Annual Financial Report

Beyond Housing Ltd

27 September 2023

 

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 2023

Contents	Page
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	42
Association statement of comprehensive income	43
Group statement of financial position	44
Association statement of financial position	45
Group statement of cash flows	46
Group statement of changes in reserves	47
Association statement of changes in reserves	48
Notes to the financial statements	49

Board members
J D Hayward (Chair)
P A Baren (Senior Independent Director)	Retired - 23 September 2022
K Abson
R Du Rose (Chief Executive)
H J Flack	Appointed 19 May 2022
S D Hardwick	Retired - 23 September 2022
S E Nattress	Appointed 19 May 2022
C Owston	Appointed 23 September 2022
G Taylor (Senior Independent Director)
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 Chartered Accountants 3 Hardman Street Manchester M3 3AT	Devonshire's Solicitors LLP 30 Finsbury Circus London EC2M 7DT	Natwest Bank Plc 1 Trinity Gardens 2nd Floor, Broadchare Newcastle upon Tyne NE1 2HF

The board presents its annual report and audited consolidated financial statements for Beyond Housing for the year ended 31 March 2023.

The consolidated financial statements include the results of Beyond Housing Ltd, for the year ended

31 March 2023. They also include the results of its subsidiary companies Beyond Housing Developments Limited and Viola Homes 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 2023 Beyond Housing (the 'group') comprised the following entities:

·    Beyond Housing Limited (BHL).

·    Beyond Housing Developments Limited (BHDL).

·    Viola Homes Limited (VHL) (formerly Beyond Housing Sales Limited (BHSL), name change 20 March 2023).

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 VHL 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

I am pleased to introduce the 2022/23 annual report and accounts, which highlight another challenging year with many successes for Beyond Housing against the economic backdrop, inflationary pressures, cost of living challenges and regulatory requirements. The year also focused on better understanding the quality of our homes, particularly homes that are susceptible to mould and damp.

Overall business performance for the year end 31 March 2023 resulted in an increased group turnover to £91.4m (£76.5m 2022) and a higher surplus before tax of £7.8m (£2.5m 2022). We strengthened our balance sheet with overall reserves increasing to £157.7m (£118.4m 2022). The operating surplus declined to £14.9m (£17.2m 2022), due to nutrient neutrality regulation and planning delays impacting the development of new homes and revenues. Inflationary pressures significantly increased overall costs across the business, and we had a number of one-off costs; including the £2.7m impairment cost to demolish Beyond Housing's only high-rise block (Spencerbeck House) and a rent refunds provision of circa £700k.

Beyond Housing maintained the regulatory V1 financial viability grading and its annual credit rating

assessment from Moody's as A2 but with a move to the status of unstable.

Supporting customers has and always will remain the key priority, especially given the cost-of-living crisis. Once again, we supported customers with Universal Credit and other benefit claims helping them to protect their income and pay their rent. Beyond Housing collected 99.6% of rents and helped customers claim £1.9m of additional benefits. Employment and training was a key focus, and we were extremely proud to support new apprentices.

Despite the challenging building environment, we completed 210 homes and made a start on 48 homes working towards our overall goal to meet circa 2,750 homes by 2030/31. Of the 210 homes, 141 were affordable rent, 17 shared-ownership, 2 rent to buy, and 50 were for outright sale. A Homes England grant of £7.2m was received during the year.

We made significant progress with the £16m project to regenerate Church Lane (Redcar) which will complete in the 2023/24. We continued to support homelessness initiatives in both regions, providing 12 homes in Redcar and 8 homes in Scarborough for rough sleepers.

We invested £19.9m in 58,000 planned and routine repairs, and a further £6.9m in major repairs. Our capital works programme delivered 268 window replacements, 273 new doors, 26 replacement heating systems, 464 energy components, and 766 new/replaced 'A' rated boiler installations. In addition, we worked with Tees Valley Combined Authority and other providers to achieve a successful

£3.2m bid for second wave decarbonisation funding.

Our Reach & Respond service continues to support 9,059 (c8,972 at 2022) customers to live independently in their own homes using assistive technology and a responder service. The service is accredited under the Telecare Services Quality Standards Framework.

Following on from remote working during the pandemic, colleagues moved to agile working during 2022/23 and now spend a combination of their time in the office, at customer locations, or at home. The overall colleague engagement survey analysis at the end of 2022/23 indicated that 74% of colleagues think Beyond Housing is a good place to work.

We were pleased to receive The Royal Society for the Prevention of Accidents (RoSPA) President's Award, which recognises that we have achieved their gold standard for 10 consecutive years. In addition, we achieved accreditation from the Institute of Customer Service for our customer service training.

We continually reviewed our key risks during 2022/23, given the economic and cost of living pressures it was prudent to do so. The impact was both immediate and longer term, and our business plans were constantly reviewed, and stress tested to mitigate and control the increased risks.

We were disappointed to find a significant error in the way rents had been previously set within our legacy organisations - dating back to 2010. We self-referred this matter to the Regulator of Social Housing (RSH) and received a regulatory judgement that resulted in a down grade to our governance grading to G2. We continue to work closely with the regulator to prove that our current controls and processes are robust, and we have already refunded most of the customers who were overcharged.

Plans for 2023/24 include further investment in our existing stock, development of new homes and the completion of the Church Lane North regeneration project in Redcar delivering 33 new homes. In Scarborough we also expect completion of our 113 outright sale units at our Mill Meadows development. In addition, our other priority is to improve overall customer satisfaction using the new Tenant Satisfaction Measures (TSM's) as our key indicators. We will further invest in and enhance our voids and repairs offer for customers. ICT and technology change will continue to develop a better 'self-serve' offer that is beneficial to customers and more effective for the business.

James D Hayward RD Chair

Overview of Beyond Housing and our 2020-2025 strategy

Beyond Housing is a registered Community Benefits Society (CBS), with a group turnover of £91.4m. We own and manage 15,184 homes across nine local authorities in the north-east/yorkshire, housing over 30,000 customers. The current regulatory grading is G2/V1 from the Regulator Social Housing. We employ over 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 'Reach and Respond' which supports older and vulnerable people to live independently in their homes for longer.

As a business we aim to deliver 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 higher net surplus before tax of £7.8m (£2.5m 2021/22), as 2021/22 included one off refinancing costs of c£7.1m. We invested £42.7m in new homes and £39.2m revenue spent 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 (2020-25) revised to c2,750 by 2030/31, 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 neighborhoods 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 their 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 2022/23 our operating margin declined due to higher inflation across all costs, rising interest rates and these also impacted our higher Social Housing Costs Per Unit (SHCPU). Our financial performance and VfM metrics are explained in more detail later in this report. Our development program for new homes was hindered by planning (nutrient neutrality, planning delays) and wider economic constraints and units have been reprofiled into future years. Sales of new homes on our Mill Meadows, Filey development performed strongly and the regeneration of Church Lane, North Estate in Eston continued apace. We will continue to invest in our digital infrastructure e.g., 'Me and My Home', telephony and new Customer Resource Management (CRM) system.

In November 2022 we issued £40m of our retained bond through a forward purchase agreement. This means the pricing (gilt rate) was fixed with the bond recipient in November 2022, but the transaction completes November 2023 when the security and legal documents complete and the cash value is received. Our £250m bond was issued in May 2021, being £165m drawn on issuance and we now have

£45m remaining as retained. Our credit rating from Moody's in 2022 was A2 (unstable) a change from A2 (stable) due to the wider housing sector per downgrade to unstable as a result of more challenging economic environment.

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 our 2,000 new homes under our current strategy (2020-25 revised to 2,750 by 2030/31) 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.

To view the full announcement, please paste the following URL into the address bar of your browser.
http://www.rns-pdf.londonstockexchange.com/rns/8579N_1-2023-9-27.pdf 

 

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