Record surplus thanks to strong sales

Affinity Sutton reports record surplus thanks to strong sales

Affinity Sutton has reported a record surplus of £44.3M for the year to 31 March 2010, more than double the figure for the same period last year.

Revenue for the Group rose £36.3M from £238M in 2008/09 to £274.3M. 

The increased surplus was aided by a £12.1M decrease in impairment for the year from £13.5M in 2008/2009 to £1.4M.  Affinity Sutton also generated a greater surplus on sales – selling 352, mostly shared ownership properties in 2009/2010, up 15% on the previous year, and generating profit from sales of £5.9M.

A reduction in the cost of debt, thanks to sustained low interest rates, annual efficiency savings, including a reduction in staff numbers despite an increase in the number of properties under management by Affinity Sutton – also contributed and saw the business for social purpose’s surplus more than double from £19.6M last year to £44.3 in 2009/10.

As a not-for-profit business the funds will be entirely reinvested into the Group’s new housing developments and current homes and communities and has facilitated the creation of a new charitable trust.   

The Affinity Sutton Community Foundation has been endowed with £19M of free funds - intended to generate further monies over time - to support Affinity Sutton’s work in its communities in the long term. This builds upon an investment of £2M in community investment work in 2009/10 and £1.5M of support secured in external funding.  The creation of the new Community Foundation seeks to protect and extend Affinity Sutton’s community investment activity into the future.

Mark Washer, Group Finance Director, said:  “A healthy financial position means we can continue to thrive as an independent business seizing opportunities for social results.  We need substantial surpluses to maintain our vital work in meeting housing need. Our social business ethos ensures that the all of the funds generated will be re-invested in improving our housing, in new homes and in our communities.   The creation of the new Affinity Sutton Community Foundation reinforces our commitment to supporting our communities locally and creating opportunities to help them to thrive.”

 Highlights from this year’s financial statements and across 2009/10 include:

Maintaining our financial strength

• Affinity Sutton generated profit on sales of £5.9M.  The majority of these were shared ownership sales which allow access to the housing market for lower earners.
• A focus on value for money has seen £6M costs removed from the business as a result of recent mergers.  Procurement efficiencies of £12.2M are anticipated from 2010  and a recent internal restructure is expected to generate savings of £2M from 2011 onwards
• During the year Moody’s Investors Service confirmed the Group’s Aa2 rating stating that “it reflects the sound financial position; the strong cashflows and liquidity; the stable and experienced management team and manageable exposure to sales.” 
• Affinity Sutton completed a ground breaking agreement with major High Street lender Santander to launch an exclusive shared ownership mortgage product which will provide liquidity for low cost home ownership mortgages.

Building tomorrow’s communities today

• Affinity Sutton now manages 55,000 homes in over 100 local authorities.  At year end nearly 3,000 new homes were under construction or in the pipeline.  We also acquired 644 homes in Lee through a stock transfer from Lewisham Council in October 2009.
• Affinity Sutton spent more than £95M investing in its existing homes and £52.5M on major repairs and improvements.
• Affinity Sutton secured allocations from the Homes and Communities Agency of £150 million and exceeded all its targets, making it a top quartile performer in all programme categories.

Creating sustainable communities

• Graylingwell Park, the UK’s largest carbon-neutral development, opened its door to the public in March 2010.  This innovative scheme, a joint venture with Linden Homes, will offer over 800 new and converted homes close to Chichester City Centre – of which 40 per cent will be available for affordable rent and part buy/part rent.
• Affinity Sutton has announced a £1.2M investment in its retrofitting programme – Futurefit – which aims to develop improved low carbon knowledge within the sector and practical solutions to Government targets on reducing carbon emissions by 2020.
• Affinity Sutton gave a helping hand to nearly 18,000 vulnerable people through our retirement and support services. In a climate of reduced funding the organisation maintained £4.5M in external funding to support this work.

Getting closer to our customers

Committed to working closely with its residents locally, Affinity Sutton has established 14 resident led panels across the country tasked with scrutinising service delivery and helping drive improvements.

• The Audit Commission found that William Sutton Homes, part of Affinity Sutton, had ‘more strengths than weaknesses’ and has ‘excellent prospects for improvement’ when it underwent a Short Notice Inspection in January.