Annual Financial Report

Incommunities Treasury PLC

10 October 2024

 

Incommunities Limited publishes Annual Report and Financial Statements for 31 March 2024 

Incommunities Treasury Plc's parent company, Incommunities Limited ("Group"), announces the release of its audited financial statements for the financial year ended 31 March 2024. 

Incommunities Limited is one of the largest Registered Providers in Yorkshire owning and managing 22,833 homes (2023: 22,672) properties across Bradford and Huddersfield, of which 22,813 (2023: 22,652) are social housing properties highlighting our commitment to provide and maintain high-quality affordable housing for our communities. Our priority has always been to ensure the safety and welfare of our residents, staff and partners and improve our governance structure; this was validated by the regulator moving us from a G2 to G1. The regulator awarded us a top grade G1/V1 rating in September 2024,

Key financial highlights:  

-     S&P credit rating: 'A' (outlook negative).

-     Social housing turnover: up by £6.5m to £107.0m (2023: £100.5m)

-     Group turnover: up by £8.7m to £113.1m (2023: £104.4m)

-     Operating margin[1] for the year was 12.0% (2023: 5.3%)

-     Operating surplus for the year was £18.5m (2023: £12.2m)

-     Housing properties at cost (before depreciation and impairment) of £684.6m (2023: £640.5m)

-     The Group's reserves at the year-end are £102.7m (2023: £93.0m)

-     Improvements to existing stock: £26.4m (2023: £23.8m) 

-     New developments £53.3m (2023: £41.1m)

-     Covenant condition satisfied with healthy headroom.

Credit Rating
Our credit rating is 'A' (outlook negative). This was affirmed by S&P Global Ratings in March 2024.

Regulatory Judgement (G1/V1)

The group governance rating was upgraded to G1 in September 2024. This reflects our commitment to robust risk management oversight and informed decision making. The group retained its V1 status. We received a highly positive governance report from our external governance review.

Financial Commentary

Income from social housing rent of £107.0m increased by £6.5m compared to the prior year (2023: £100.5m). Group Turnover for the year was £113.1m (2023: £104.4m), an increase of £8.7m on the prior year. This movement is mainly due to the increase in the rental income from social housing letting compared to the prior year.

Our operating margin significantly improved from the previous year because of the decrease in pension accounting adjustments and the prior year rent provision of £1.2m.

We remain committed to investing in our housing stock to improve the quality of housing offered to our residents. During the year, the Group invested £26.4m (2023: £23.8m) through routine and planned work, and major repairs to existing stock. The capital investment includes £23.1m (2023: £18.9m) relating to major components replacement.

The Group's reserves at the year-end are £102.7m (2022: £93.0m), reflecting positive pension movements, operating surplus and the results from a review of fixed assets performed by management. 

Incommunities' ambitious development plans are a key element of the growth strategy and support customers to find a home they are proud of. Our development spends of over £53.3m is supported by a £22.6m grants successfully secured last year through the Affordable Homes Programme.

All financial loan covenants have been met and have significant headroom. Performance against the financial loan covenants is formally tested by the Group on 31st March each year.

Our Statement of Comprehensive Income to 31 March 2024 is shown below:

 

The full audited financial statements for Incommunities are available from the Investor Relations section of our website: https://www.incommunities.co.uk/investor-portal/.

Please contact our Executive Director of Finance John Wright for further information:   

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[1] The operating margin is based on the regulator's definition which deducts capitalised major repair from operating profit. If capitalised major repair is ignored, the operating margin is 16.5%.

 

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