of management
override of internal controls, including assessing whether there
was evidence of bias by the Board that may have represented a risk
of material misstatement.
Audit work on all components was performed by BDO UK both for
the purposes of group reporting and reporting on the individual
financial statements.
The only significant component identified was Beyond Housing
Limited (the Association) based on its size and risk
characteristics.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified, including those which had the greatest
effect on: the overall audit strategy, the allocation of resources
in the audit, and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
Key audit matter How the scope of our audit
addressed the key audit matter
Accounting The Association issued We have obtained all formal
for the GBP250m of listed signed documentation relating
bond bonds in May 2021, to the bond issue from management
issue of which GBP165m were and considered whether the
drawn as at 31 March accounting for the bond is
Note 1 2022, resulting in in line with the terms and
and listed debt obligations conditions of the bond and
19 cover being recognised on FRS 102 at year-end.
the the year-end balance
relevant sheet. We have checked the closing
accounting balance of the listed debt
policy The risk is related at year-end through agreement
and to then compliance to the London Stock Exchange
disclosures of the accounting and performed re-calculation
treatment for this of the bond discount, interest
transaction with the accrued and interest expense
relevant accounting in the year related to the
standard, which if bond to ensure these were
incorrect could give calculated correctly.
rise to a material
misstatement in the We have traced the cash repayment
financial statements. of other loans resulting
from the proceeds received
As this is a non-recurring from the bond issue to bank
and significant transaction statement and other supporting
there is a risk that documentation.
the bond sale has
not been accounted We have considered the classification
for and disclosed and disclosures in relation
correctly and was to the accounting policies
therefore a key audit and key judgements and estimates
matter. relating to the bond in the
financial statements to ensure
they are in line with accounting
standards.
Key observations:
Based on our procedures we
noted no exceptions.
------------------------------- -----------------------------------------
Our application of materiality
We apply the concept of materiality both in planning and
performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which
misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability
that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent
of testing needed. Importantly, misstatements below these levels
will not necessarily be evaluated as immaterial as we also take
account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality
for the financial statements as a whole and performance materiality
as follows:
Group financial statements Parent Association financial
statements
2022 2022
GBPm GBPm
--------------------------------------------- -------------------------------
Materiality 1.2 1.2
--------------------------------------------- -------------------------------
Basis for Adjusted operating surplus as defined by the
determining Group's lending covenants
materiality
--------------------------------------------------------------------------------
Rationale Management reports its performance to key stakeholders
for the benchmark and monitors the business based adjusted operating
applied surplus as defined by the loan covenants.
Based on the toughest loan covenants definition,
depreciation and impairment are added back and
surplus on property developed for sale, capitalised
major repairs and amortisation of grants is excluded.
It is therefore appropriate to adjust materiality
in order to respond to the risk of covenant breach.
--------------------------------------------------------------------------------
Performance
materiality 0.7 0.7
--------------------------------------------- -------------------------------
Basis for Performance materiality is set at 60% of overall
determining materiality. We considered a number of factors
performance including the expected total value of known and
materiality likely misstatements based on past experience
and other factors and management's attitude towards
proposed adjustments.
--------------------------------------------------------------------------------
Reporting threshold
We agreed with the Audit Committee that we would report to them
all individual audit differences in excess of GBP24k. We also
agreed to report differences below this threshold that, in our
view, warranted reporting on qualitative grounds.
Other information
The Board are responsible for the other information. The other
information comprises the information included in the annual
report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information we do not express any form of assurance
conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other
information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on
the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where we are required by the Co-operative and Community Benefit
Societies Act 2014 or the Housing and Regeneration Act 2008 to
report to you if, in our opinion:
-- the information given in the Report of the Board for the
financial year for which the financial statements are prepared is
not consistent with the financial statements;
-- adequate accounting records have not been kept by the Association;
-- a satisfactory system of control has not been maintained over transactions;
-- the Association financial statements are not in agreement
with the accounting records and returns; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of the Board
As explained more fully in the Board members responsibilities
statement, the Board is responsible for the preparation of the
financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the Board members
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the Board are responsible
for assessing the Group and the Association's ability to continue
as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting
unless the Board either intend to liquidate the Group or the
Association or to cease operations, or have no realistic
alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Extent to which the audit was capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
Based on our understanding of the Group and Association and the
sector in which they operate, we identified that the principal
risks of non-compliance with laws and regulations related to their
registration with the Regulator of Social Housing, and we
considered the extent to which non-compliance might have a material
effect on the Group and Association Financial Statements or their
continued operation. We also considered those laws and regulations
that have a direct impact on the financial statements such as
compliance with the Accounting Direction for Private Registered
Providers of Social Housing and tax legislation.
In addition, the Group is subject to many other laws and
regulations where the consequences of non-compliance could have a
material effect on amounts or disclosures in the financial
statements, for instance through the imposition of fines or
litigation. We identified the following areas as those most likely
to have such an effect: data protection and health and safety
legislation.
We have made an assessment of the susceptibility of the Group's
financial statements to material misstatement, including how fraud
may occur. In addressing the risk of fraud through management
override of controls we have tested the appropriateness of journal
entries and other adjustments, in particular any journals posted by
senior management, privileged users or with unusual account
combinations.
Our audit procedures included:
-- Discussions with management and Risk Management & Audit
Committee including consideration of known or suspected instances
of non-compliance with laws and regulations and fraud;
-- Reading minutes of meetings of those charged with governance,
internal audit reports, reviewing correspondence with HMRC and the
other regulators to identify any actual or potential frauds or any
potential weaknesses in internal control which could result in
fraud susceptibility;
-- Reviewing financial statement disclosures and agreeing to
supporting documentation to assess compliance with applicable laws
and regulations;
-- Reviewing items included in the fraud register for any
potential weaknesses in internal control which could result in
fraud susceptibility;
-- Challenging assumptions made by management in their
significant accounting estimates and judgements in particular in
relation to the following:
o Whether indicators of impairment exist
o Recoverable amount of housing properties and properties held
for sale
o Capitalisation of development costs
o Appropriate allocation of costs between tenure types and
between first and subsequent shared ownership tranches
o Useful economic lives of housing property components
o Assumptions used in calculating pension liabilities
-- We performed analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud;
-- We updated our understanding of the Group's current
activities, the scope of its authorisation and the effectiveness of
the Group's control environment.
Our audit procedures were designed to respond to risks of
material misstatement in the financial statements, recognising that
the risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There are inherent
limitations in the audit procedures performed and the further
removed non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less
likely we are to become aware of it.
A further description of our responsibilities is available on
the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities . This description forms
part of our auditor's report.
Use of our report
This report is made solely to the members of the Association, as
a body, in accordance with the Housing and Regeneration Act 2008
and the Co-operative and Community Benefit Societies Act 2014. Our
audit work has been undertaken so that we might state to the
Association's members those matters we are required to state to
them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Association and the members
as a body, for our audit work, for this report, or for the opinions
we have formed.
BDO LLP
Senior Statutory Auditor
For and on Behalf of BDO LLP, Statutory Auditor
Manchester
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
Turnover 2 76,521 75,112
===== =========== ===========
Cost of sales 2 (1,512) (1,903)
===== =========== ===========
Operating expenditure 2 (59,028) (53,009)
===== =========== ===========
Gain on disposal of housing properties 5 1,203 731
===== =========== ===========
Operating surplus 4 17,184 20,931
===== =========== ===========
Interest receivable 6 25 30
===== =========== ===========
Interest and financing costs 7 (14,713) (8,422)
===== =========== ===========
Surplus on ordinary activities before
taxation 2,496 12,539
===== =========== ===========
Taxation 10 - -
===== =========== ===========
Surplus for the year 2,496 12,539
===== =========== ===========
Actuarial gain/(loss) in respect of
pension schemes 23 14,117 (4,327)
===== =========== ===========
Total comprehensive surplus for the
year 16,613 8,212
===== =========== ===========
*See Note 28 - Prior Year Adjustment
The consolidated results relate wholly to continuing activities.
The accompanying notes form part of these financial statements. The
financial statements were authorised and approved by the Board on
25 August 2022 and were authorised for issue and signed on its
behalf by:
James D Hayward Lyn Peacock John Williams
Chair of the Board Company Secretary Board Member
The notes on pages 48 to 89 form part of these financial
statements.
Turnover 2 76,521 75,112
===== =========== ============
Cost of sales 2 (1,512) (1,903)
===== =========== ============
Operating expenditure 2 (59,031) (53,006)
===== =========== ============
Gain on disposal of housing properties 5 1,203 731
===== =========== ============
Operating surplus 4 17,181 20,934
===== =========== ============
Interest receivable 6 25 30
===== =========== ============
Interest and financing costs 7 (14,713) (8,422)
===== =========== ============
Surplus on ordinary activities before
taxation 2,493 12,542
===== =========== ============
Taxation 10 - -
===== =========== ============
Surplus for the year 2,493 12,542
===== =========== ============
Actuarial gain/(loss) in respect of
pension schemes 23 14,117 (4,327)
===== =========== ============
Total comprehensive surplus for the
year 16,610 8,215
===== =========== ============
*See Note 28 - Prior Year Adjustment
The results relate wholly to continuing activities. The
accompanying notes form part of these financial statements. The
financial statements were authorised and approved by the Board on
25 August 2022 and were authorised for issue and signed on its
behalf by:
James D Hayward Lyn Peacock John Williams
Chair of the Board Company Secretary Board Member
The notes on pages 48 to 89 form part of these financial
statements.
Fixed assets
===== ============ ============
Housing properties 11 398,411 370,173
===== ============ ============
Other tangible fixed assets 12 720 957
===== ============ ============
Intangible fixed assets 13 320 363
===== ============ ============
Investments - homebuy loans 14 166 197
===== ============ ============
399,617 371,690
===== ============ ============
Current assets
===== ============ ============
Properties held for sale 15 11,975 6,456
===== ============ ============
Trade and other debtors 16 11,208 4,924
===== ============ ============
Cash and cash equivalents 35,784 24,203
===== ============ ============
58,967 35,583
===== ============ ============
Creditors : Amounts falling due within
one year 17 (19,525) (44,706)
===== ============ ============
Net current assets/(liabilities) 39,442 (9,123)
===== ============ ============
Total assets less current liabilities 439,059 362,567
===== ============ ============
Creditors : Amounts falling due after
more than one year 18 (294,642) (223,554)
===== ============ ============
Pension provision 23 (26,004) (37,133)
===== ============ ============
Net assets 118,413 101,880
===== ============ ============
Reserves
===== ============ ============
Income and expenditure reserve 116,456 100,106
===== ============ ============
Restricted reserve 1,957 1,774
===== ============ ============
Total reserves 118,413 101,880
===== ============ ============
The financial statements were authorised and approved by the
Board on 25 August 2022 and were authorised for issue and signed on
its behalf by:
James D Hayward Lyn Peacock John Williams
Chair of the Board Company Secretary Board Member
The notes on pages 48 to 89 form part of these financial
statements.
Fixed assets
===== ============ ============
Housing properties 11 398,930 370,699
===== ============ ============
Other tangible fixed assets 12 720 957
===== ============ ============
Intangible fixed assets 13 320 363
===== ============ ============
Investments - homebuy loans 14 166 197
===== ============ ============
400,136 372,216
===== ============ ============
Current assets
===== ============ ============
Properties held for sale 15 11,975 6,456
===== ============ ============
Trade and other debtors 16 11,207 4,922
===== ============ ============
Cash and cash equivalents 35,742 24,156
===== ============ ============
58,924 35,534
===== ============ ============
Creditors : Amounts falling due within
one year 17 (19,732) (44,911)
===== ============ ============
Net current assets/(liabilities) 39,192 (9,377)
===== ============ ============
Total assets less current liabilities 439,328 362,839
===== ============ ============
Creditors: Amounts falling due after
more than one year 18 (294,642) (223,554)
===== ============ ============
Pension provision 23 (26,004) (37,133)
===== ============ ============
Net assets 118,682 102,152
===== ============ ============
Reserves
===== ============ ============
Income and expenditure reserve 116,725 100,378
===== ============ ============
Restricted reserve 1,957 1,774
===== ============ ============
Total reserves 118,682 102,152
===== ============ ============
The financial statements were authorised and approved by the
Board on 25 August 2022, and were authorised for issue and signed
on its behalf by:
James D Hayward Lyn Peacock John Williams
Chair of the Board Company Secretary Board Member
The notes on pages 48 to 89 form part of these financial
statements.
Net cash inflow from operating activities 24 24,853 34,326
===== ============ ===========
Cash flow from investing activities
===== ============ ===========
Purchase of tangible fixed assets (36,353) (21,263)
===== ============ ===========
Purchase of intangible fixed assets (73) (114)
===== ============ ===========
Capital grants received 7,342 4,323
===== ============ ===========
Net cash outflow from investing activities (29,084) (17,054)
===== ============ ===========
Cash flow from financing activities
===== ============ ===========
Interest paid and breakage costs (13,987) (8,403)
===== ============ ===========
Proceeds of new borrowings 161,291 -
===== ============ ===========
Loan arrangement Fees 20 (1,492)
===== ============ ===========
Repayments of borrowings (130,000) (10,000)
===== ============ ===========
Net cash inflow/(outflow) from financing
activities 15,812 (18,403)
===== ============ ===========
Net change in cash and cash equivalents 11,581 (1,131)
===== ============ ===========
Cash and cash equivalents at beginning
of year 24,203 25,334
===== ============ ===========
Cash and cash equivalents at end of
year 35,784 24,203
===== ============ ===========
The notes on pages 48 to 89 form part of these financial
statements.
1 April 2020 as previously stated 93,106 2,484 95,590
========== ======== ==========
Prior year adjustment (note 28) (1,048) (812) (1,860)
========== ======== ==========
1 April 2020 as restated 92,058 1,672 93,730
========== ======== ==========
Surplus for the year as previously stated 12,873 - 12,873
========== ======== ==========
Prior year adjustment (note 28) (334) - (334)
========== ======== ==========
Surplus for the year as restated 12,539 - 12,539
========== ======== ==========
Actuarial loss in respect of pension
schemes (Note 23) (4,327) - (4,327)
========== ======== ==========
Transfer of restricted expenditure from
unrestricted reserve (102) 102 -
========== ======== ==========
Transfer to disposal proceeds /recycled
capital grant funds (62) - (62)
========== ======== ==========
As at 31 March 2021 restated 100,106 1,774 101,880
========== ======== ==========
Surplus for the year 2,496 - 2,496
========== ======== ==========
Actuarial loss in respect of pension
schemes (Note 23) 14,117 - 14,117
========== ======== ==========
Transfer of restricted expenditure from
unrestricted reserve (183) 183 -
========== ======== ==========
Transfer to disposal proceeds/recycled
capital grant funds (80) - (80)
========== ======== ==========
As at 31 March 2022 116,456 1,957 118,413
========== ======== ==========
Restricted reserves are for lift replacement and property
refurbishment. The lift replacement reserve represents amounts
collected from tenants living in specific blocks for the future
replacement of the lift in the building(s). The property
refurbishment reserve represents income received for future
investment in empty properties in the local area.
The notes on pages 48 to 89 form part of these financial
statements.
1 April 2020 as previously stated 93,375 2,484 95,859
========== ======== ==========
Prior year adjustment (note 28) (1,048) (812) (1,860)
========== ======== ==========
1 April 2020 as restated 92,327 1,672 93,999
========== ======== ==========
Surplus for the year as previously stated 12,876 - 12,876
========== ======== ==========
Prior year adjustment (note 28) (334) - (334)
========== ======== ==========
Surplus for the year as restated 12,542 - 12,542
========== ======== ==========
Actuarial loss in respect of pension
schemes (Note 23) (4,327) - (4,327)
========== ======== ==========
Transfer of restricted expenditure from
unrestricted reserve (102) 102 -
========== ======== ==========
Transfer to disposal proceeds /recycled
capital grant funds (62) - (62)
========== ======== ==========
As at 31 March 2021 restated 100,378 1,774 102,152
========== ======== ==========
Surplus for the year 2,493 - 2,493
========== ======== ==========
Actuarial loss in respect of pension
schemes (Note 23) 14,117 - 14,117
========== ======== ==========
Transfer of restricted expenditure from
unrestricted reserve (183) 183 -
========== ======== ==========
Transfer to disposal proceeds/recycled
capital grant funds (80) - (80)
========== ======== ==========
As at 31 March 2022 116,725 1,957 118,682
========== ======== ==========
Restricted reserves are for lift replacement and property
refurbishment. The lift replacement reserve represents amounts
collected from tenants living in specific blocks for the future
replacement of the lift in the building(s). The property
refurbishment reserve represents income received for future
investment in empty properties in the local area.
The notes on pages 48 to 89 form part of these financial
statements.
1) Legal status
Beyond Housing Limited (the association) is a Community Benefit
Society (CBS) incorporated in the United Kingdom, registered with
the Financial Conduct Authority (FCA) as a registered society and
with the Regulator Social Housing (RSH) as a registered
provider.
The association's registered office and principal place of
business is:
Brook House
4 Gladstone Road,
Scarborough,
North Yorkshire,
YO12 7BH
Beyond Housing Limited is a Public Benefit Entity and its
principal activity is noted in the Report of the Board of
Management on page 3.
Basis of accounting
The financial statements have been prepared in accordance
with:
-- UK Generally Accepted Accounting Practice (UK GAAP),
including The Financial Reporting Standard applicable in the UK and
Republic of Ireland (FRS102); and
-- The Housing SORP 2018 Statement of Recommended Practice for
registered social housing providers (SORP 2018).
Disclosure exemptions
In preparing the separate financial statements of the parent
Association, advantage has been taken of the following disclosure
exemptions available in FRS 102:
-- no cash flow statement or net debt reconciliation has been
presented for the parent association
-- disclosures in respect of the parent Association's financial
instruments have not been presented as equivalent disclosures have
been provided in respect of the group as a whole
-- no disclosure has been given for the aggregate remuneration
of the key management personnel of the parent Association as their
remuneration is included in the totals for the group as a
whole.
The financial statements comply with the Co-operative and
Community Benefit Societies Act 2014, the Housing and Regeneration
Act 2008 and the Accounting Direction for Private Registered
Providers of Social Housing 2022. The financial statements are
prepared on the historical cost basis of accounting.
The numbers in the financial statements are represented in pound
sterling and rounded to the nearest thousand unless otherwise
stated.
A summary of the group's more important accounting policies is
set out below.
Going concern
The group's business activities, its current financial position
and factors likely to affect its future development are set out
within the report of the board and strategic report. Long term debt
facilities are higher at 31 March 2022 compared to 31 March 2021
due to the issuance in May 2021 of our ESG public bond. The
issuance was for GBP250m over 30 years at a coupon rate 2.125%. On
refinancing GBP165m was drawn and GBP85m retained. The majority of
the bond was used to refinance existing loans. The refinancing
lowered overall costs of debt finance, aligned bank covenants,
increased fixed debt and provided more attractive debt structures.
The group also has a long-term business plan which shows that it
can service these debt facilities whilst continuing to comply with
lenders' covenants. The 2022 business plan has been updated and
reflects the current economic circumstances experienced including
higher interest, higher inflation and supply chain uncertainty. Our
Board and Executive team are continually monitoring the business
plan in relation to these pressures and are appropriately stress
testing the business plan for deteriorating conditions including
higher interest and inflation, and lower rent levels and rent
collection.
On this basis, the board has a reasonable expectation that the
group has adequate resources to continue in operational existence
for the foreseeable future, being a period of at least twelve
months after the date on which the report and financial statements
are signed. For this reason, it continues to adopt the going
concern basis in the financial statements.
Basis of consolidation
The consolidated financial statements present the results of
Beyond Housing Limited (Association) and its subsidiaries ("the
Group") as if they formed a single entity. Intercompany
transactions and balances between group companies are therefore
eliminated in full.
Significant judgements and estimates
Preparation of financial statements requires management to make
significant judgements and estimates. The judgements and estimates
which have the most significant impact on amounts recognised in the
financial statements are set out below.
Judgements in applying accounting policies and key sources of
estimation uncertainty
In preparing these financial statements, the key judgements have
been made in respect of the following:
-- The housing portfolio of the group is assessed for indicators
of impairment at each balance sheet date. Where indicators of
impairment are identified then a detailed assessment is undertaken
to compare the carrying amount of assets or cash generating units
for which impairment is indicated to their recoverable amounts. The
recoverable amount is taken to be the higher of the fair value less
costs to sell or value in use of an asset or cash generating unit.
The assessment of value in use may involve considerations of the
service potential of the asset or cash generating units concerned
or the present value of future cash flows to be derived from them
appropriately adjusted to account for any restrictions on their
use. The group defines a cash generating unit as a single property.
Where the recoverable amount of the asset or cash generating unit
is lower than its carrying value an impairment is recorded through
a charge to income and expenditure.
Judgements in applying accounting policies and key sources of
estimation uncertainty (continued)
-- Estimating the economic useful lives ("UEL") of components;
management have estimated the UEL of components by liaising with
the Assets team to gain their professional opinion based on
-- knowledge and experience.
-- The group makes an estimate of the recoverable value of trade
and other debtors. When assessing impairment of trade and other
debtors, management considers factors including the age profile
of
-- the debtors and historical experience. See note 16 for the
net carrying amount of the debtors and associated impairment
provision.
Estimation uncertainty
Information about estimates and assumptions that have the most
significant effect on recognition and measurement of assets,
liabilities, income and expenses is provided below.
Useful lives of depreciable assets
Management reviews its estimate of the useful lives of
depreciable assets at each reporting date based on the expected
utility of the asset. Uncertainties in these estimates relate to
technological obsolescence that may change the utility of certain
software and IT equipment and changes to decent homes standards
which may require more frequent replacement of key components.
Accumulated depreciation and impairment on housing properties on 31
March 2022 was GBP102m (2021: GBP96m).
Impairment of housing properties
In line with the accounting policy for impairment a review of
the housing properties has been undertaken and management have
estimated recoverable amount of properties.
Defined benefit pension assets/liabilities
The North Yorkshire Pension Fund (NYPF) and Teesside Pension
Fund (TPF) defined benefit pension asset and liability estimates
are based on a series of assumptions including inflation rates,
mortality, discount rates and future salary increases. Variations
in these assumptions may significantly impact the cost of the
defined benefit pension fund's benefits and future liabilities. The
funds liability on 31 March 2022 is GBP26.0m (2021: GBP37.1m). The
assets allocated to the association in the funds are notional and
are assumed to be invested in line with the investments of the
funds for the purposes of calculating the return to be applied to
those notional assets over the accounting period.
Accounting Policies: The following principal polices have been
applied:
Turnover
Turnover is measured at the fair value of the consideration
received or receivable. The group generates the following material
income streams:
-- rental income receivable (after deducting lost rent from void
properties available for letting)
-- first tranche sales of housing properties developed for sale
-- service charges receivable
-- income from Homebuy activities
-- revenue grants; and
Accounting policies (continued)
-- other income.
Rental income is recognised from the point where properties
under development reach practical completion or otherwise become
available for letting, net of any voids. Income from first tranche
sales and sales of properties built for sale is recognised at the
point of legal completion of the sale. The Group adopts the
variable method for calculating and charging service charges to its
tenants and leaseholders. Expenditure is recorded when a service is
provided and charged to the relevant service charge account or to a
sinking fund. Income is recorded based on the estimated amounts
chargeable.
Other revenue is included at the invoiced value (excluding VAT
where recoverable) of goods and services supplied in the year and
grants receivable in the year.
Prior year adjustment
A prior year adjustment has been processed in these accounts
reflecting the mis-classification of some properties as
intermediate rent as opposed to affordable rent. Details of the
prior year adjustment are disclosed in note 28.
Housing properties
Housing properties constructed or acquired (including land) on
the open market since the date of transition to FRS 102 are stated
at cost less depreciation and impairment (where applicable). The
cost of housing land and property includes the cost of acquiring
land and buildings, development costs, interest capitalised during
the development period and, directly attributable administration
costs.
Interest payable on borrowing which has been drawn in order to
finance the relevant construction or acquisition is capitalised.
Where housing properties are under construction, finance costs are
only capitalised where construction is on-going and has not been
interrupted or terminated.
Expenditure on major refurbishment to properties is capitalised
where the works increase the net rental stream over the life of the
property. An increase in the net rental stream may arise through an
increase in the net rental income, a reduction in future
maintenance costs, or a subsequent extension in the life of the
property. All other repair and replacement expenditure is charged
to the Statement of Comprehensive Income.
Housing properties under construction, excluding the estimated
cost of the element of shared ownership properties expected to be
sold in first tranche, are included in PPE and held at cost less
any impairment, and are transferred to completed properties when
ready for letting.
Gains and losses on disposals of housing properties are
determined by comparing the proceeds with the carrying amount and
incidental costs of sales and recognised within gain/loss on
disposal of fixed assets, which is included in the operating
surplus for the year.
Shared ownership properties and staircasing
Under low-cost home ownership arrangements, the Group disposes
of a long lease on low-cost home ownership housing units for a
share ranging between 25% and 75% of value. The Buyer has the right
to purchase further proportions up to 100% based on the market
valuation of the property at the time each purchase transaction is
completed.
Accounting policies (continued)
Shared Ownership and staircasing properties (continued)
Low-cost home ownership properties are split proportionately
between current and fixed assets based on the element relating to
expected first tranche sales. The first tranche proportion is
classed as a current asset and related sales proceeds included in
turnover. The remaining rental element is classed as fixed assets
and included in completed housing property at cost less any
provision for impairment. Sales of subsequent tranches are treated
as a part disposal of fixed asset property and included in
operating surplus.
Properties for sale
Shared ownership first tranche sales completed properties for
outright sale and property under construction are valued at the
lower of cost and net realisable value. Cost comprises materials,
direct labour and direct development overheads. Net realisable
value is based on estimated sales price after allowing for all
further costs of completion and disposal.
Depreciation of housing properties
The group separately identifies the major components of its
housing properties and charges depreciation to write down the cost
of each component to its estimated residual value, on a
straight-line basis, over its estimated useful economic life. Land
is not depreciated owing to its infinite economic life.
Assets in the course of construction are not depreciated until
they are completed and ready for use to ensure that they are
depreciated only in periods in which economic benefits are expected
to be consumed.
Housing properties are split between the structure and the major
components which require periodic replacement. The costs of
replacement or restoration of these components are capitalised and
depreciated over the determined average useful economic life on a
straight-line basis as follows:
Property structure 100
======
Roof 60
======
Windows 30
======
Kitchen 20
======
Bathroom 30
======
Electrical 30
======
Doors 30
======
Boiler 15
======
Heating system 30
======
Shared ownership properties 50
======
Other Properties 50
======
Lifts 20
======
Independent Supported Living
equipment 15
======
Accounting policies (continued)
Other tangible fixed assets
Depreciation is provided evenly on the cost of other tangible
fixed assets to write them down to their estimated residual values
over their expected useful lives. The expected useful lives for the
purposes of these financial statements are:
Fixtures and fittings 5 years
Computers and office equipment 3-5 years
============
Other equipment 3-5 years
============
Intangible fixed assets
Amortisation is provided evenly on the cost of intangible fixed
assets to write them down to their estimated residual values over
their expected useful lives. The expected useful lives for the
purposes of these financial statements are:
Computer software 3-5 years
Impairment
Reviews for indicators of impairment of housing properties are
carried out on an annual basis and any impairment in an income
generating unit is recognised by a charge to the Statement of
Comprehensive Income. An impairment is recognised where the
carrying value of an income generating unit exceeds its recoverable
amount being the higher of its fair value less costs to sell and
its value in use.
Government/other grants
Government grants include grants receivable from the Homes
England, local authorities, and other government organisations.
Government grants received for housing properties are recognised in
income over the useful life of the housing property structure and,
where applicable, its individual components (excluding land) under
the accruals model.
Grants relating to revenue are recognised in income and
expenditure over the same period as the expenditure to which they
relate once reasonable assurance has been gained that the entity
will comply with the conditions and that the funds will be
received. This includes the Government Coronavirus Job Retention
Scheme ('Furlough'). Grants due from government organisations or
received in advance are included as current assets or liabilities.
Government grant received for housing properties is subordinated to
the repayment of loans by agreement with the Homes England.
Government grants released on sale of a property may be repayable
but are normally available to be recycled and are credited to a
Recycled Capital Grant Fund and included in the Statement of
Financial Position in creditors.
Where social housing grant (SHG) funded property is sold, the
grant becomes recyclable and is transferred to a recycled capital
grant fund until it is reinvested in a replacement property. If
there is no requirement to recycle or repay the grant on disposal
of the assets any unamortised grant remaining within creditors is
released and recognised as income within the income and expenditure
account.
Accounting policies (continued)
Leases
Rentals payable under operating leases are charged to the SOCI
on a straight-line basis over the lease term.
Cash equivalents
Cash and cash equivalents in the Group's Consolidated Statement
of Financial Position consists of cash at bank, in hand, deposits
and short-term investments with an original maturity of three
months or less.
Employee benefits
The costs of short-term employee benefits are recognised as a
liability and an expense. The best estimate of the expenditure
required to settle an obligation for termination benefits is
recognised immediately as an expense when the RP is demonstrably
committed to terminate the employment of an employee or to provide
termination benefits.
Pension costs
The association participates in a defined benefit pension fund
and operates two defined contribution schemes.
Defined contribution plans
For defined contribution schemes the amount charged to income
and expenditure is the contributions payable in the year.
Differences between contributions payable in the year and
contributions actually paid are shown as either accruals or
prepayments.
Defined benefit plan
The net defined benefit asset/liability represents the present
value of the defined benefit obligation minus the fair value of the
plan assets out of which obligations are to be settled. Any asset
resulting from this calculation is limited to the present value of
available refunds or reductions in future contributions to the
plan. The rate used to discount the benefit obligations to their
present value is based on market yields for high quality corporate
bonds with terms and currencies consistent with those of the
benefit obligations.
Gains or losses recognised in the profit or loss:
-- The change in the net defined benefit liability arising from
employee service during the year is recognised as an employee
cost
-- The cost of plan introductions, benefit changes, settlements
and curtailments are recognised as incurred
-- Net interest on the net defined benefit asset/liability
comprises the interest cost on the defined benefit obligation and
interest income on the plan assets, calculated by multiplying the
fair value of the plan assets at the beginning of the period by the
rate used to discount the benefit obligations.
Accounting policies (continued)
Gains or losses recognised in other comprehensive income:
-- Actuarial gains and losses
-- The difference between the interest income on the plan assets
and the actual return on the plan assets.
Taxation
Current tax is recognised for the amount of income tax payable
in respect of the taxable surplus for the current or past reporting
periods using the tax rates and laws that have been enacted or
substantively enacted by the reporting date.
Value Added Tax (VAT)
The group is partially exempt from VAT. A small proportion of
VAT is reclaimed. The balance of VAT payable or recoverable at the
year-end is included as a current liability or asset.
Fixed asset investments
Fixed asset investments are stated at cost and are assessed for
impairment at each reporting date.
Properties held for sale
Properties held for sale represents work in progress and
completed properties, including housing properties developed for
transfer to other registered providers; properties developed for
outright sale; and shared ownership properties. For shared
ownership properties the value held as stock is the estimated cost
to be sold as a first tranche.
Stock is stated at the lower of cost and net realisable value.
Cost comprises materials, direct labour, capitalised interest and
direct development overheads. Net realisable value is based on
estimated sales proceeds after allowing for all further costs to
completion and selling costs.
An assessment of net realisable value is made at each reporting
date. Where a write down is required it is immediately recognised
in the statement of consolidated income.
HomeBuy
HomeBuy loans are treated as concessionary loans. They are
initially recognised at the amount paid to the purchaser and
reviewed annually for impairment. The associated HomeBuy grant is
recognised as deferred income until the loan is redeemed.
Financial instruments
Financial assets and financial liabilities are recognised when
the group become a party to the contractual provisions of the
instrument and are offset only when the group currently has a
legally enforceable right to set off the recognised amounts and
intends either to settle on a net basis, or to realise the asset
and settle the liability simultaneously.
Accounting policies (continued)
Debtors
Debtors which are receivable within one year and which do not
constitute a financing transaction are initially measured at
transaction price. Trade debtors and other debtors are subsequently
measured at amortised cost, being the transaction price less any
amounts settled and any impairment losses.
Where the arrangements with a trade debtor constitute a
financing transaction, the debtor is initially and subsequently
measured at the present value of future payments discounted at a
market rate of interest for a similar debt instrument.
A provision for impairment of debtors is established when there
is objective evidence that the amounts due will not be collected
according to the original terms of the contract. Impairment losses
are recognised in the profit or loss for the excess of the carrying
value of the trade debtor over the present value of the future cash
flows discounted using the original effective interest rate.
Subsequent reversals of an impairment loss that objectively relate
to an event occurring after the impairment loss was recognised, are
recognised immediately in profit or loss.
Trade creditors
Trade creditors payable within one year that do not constitute a
financing transaction are initially measured at the transaction
price and subsequently measured at amortised cost, being the
transaction price less any amounts settled.
Borrowings
Borrowings are initially recognised at the transaction price,
including transaction costs, and subsequently measured at amortised
cost using the effective interest method. Interest expense is
recognised on the basis of the effective interest method and is
included in interest payable and other similar charges. Basic
financial instruments: Beyond Housing has various borrowings, all
of which have been assessed and categorised as basic. The
assessment of certain loans and interest rates fixes as basic
financial instruments require judgement. The Association does not
undertake any stand-alone hedging and does not deal in derivatives.
Bonds have been classed as a "basic financial instrument" as they
meet the criteria under Section 11.9 of FRS 102. Management have
considered how bond and loan discount on issue should be dealt with
in the financial statements and determined that these should be
written off over the life of bond (30 years) using the effective
interest rate method. Management have considered how bond and loan
issue costs should be dealt with in the financial statements and
determined that these should be written off over the life of the
respective instruments in equal annual instalments.
Derecognition of financial assets and liabilities
A financial asset is derecognised only when the contractual
rights to cash flows expire or are settled, or substantially all
the risks and rewards of ownership are transferred to another
party, or if some significant risks and rewards of ownership are
retained but control of the asset has transferred to another party
that is able to sell the asset in its entirety to an unrelated
third party. A financial liability (or part thereof) is
derecognised when the obligation specified in the contract is
discharged, cancelled or expires.
Accounting policies (continued)
Holiday pay accrual
A liability is recognised to the extent of any unused holiday
pay entitlement which has accrued at the reporting date and carried
forward to future periods. This is measured at the undiscounted
salary cost of the future holiday entitlement accrued at the
reporting date.
Restricted reserve
The group has established a restricted reserve for the purposes
of lift replacement and property refurbishment funding. The reserve
is restricted as the funding received is for a specific use and
cannot be used for other purposes identified by management.
2a) Turnover, cost of sales, operating expenditure and operating
surplus
Social housing lettings
(note 2b) 70,578 - (55,210) 15,368
======== ========= ========== ========
Other social housing
activities
======== ========= ========== ========
First tranche shared
ownership sales 1,787 (1,512) - 275
======== ========= ========== ========
Other 1,461 - (1,914) (453)
======== ========= ========== ========
Non-social housing activities
======== ========= ========== ========
Lettings 567 - (103) 464
======== ========= ========== ========
Sale of non-social housing - - - -
properties
======== ========= ========== ========
Other 2,128 - (1,801) 327
======== ========= ========== ========
76,521 (1,512) (59,028) 15,981
======== ========= ========== ========
Social housing lettings
(note 2b) 68,647 - (48,932) 19,715
======== ========= ========== ========
Other social housing
activities
======== ========= ========== ========
First tranche shared
ownership sales 2,383 (1,903) - 480
======== ========= ========== ========
Other 1,075 - (2,051) (976)
======== ========= ========== ========
Non-social housing activities
======== ========= ========== ========
Lettings 600 - (35) 565
======== ========= ========== ========
Other 2,407 - (1,991) 416
======== ========= ========== ========
75,112 (1,903) (53,009) 20,200
======== ========= ========== ========
2a) Turnover, cost of sales, operating expenditure and operating
surplus (continued)
Social housing lettings
(note 2b) 70,578 - (55,217) 15,361
========= ========== =========== =========
Other social housing activities
========= ========== =========== =========
First tranche shared ownership
sales 1,787 (1,512) - 275
========= ========== =========== =========
Other 1,461 - (1,910) (449)
========= ========== =========== =========
Non-social housing activities
========= ========== =========== =========
Lettings 567 - (103) 464
========= ========== =========== =========
Sale of non-social housing - - - -
properties
========= ========== =========== =========
Other 2,128 - (1,801) 327
========= ========== =========== =========
76,521 (1,512) (59,031) 15,978
========= ========== =========== =========
Social housing lettings
(note 2b) 68,647 - (48,939) 19,708
========= ========== =========== =========
Other social housing activities
========= ========== =========== =========
First tranche shared ownership
sales 2,383 (1,903) - 480
========= ========== =========== =========
Other 1,075 - (2,041) (966)
========= ========== =========== =========
Non-social housing activities
========= ========== =========== =========
Lettings 600 - (35) 565
========= ========== =========== =========
Sale of non-social housing - - - -
properties
========= ========== =========== =========
Other 2,407 - (1,991) 416
========= ========== =========== =========
75,112 (1,903) (53,006) 20,203
========= ========== =========== =========
2b) Income and expenditure from social housing lettings
Income
========== ========= ========== ==========
Rent's receivable 66,684 1,651 68,335 66,823
========== ========= ========== ==========
Service charges receivable 1,588 135 1,723 1,321
========== ========= ========== ==========
68,272 1,786 70,058 68,144
========== ========= ========== ==========
Other revenue grants 80 - 80 62
========== ========= ========== ==========
Grant amortisation 440 - 440 441
========== ========= ========== ==========
Turnover from social housing
lettings 68,792 1,786 70,578 68,647
========== ========= ========== ==========
Expenditure
========== ========= ========== ==========
Management (19,144) (455) (19,599) (18,186)
========== ========= ========== ==========
Service charge costs (1,872) (152) (2,024) (1,527)
========== ========= ========== ==========
Routine maintenance (13,142) (137) (13,279) (9,518)
========== ========= ========== ==========
Planned maintenance (3,876) (22) (3,898) (3,220)
========== ========= ========== ==========
Major repairs expenditure (7,163) (81) (7,244) (7,002)
========== ========= ========== ==========
Rent losses from bad debts 50 (1) 49 (241)
========== ========= ========== ==========
Depreciation of housing properties (9,018) (197) (9,215) (9,238)
========== ========= ========== ==========
Total expenditure on social
housing lettings (54,165) (1,045) (55,210) (48,932)
========== ========= ========== ==========
Operating surplus on social
housing lettings 14,627 741 15,368 19,715
========== ========= ========== ==========
Rent losses from voids 1,089 24 1,113 1,097
========== ========= ========== ==========
Income
========== ========= ========== ==========
Rent's receivable 66,684 1,651 68,335 66,823
========== ========= ========== ==========
Service charges receivable 1,588 135 1,723 1,321
========== ========= ========== ==========
68,272 1,786 70,058 68,144
========== ========= ========== ==========
Other revenue grants 80 - 80 62
========== ========= ========== ==========
Grant Amortisation 440 - 440 441
========== ========= ========== ==========
Total income from social
housing lettings 68,792 1,786 70,578 68,647
========== ========= ========== ==========
Expenditure
========== ========= ========== ==========
Management (19,144) (455) (19,599) (18,186)
========== ========= ========== ==========
Service charge costs (1,872) (152) (2,024) (1,527)
========== ========= ========== ==========
Routine maintenance (13,142) (137) (13,279) (9,518)
========== ========= ========== ==========
Planned maintenance (3,876) (22) (3,898) (3,220)
========== ========= ========== ==========
Major repairs expenditure (7,163) (81) (7,244) (7,002)
========== ========= ========== ==========
Rent losses from bad debts 50 (1) 49 (241)
========== ========= ========== ==========
Depreciation of housing properties (9,025) (197) (9,222) (9,245)
========== ========= ========== ==========
Total expenditure on social
housing lettings (54,172) (1,045) (55,217) (48,939)
========== ========= ========== ==========
Operating surplus on social
housing lettings 14,620 741 15,361 19,708
========== ========= ========== ==========
Rent losses from voids 1,089 23 1,112 1,097
========== ========= ========== ==========
2b) Income and expenditure from social housing lettings (continued)
3) Housing stock
The end of the year unit of housing accommodation in management
were as follows:
Social housing:
========= ====== ======= ====== ======= =========
General needs social 13,412 5 (71) (2) - 13,344
========= ====== ======= ====== ======= =========
General needs affordable 880 111 (1) (1) - 989
========= ====== ======= ====== ======= =========
Intermediate 80 - - - - 80
========= ====== ======= ====== ======= =========
Shared ownership 261 23 (11) - - 273
========= ====== ======= ====== ======= =========
Supported housing
affordable 41 19 - 3 - 63
========= ====== ======= ====== ======= =========
Housing for older
people social 205 - - - - 205
========= ====== ======= ====== ======= =========
Housing for older
people affordable 73 - - - - 73
========= ====== ======= ====== ======= =========
Total Social Housing
Units 14,952 158 (83) - - 15,027
========= ====== ======= ====== ======= =========
Market rent 3 - - - - 3
========= ====== ======= ====== ======= =========
Staff accommodation 3 - - - - 3
========= ====== ======= ====== ======= =========
Total Owned 14,958 158 (83) - - 15,033
========= ====== ======= ====== ======= =========
Accommodation managed
for others 91 - - - (23) 68
========= ====== ======= ====== ======= =========
Total managed accommodation 15,049 158 (83) - (23) 15,101
========= ====== ======= ====== ======= =========
Units owned but not
managed 12 - - - - 12
========= ====== ======= ====== ======= =========
Total owned and
managed accommodation 15,061 158 (83) - (23) 15,113
========= ====== ======= ====== ======= =========
Additionally, there were 12 units owned but not managed at the
year-end (2022: 12) giving 15,113 total units (2021: 15,061). Owned
units totalled 15,101 (2021: 15,049).
4) Operating surplus
Depreciation of housing properties 8,898 8,864 8,905 8,871
======== ======== ======== ========
Depreciation of other tangible fixed
assets 257 337 257 337
======== ======== ======== ========
Amortisation of intangible fixed
assets 116 94 116 94
======== ======== ======== ========
Operating lease rentals 1,480 1,327 1,480 1,327
======== ======== ======== ========
External auditor's remuneration for
audit services 80 60 78 55
======== ======== ======== ========
External auditor's remuneration for
non-audit services:
======== ======== ======== ========
* Taxation compliance and advice 2 4 2 2
======== ======== ======== ========
* All other non-audit services 36 2 36 2
======== ======== ======== ========
5) Gain on disposal of housing properties group and association
Disposal proceeds 1,052 3,318 4,370 2,963
========== ========== ==========
Cost of Disposal (844) (2,323) (3,167) (2,232)
======== ========== ========== ==========
Surplus on disposal of fixed
assets 208 731 1,203 731
======== ========== ========== ==========
6) Interest receivable
Interest on bank deposits 17 27 17 27
===== ===== ===== =====
Interest from other investments 8 3 8 3
===== ===== ===== =====
25 30 25 30
===== ===== ===== =====
7) Interest and financing costs
Interest payable on bank
loans and overdrafts 7,696 8,269 7,696 8,269
========= ======== ========= ========
Loan breakage costs 7,098 - 7,098 -
========= ======== ========= ========
Loan Arrangement Fee Amortisation 56 - 56 -
========= ======== ========= ========
Defined benefit pension
charge 787 654 787 654
========= ======== ========= ========
15,637 8,923 15,637 8,923
========= ======== ========= ========
Less interest capitalised
on housing properties under
construction (3.2%) (924) (501) (924) (501)
========= ======== ========= ========
14,713 8,422 14,713 8,422
========= ======== ========= ========
The refinancing led to breakage costs across existing loans
refinanced as part of the bond issuance. The interest costs of the
bond are significantly below the interest on the loads refinanced
meaning the breakage cost are fully recovered in 10 years and
annualised interest payments also fell.
8) Emoluments of the board, executive directors and senior staff
S Hardwick 7 6
===== =====
P Baren 9 9
===== =====
J Hayward (Chair) 15 15
===== =====
R Frankland (left Sept 2020) - 3
===== =====
F Yeomans 6 6
===== =====
A Gambles (left Sept 2021) 3 7
===== =====
J Jones (left Sept 2021) 3 6
===== =====
G Taylor 6 6
===== =====
K Abson 7 6
===== =====
S Williams 6 6
===== =====
J Williams 9 9
===== =====
A Baraskina - trainee 1 -
===== =====
E Dixon - trainee 1 -
===== =====
D Rose - trainee 1 -
===== =====
74 79
===== =====
8) Emoluments of the board, executive directors and senior staff (continued)
Expenses reimbursed to board members not chargeable to UK income
tax were GBP1,422 (2021: GBP798).
Rosemary Du Rose is the Chief Executive, and her emoluments are
included in the executive director's emoluments below. The Chief
Executive is a member of a Beyond Housing defined contribution
scheme. Employer pension contributions for 2021/22 were GBP15k
(2020/21 were GBP15k). The board had three trainee members.
The following disclosures relate to members of staff who are
directors as defined in the Accounting Direction for Private
Registered Providers of Social Housing 2022.
Remuneration 421 453
====== ======
Pension contributions 33 40
====== ======
Total 454 493
====== ======
The total remuneration of key management personnel, who equate
to the group's executive directors, was GBP454,000 (2021:
GBP493,000). Expenses reimbursed to executive directors not
chargeable to UK income tax were GBP1,327 (2021: GBP591).
The emoluments of the highest paid directors excluding pension
and benefits were as follows:
T O'Neill - 46
======= =======
K Hanlon 127 126
======= =======
R Du Rose 166 165
======= =======
S Rawson 127 116
======= =======
T O'Neill retired in August 2020.
Defined contribution schemes 3 3
==== ====
Defined benefit schemes - 1
==== ====
8) Emoluments of the board, executive directors and senior staff (continued)
FTE number of staff who received remuneration over GBP60k,
including Executive Directors.
GBP60,001 - GBP70,000 6 6
==== ====
GBP70,001 - GBP80,000 1 1
==== ====
GBP80,001 - GBP90,000 2 5
==== ====
GBP90,001 - GBP100,000 2 6
==== ====
GBP100,001 - GBP110,000 4 -
==== ====
GBP110,001 - GBP120,000 1 -
==== ====
GBP120,001 - GBP130,000 - 1
==== ====
GBP130,001 - GBP140,000 2 1
==== ====
GBP140,001 - GBP150,000 - -
==== ====
GBP150,001 - GBP160,000 - -
==== ====
GBP160,001 - GBP170,000 - -
==== ====
GBP170,001 - GBP180,000 - 1
==== ====
GBP180,001 - GBP190,000 1 -
==== ====
9) Employees
The average number of employees employed during the period,
expressed in full time equivalents (FTE)
Office staff 429 423
====== ======
Domestic 18 19
====== ======
Workforce 246 251
====== ======
693 693
====== ======
The basis of the FTE calculation is to average the total monthly
closing full time equivalent over the twelve-month period. Each
month the closing FTE position is calculated by adding starters,
removing leavers and adjusting for the time people are employed in
a given month. Changes to contracted hours are also captured in the
calculation. Employee costs for the above employees were:
Wages and salaries 21,307 21,073
========= =========
Social security costs 1,964 1,933
========= =========
Other pension costs 4,700 3,714
========= =========
27,971 26,720
========= =========
10) Taxation
Current tax
======== ========== ======== ==========
UK corporation tax on surplus - - - -
for the year
======== ========== ======== ==========
Deferred tax
======== ========== ======== ==========
Net origination and reversal - - - -
of timing differences
======== ========== ======== ==========
Total tax reconciliation
======== ========== ======== ==========
Surplus on ordinary activities
before taxation 2,496 12,539 2,493 12,542
======== ========== ======== ==========
Theoretical tax at current UK
Corporation tax rate of 19% (2019:
19%) 474 2,382 474 2,383
======== ========== ======== ==========
Effects of:
======== ========== ======== ==========
* Charitable companies' surplus (474) (2,382) (474) (2,383)
======== ========== ======== ==========
- - - -
* Deferred tax adjustment
======== ========== ======== ==========
Total tax charge - - - -
======== ========== ======== ==========
11) Fixed assets - Housing properties
Valuation or cost
1 April 2021 416,132 14,859 21,738 1,174 12,662 466,565
Additions 109 27,786 - 1,750 110 29,755
Property improvements 9,234 - - - - 9,234
Schemes completed 16,519 (16,519) 1,656 (1,656) - 0
Disposals (4,563) - (928) - (8) (5,499)
Capitalised interest - 845 - 80 - 925
Transfer between
classes - 411 - (411) - -
Transfer from/(to) - - - - - -
current assets
=========== =========== ============= ============ ========== ============
At 31 March 2022 437,431 27,382 22,466 937 12,764 500,980
=========== =========== ============= ============ ========== ============
Depreciation and impairment
1 April 2021 (92,814) (702) (1,458) - (1,418) (96,392)
Charge for year (8,433) - (333) - (132) (8,898)
Released on disposal 2,637 - 84 - - 2,721
At 31 March 2022 (98,610) (702) (1,707) 0 (1,550) (102,569)
=========== =========== ============= ============ ========== ============
Carrying amount:
31 March 2022 338,821 26,680 20,759 937 11,214 398,411
=========== =========== ============= ============ ========== ============
31 March 2021 323,318 14,157 20,280 1,174 11,244 370,173
=========== =========== ============= ============ ========== ============
11) Fixed assets - Housing properties (continued)
Cost
1 April 2021 416,718 14,859 21,738 1,174 12,662 467,151
Additions 109 27,786 - 1,750 110 29,755
Property improvements 9,234 - - - - 9,234
Schemes completed 16,519 (16,519) 1,656 (1,656) - -
Disposals (4,563) - (928) - (8) (5,499)
Capitalised interest - 845 - 80 - 925
Transfers between
classes - 411 - (411) - -
Transfer from/(to) - - - - - -
current assets
=========== =========== ========== ============ ========== ============
At 31 March 2022 438,017 27,382 22,466 937 12,764 501,566
=========== =========== ========== ============ ========== ============
Depreciation and
impairment
Restated 1 April 2021 (92,874) (702) (1,458) - (1,418) (96,452)
Charge for year (8,440) - (333) - (132) (8,905)
Released on disposal 2,637 - 84 - - 2,721
At 31 March 2022 (98,677) (702) (1,707) - (1,550) (102,636)
=========== =========== ========== ============ ========== ============
Carrying amount:
31 March 2022 339,340 26,680 20,759 937 11,214 398,930
=========== =========== ========== ============ ========== ============
31 March 2021 323,844 14,157 20,280 1,174 11,244 370,699
=========== =========== ========== ============ ========== ============
11) Fixed assets - Housing properties (continued)
Freehold land and buildings 370,530 354,584 371,049 355,110
========== ========== ========== ==========
Long leasehold land and buildings 264 258 264 258
========== ========== ========== ==========
370,794 354,842 371,313 355,368
========== ========== ========== ==========
*Other Properties included in the Housing Properties table
includes office accommodation, garages, shops and land bank assets
that are held for the benefit of our communities and social
housing.
Expenditure on works to existing properties comprises:
Components capitalised 9,234 4,347
========= =========
Amounts charged to income and
expenditure 24,645 19,845
========= =========
33,879 24,192
========= =========
12) Fixed assets - Other tangible fixed assets group and
association
Cost
======== ========== ======== ==========
At 1 April 2021 300 1,824 1,123 3,247
======== ========== ======== ==========
Additions 20 - - 20
======== ========== ======== ==========
Disposal - - - 0
======== ========== ======== ==========
At 31 March 2022 320 1,824 1,123 3,267
======== ========== ======== ==========
Depreciation and impairment
======== ========== ======== ==========
At 1 April 2021 (300) (1,062) (928) (2,290)
======== ========== ======== ==========
Charged for year - (193) (64) (257)
======== ========== ======== ==========
Disposal - - - 0
======== ========== ======== ==========
At 31 March 2022 (300) (1,255) (992) (2,547)
======== ========== ======== ==========
Carrying amount: 31 March
2022 20 569 131 720
======== ========== ======== ==========
31 March 2021 - 762 195 957
======== ========== ======== ==========
13) Fixed assets - intangible
Cost
========== ==========
At 1 April 2021 1,492 1,492
========== ==========
Additions 73 73
========== ==========
31 March 2022 1,565 1,565
========== ==========
Amortisation
========== ==========
At 31 March 2021 (1,129) (1,129)
========== ==========
Charged for year (116) (116)
========== ==========
At 31 March 2022 (1,245) (1,245)
========== ==========
Carrying amount: 31 March 2022 320 320
========== ==========
31 March 2021 363 363
========== ==========
14) Investment - Home loans
Cost
======= =======
At 1 April 2021 197 197
======= =======
Disposals (40) (40)
======= =======
31 March 2022 157 157
======= =======
Reversal of impairment 8 8
======= =======
Carrying amount: 31 March 2022 165 165
======= =======
31 March 2021 197 197
======= =======
Investments in home buy loans represent an equity stake in third
party properties purchased under the Homebuy Scheme. Interest rates
charged on the Homebuy loans are at 2.1% (2021 - 2%). Security for
the loans is based on the assets the loans relate to. Interest is
to be charged on the loans after the first five years until such
point that the loan is redeemed.
15) Properties held for sale
Shared ownership properties:
========= ======== ========= ========
* Completed properties 189 176 189 176
========= ======== ========= ========
* Work in progress 820 637 820 637
========= ======== ========= ========
Properties for outright
sale:
========= ======== ========= ========
- Completed properties 440 - 440 -
========= ======== ========= ========
* Work in progress 10,526 5,643 10,526 5,643
========= ======== ========= ========
11,975 6,456 11,975 6,456
========= ======== ========= ========
16) Debtors
Amounts falling due within
one year:
========== ========== ========== ==========
Rent and services receivable 3,863 3,989 3,863 3,989
========== ========== ========== ==========
Less: Provision for bad and
doubtful debts (1,531) (1,780) (1,531) (1,780)
========== ========== ========== ==========
2,332 2,209 2,332 2,209
========== ========== ========== ==========
Social Housing Grant receivable 4,827 128 4,827 128
========== ========== ========== ==========
Amounts owed by subsidiary - - - -
undertakings
========== ========== ========== ==========
Trade debtors 277 139 277 139
========== ========== ========== ==========
Other debtors 559 558 558 556
========== ========== ========== ==========
Prepayments and accrued income 3,185 1,862 3,185 1,862
========== ========== ========== ==========
11,180 4,896 11,179 4,894
========== ========== ========== ==========
Amounts falling due after
one year:
========== ========== ========== ==========
Other debtors 28 28 28 28
========== ========== ========== ==========
11,208 4,924 11,207 4,922
========== ========== ========== ==========
17) Creditors: Amounts falling due within one year
Rent and service charges received
in advance 1,611 1,493 1,611 1,493
========= ========= ========= =========
Trade creditors 1,787 1,498 1,788 1,499
========= ========= ========= =========
Amounts owed to subsidiary undertaking - - 212 212
========= ========= ========= =========
Other taxation and social security
costs 534 432 534 432
========= ========= ========= =========
Other creditors 2,470 1,956 2,470 1,956
========= ========= ========= =========
Deferred Capital Grant (note
22) 461 - 461 -
========= ========= ========= =========
Accruals and deferred income 12,662 9,327 12,656 9,319
========= ========= ========= =========
Housing loans (note 19) - 30,000 - 30,000
========= ========= ========= =========
19,525 44,706 19,732 44,911
========= ========= ========= =========
Amounts owed to subsidiaries undertakings are interest free and
repayable on demand.
18) Creditors: Amounts falling due after more than one year
Housing loans (note 19) 229,948 170,000
========== ==========
Camphill Village Trust Loan (note 19) 55 55
========== ==========
Recycled Capital Grant Fund (note 21) 139 628
========== ==========
Deferred Capital Grant (note 22) 64,500 52,871
========== ==========
294,642 223,554
========== ==========
In addition, the organisation had a Camphill Village Trust
interest free loan of GBP55,000 which relates to the cost of
purchasing 50% of a property to specifically house a tenant of the
trust. The loan will be repaid when the tenant vacates the
property.
19) Debt analysis
At 31 March 2022, the group had drawn loans of GBP235m. Three
are bilateral loans with three separate lenders whilst we issued a
public bond in May 2021. All with the exception of other loans are
secured by a charge over the group's housing properties.
Bank and Building Society Loans 70,000 200,000
========== ==========
Camphill Village Trust Loan 55 55
========== ==========
Bond 165,000 -
========== ==========
Bond Discount (3,184) -
========== ==========
Bond Issue Costs (1,868) -
========== ==========
230,003 200,055
========== ==========
Details of our public bond issuance in May 2021 is set out
below.
19) Debt analysis (continued)
At 31 March 2021 - - - -
========== ========== ====================================== ==========
Issued Bond 165,000 (3,277) (1,924) 159,799
========== ========== ====================================== ==========
Amortisation of
bond discount and
issue costs - 93 56 149
========== ========== ====================================== ==========
At 31 March 2022 165,000 (3,184) (1,868) 159,948
========== ========== ====================================== ==========
The discount on issue relates to prepaid interest over the
30-year term of the loan which was deducted from bond receipts on
the day of the transaction.
On 17 May 2021, Beyond Housing issued a 30 year GBP165m bond
("Bond") at a re-offer yield of 2.16%. The initial offer to the
market was for a principal amount of GBP165m (the "Principal
Amount", the issued Bond) with a principal amount of GBP85m of
bonds retained for later issue (the "Retained Bond").
A coupon rate of 2.125% meant that the issued bond was priced at
GBP98.014 (the "bond issue Price"), equivalent to a discount on
issue of GBP3.277m (0.02%). The net funds received were GBP161.311m
(GBP97.764 per GBP100 issued).
In arranging the Bond, the Association incurred issue costs of
GBP1.924m.
The discount on Issue and the Bond Issue costs will be amortised
over the term of the Bond. Interest is payable by the Beyond
Housing to the bondholders at a rate of 2.125% six months in
arrears on the principal amount, starting in May 2021.
The Bond is secured by way of fixed charges over the housing
properties of the Association in favour of Prudential acting as
Security Trustee.
The principal amount is due for repayment on 17th May 2051.
The repayment of these loans is determined by a fixed repayment
profile, with the bond being repaid in full by May 2051.
The interest rate risk profile of the loans comprises:
19) Debt analysis (continued)
Fixed rate borrowings 230,667 155,667
========== ==========
Floating rate borrowings 4,333 44,333
========== ==========
235,000 200,000
========== ==========
Interest rates on fixed rate borrowings range between 0.97% and
4.62%, with a weighted average of 3.0%. There were no other changes
to the loan agreements other than the replacement of LIBOR with
SONIA and the FRS 102 practical expedient has been applied such
that the adjustments to the contractual cash flows will be
reflected as an adjustment to the effective interest rate.
Therefore, the replacement of the loans' benchmark interest rate
will not result in an immediate gain or loss recorded in profit or
loss, which may have been required if the practical expedient was
not available or adopted.
Interest rates on floating rate borrowings are linked to SONIA
and are charged SONIA + margin.
At 31 March 2022 the group had undrawn loan facilities of
GBP104.0m secured and available (2021: GBP108.3m).
The loans are repayable as follows:
Due within one year - 30,000
========== ==========
Between two and five years - 38,255
========== ==========
More than five years 235,000 131,745
========== ==========
235,000 200,000
========== ==========
Loan Arrangement Fees (1,924) -
========== ==========
Loan Arrangement Fees Amortisation 56 -
========== ==========
Bond Discount (3,277) -
========== ==========
Bond Discount Amortisation 93 -
========== ==========
229,948 200,000
========== ==========
20) Net Debt Reconciliation
Group
============ =========== ====== ======== ============
Cash and cash equivalents 24,203 11,581 - - 35,784
============ =========== ====== ======== ============
Housing Loans (200,000) (35,000) - - (235,000)
============ =========== ====== ======== ============
Loan arrangement
fees - 1,492 432 (56) 1,868
============ =========== ====== ======== ============
Bond discount - 3,277 - (93) 3,184
============ =========== ====== ======== ============
Non-Housing Loans (55) - - - (55)
============ =========== ====== ======== ============
At 31 March (175,852) (18,650) 432 (149) (194,219)
============ =========== ====== ======== ============
21) Recycled capital grant fund
At 1 April 628 675
======== ========
Grants recycled 80 62
======== ========
Grants transferred from other PRP's 148 -
======== ========
Recycling of grant (717) (109)
======== ========
At 31 March 139 628
======== ========
Amounts 3 years old or older where repayment
may be required - 330
======== ========
22) Deferred capital grant
At 1 April 52,871 50,631 52,871 50,631
========= ========= ========= =========
Grant received in the
year 11,893 2,634 11,893 2,634
========= ========= ========= =========
Grant recycled from the
recycled capital grant
fund 717 109 717 109
========= ========= ========= =========
Grant recycled to the
recycled capital grant
fund (80) (62) (80) (62)
========= ========= ========= =========
Capital grant released
to revenue (440) (441) (440) (441)
========= ========= ========= =========
At 31 March 64,961 52,871 64,961 52,871
========= ========= ========= =========
Net deferred capital grant
due in less than one year 461 - 461 -
========= ========= ========= =========
Net deferred capital grant
due in more than one year 64,500 52,871 64,500 52,871
========= ========= ========= =========
At 31 March 64,961 52,871 64,961 52,871
========= ========= ========= =========
23) Pensions
The group participates in five pension schemes. Two of the
schemes, the North Yorkshire Pension Fund and the Teesside Pension
Fund, are defined benefit plans. The other three schemes are
defined contribution plans and are provided by Standard Life, the
National Employment Savings Trust workplace pension scheme (NEST)
and The Pensions Trust. The disclosures below relate to the
association's membership of the North Yorkshire Pension Fund and
the Teesside Pension Fund (the fund) which are part of the Local
Government Pension Scheme (LGPS). The funded nature of the LGPS
requires participating employers and its employees to pay
contributions into the fund, calculated at a level intended to
balance the pension liabilities with investment assets. The last
actuarial valuation was completed on 31 March 2022. The next
actuarial valuation of the fund will be carried out on 31 March
2023.
The Fund Administering Authorities, North Yorkshire Country
Council and Middlesbrough Borough Council, are responsible for the
governance of the funds. The assets allocated to the association in
the funds are notional and are assumed to be invested in line with
the investments of the funds for the purposes of calculating the
return to be applied to those notional assets over the accounting
period. The funds are large and hold a significant proportion of
their assets in liquid investments. As a consequence, there will be
no significant restriction on realising assets if a large payment
is required to be made from the funds in relation to an employer's
liabilities.
The assets are invested in a diversified spread of investments
and the approximate split of the assets for the fund as a whole is
shown below.
23) Pensions (continued)
There are a number of key risks associated with the fund in
relation to accounting:
Asset volatility
The liabilities used for accounting purposes are calculated
using a discount rate set with reference to corporate bond yields.
If assets underperform this yield this would create a deficit in
the accounts. The fund holds a significant proportion of growth
assets which, while expected to outperform corporate bonds in the
long term, creates volatility and risk in the short term in
relation to the accounting figures. A decrease in corporate bond
yields will increase the value placed on the liabilities for
accounting purposes although this will be marginally offset by the
increase in the assets as a result.
Inflation risk
The majority of the pension liabilities are linked to either
salary or price inflation. Higher inflation expectations will lead
to a higher liability value of the fund. The fund assets are either
unaffected, or loosely correlated, with inflation, meaning that an
increase in inflation will increase the fund deficit.
Life expectancy
The majority of the fund's obligations are to provide benefits
for the life of the member following retirement, so increases in
life expectancy will result in an increase in the fund's
liabilities.
Exiting employers
Employers who leave the fund may have to make an exit payment to
meet any shortfall in assets against their pension liabilities. If
the employer is not able to meet this exit payment the liability
may, in certain circumstances, fall upon the other employers in the
fund. Furthermore, the assets at exit in respect of 'orphan
liabilities' may, in retrospect, be insufficient to meet the
liabilities. This risk may therefore fall upon other employers.
'Orphan liabilities' are currently a small proportion of the fund's
overall liabilities. The key specific disclosures in relation to
the fund are shown below.
23) Pensions (continued)
Financial assumptions
The financial assumptions used to calculate the defined benefit
section liabilities under FRS102 are:
Discount rate 2.70% 2.10% 2.70% 2.10%
======== ======== ======== ========
Consumer Price Index (CPI)
inflation 2.90% 2.70% 3.20% 2.70%
======== ======== ======== ========
Pension increases 2.90% 2.70% 3.20% 2.70%
======== ======== ======== ========
Salary increases 4.15% 3.95% 4.20% 3.70%
======== ======== ======== ========
Mortality assumptions
Mortality assumptions are based on the recent mortality
experience of members within the fund and allow for expected future
mortality improvements. Sample life expectancies resulting from
these mortality assumptions are:
Males
======= ======= ======= =======
Members aged 65 (current life
expectancy) 21.8 21.9 21.7 21.9
======= ======= ======= =======
Members aged 45 (life expectancy
at 65) 23.5 23.6 22.9 23.3
======= ======= ======= =======
Females
======= ======= ======= =======
Members aged 65 (current life
expectancy) 23.8 24.0 23.5 23.6
======= ======= ======= =======
Members aged 45 (life expectancy
at 65) 25.7 25.8 25.3 25.4
======= ======= ======= =======
23) Pensions (continued)
Amounts recognised in the surplus for the year
Current service
cost 745 567 3,083 2,352 3,828 2,919
======= ======= ======== ======== ======== ========
Interest expense
(see note 7) (10) (17) 797 671 787 654
======= ======= ======== ======== ======== ========
Past service
cost/Curtailment - 78 - 296 - 374
======= ======= ======== ======== ======== ========
735 628 3,880 3,319 4,615 3,947
======= ======= ======== ======== ======== ========
Amount of gains and losses recognised in other comprehensive
income
Actuarial gains/(losses)
on fund assets (52) 8,378 10,154 20,105 10,102 28,483
========== ========== ========= =========== ========== ===========
Actuarial (losses)
gains on fund liabilities 3,397 (6,726) 3,418 (25,708) 6,815 (32,434)
========== ========== ========= =========== ========== ===========
Actuarial gains/(losses)
before restrictions 3,345 1,652 13,572 (5,603) 16,917 (3,951)
========== ========== ========= =========== ========== ===========
Actuarial gains not
recognised due to
restrictions (2,800) (376) - - (2,800) (376)
========== ========== ========= =========== ==========
Total actuarial gains/(losses) 545 1,276 13,572 (5,603) 14,117 (4,327)
========== ========== ========= =========== ==========
23) Pensions (continued)
Amounts recognised in the Statement of Financial Position
Present value of
funded obligations (32,797) (35,243) (135,871) (134,914) (168,668) (170,157)
===========
Present value of
unfunded obligations - - (210) (208) (210) (208)
===========
Closing fair value
of assets 35,973 35,619 110,077 97,989 146,050 133,608
Fund gain/(deficit)
before restrictions 3,176 376 (26,004) (37,133) (22,828) (36,757)
===========
Assets not recognised
due to asset restrictions (3,176) (376) - - (3,176) (376)
Fund net asset/(deficit)
recognised - - (26,004) (37,133) (26,004) (37,133)
===========
According to FRS102 the pension asset relating to the North
Yorkshire pension fund should not be recognised unless it leads to
lower employer contributions or a refund, this will become clearer
following the next tri annual actuarial valuation. Therefore, the
asset is not recognised on the Statement of Financial Position.
Reconciliation of fund liabilities
Opening fund liabilities (35,243) (27,845) (135,122) (106,318) (170,365) (134,163)
===========
Current service
cost (745) (567) (3,083) (2,352) (3,828) (2,919)
===========
Curtailments - (78) - (296) - (374)
===========
Interest cost (735) (634) (2,852) (2,426) (3,587) (3,060)
===========
Contributions by
participants (99) (108) (442) (472) (541) (580)
===========
Actuarial gains/(losses)
on fund liabilities 3,397 (6,726) 3,418 (25,708) 6,815 (32,434)
===========
Net benefits paid 628 715 2,000 2,450 2,628 3,165
Closing fund liabilities (32,797) (35,243) (136,081) (135,122) (168,878) (170,365)
===========
23) Pensions (continued)
Reconciliation of fund assets
Opening fair value of
fund assets 35,619 26,911 97,989 76,421 133,608 103,332
========= ========= ========== ========== ========== ==========
Actuarial (losses)/gains
on fund assets (52) 8,378 10,154 20,105 10,102 28,483
========= ========= ========== ========== ========== ==========
Interest income 745 651 2,055 1,755 2,800 2,406
========= ========= ========== ========== ========== ==========
Contributions by employer 190 286 1,437 1,686 1,627 1,972
========= ========= ========== ========== ========== ==========
Contributions by participants 99 108 442 472 541 580
========= ========= ========== ========== ========== ==========
Net benefits paid (628) (715) (2,000) (2,450) (2,628) (3,165)
Closing fund assets 35,973 35,619 110,077 97,989 146,050 133,608
Actual return 693 7,475 12,209 21,860 12,902 29,335
24) Reconciliation of surplus to net cash inflow from operating
activities
Surplus for the year (note 28) 2,496 12,540
Adjustments for:
* Depreciation of tangible fixed assets 9,155 9,201
* Amortisation of intangible fixed assets 116 94
* Grant amortisation (440) (441)
* (Increase)/decrease in stock (5,519) 1,861
* Increase in trade and other debtors (1,585) (447)
* Increase/(decrease) in trade and other creditors 1,012 (343)
* (Decrease) in deferred capital grants (80) (62)
* Pensions costs less contributions payable 2,201 1,321
* Proceeds from disposal of tangible fixed assets 4,012 2,941
* Amortisation of loan arrangement/Bond discount 149 0
Adjustments for investing or financing activities:
* Interest paid 14,564 8,422
* Gain on disposal of fixed assets (1,203) (731)
* Interest received (25) (30)
Net cash inflow from operating activities 24,853 34,326
25) Capital commitments
Capital expenditure contracted for
but not provided in the financial
statements (development schemes) 85,688 87,130 85,688 87,130
Capital expenditure approved but
not contracted for - 18,755 - 18,755
85,688 105,885 85,688 105,885
Capital commitments will be funded
by:-
Social Housing Grant 13,628 13,564 13,628 13,564
Sale of properties 35,597 13,458 35,597 13,458
Existing reserves/loan facilities 36,463 78,863 36,463 78,863
85,688 105,885 85,688 105,885
Operating Lease commitments
Amounts due: Within one year 1,116 1,087
Within two-five years 728 1,530
Greater than five years 6 -
26) Financial instruments
The policy on financial instruments is included in the notes to
these financial statements.
Financial assets measured at amortised cost comprise:
Fixed asset investments 166 197 166 197
Short term debtors 3,196 2,934 3,195 2,932
Total financial assets 3,362 3,131 3,361 3,129
Short term debtors comprise net rental debtors, trade debtors,
other debtors and amounts due from group undertakings. Financial
liabilities measured at amortised cost comprise:
26) Financial instruments (continued)
Short term liabilities 18,530 12,080 18,737 12,286
Housing loans 235,000 200,000 235,000 200,000
Total financial liabilities 253,530 212,080 253,737 212,286
Short term liabilities comprise rent and service charges
received in advance, trade creditors, other creditors, accruals and
deferred income and amounts due to group undertakings. Details
relating to the housing loans are included in Note 19.
27) Related party transactions
The group consists of the following entities:
Beyond Housing Limited (the association)
The association is an exempt charity registered with the
Financial Conduct Authority (FCA) as a registered society and with
the Homes and Communities Agency as a Registered Provider and is
the parent organisation of the group.
Beyond Housing Development Limited
BHD is a non-charitable private limited company, and wholly
owned subsidiary of the association, established for the purpose of
carrying out construction activity.
Beyond Housing Sales Limited
BHS is a non-charitable private limited company, and wholly
owned subsidiary of the association, established for the purpose of
transacting outright property sales activity.
Neither Beyond Housing Developments Limited or Beyond Housing
Sales Limited traded during 2021/22 and as such there was no
material transaction between Beyond Housing Limited and its
subsidiaries during 2021/22.
The group has a relationship of joint control over the following
entities:
Prosper Ltd
The group is a member of Prosper (formally NE Procurement Ltd),
a consortium set up by northeast based social landlords for the
purpose of creating commercial procurement savings for planned
maintenance and new build works and investing in the improvement of
member organisations' communities.
27) Related party transactions (continued)
The Spirit Partnership (Spirit)
The group is a member of Spirit, a consortium set up by
northeast based social landlords to build quality affordable homes
more cost effectively and efficiently.
Invoiced to Prosper Ltd in respect of services
provided 50 53
======== ========
Invoiced by Prosper Ltd in respect of services
provided 3 8
======== ========
Purchase of property development services
from the Spirit Partnership 9,981 8,280
======== ========
Amounts owed by Prosper Ltd at year end 12 14
======== ========
Amounts owed to the Spirit Partnership at
year end 1,300 715
======== ========
All transactions are conducted on an arms-length basis
28) Prior Year Adjustment
During 2021/22 it was identified that a number of properties had
rents incorrectly classified by the legacy organisation (Coast
& Country Housing(CCH)) over a period from 2011 to 2017 and
through to 2022 at Beyond Housing. This was only detected in
2021/22. The properties classified as intermediate rent should have
been classified as affordable rent by CCH as they had been
delivered under the affordable home's programme/framework.
Historically the rent set on these properties did not follow the
correct rent policy aligned to the grants received and had led to
some tenants (current and former) being over charged over a
twelve-year period up to 31 March 2022. This has been reviewed
during 2021/22 with a number of professional advisors and an
estimated liability totalling cGBP2.5m to correct the rents of
customers (incl. rebates) effected back to the start of tenancy has
been calculated at 31 March 2022 (GBP2.19m 31 March 2021 with
GBP0.31m in year). Due to this being an error, a prior year
adjustments have been
processed.
Group Statement of Comprehensive
Income 2021
Turnover 75,446 (334) 75,112
========== =========
Total comprehensive surplus for
the year 8,546 (334) 8,212
=========
29228) Prior Year Adjustment (continued)
Creditors : Amounts falling
due within one year (42,512) (2,194) (44,706)
Reserves
Income and expenditure
reserve 93,106 (1,048) 92,058
Income and expenditure
reserve movement in year 8300 (252) 8,048
Restricted reserve brought
forward 2,484 (812) 1,672
Restricted reserve movement
in year 184 (82) 102
Total reserves 104,074 (2,194) 101,880
Association Statement of Comprehensive
Income 2021
Turnover 75,446 (334) 75,112
========= ======== =========
Total comprehensive surplus for
the year 8,549 (334) 8,215
Creditors : Amounts falling
due within one year (42,717) (2,194) (44,911)
Reserves
Income and expenditure
reserve 93,375 (1,048) 92,327
Income and expenditure
reserve movement in year 8303 (252) 8,051
Restricted reserve brought
forward 2,484 (812) 1,672
Restricted reserve movement
in year 184 (82) 102
Total reserves 104,346 (2,194) 102,152
The adjustment also effects the cashflow statement at note 24.
The surplus for the year 2020/21 and creditors movement figures
have been restated in-line with note 28 above.
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END
FR UOUURUAUKAAR
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September 13, 2022 09:08 ET (13:08 GMT)
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