Northern Ireland Housing Association Consolidated Accounts September 2016

Transcription

1 Northern Ireland Housing Association Consolidated Accounts October

2 Background to consolidated accounts NI data from published accounts Number of Northern Ireland 1 Associations Period covered Cost of Housing Stock (NBV) Number of people employed (FTE) England,Wales and Scotland data Associations Associations Associations Associations 2016 refers to years ends from 31 December 2015 to 31 March ,297m ,075m (restated) ,275m , , ,959 Sourced from published global accounts for 2015 by regulators in each jurisdiction 2

3 The Total Number of Units under management has increased by 13.8% from 41,948 to 47,747 over 4 years with 1,673 new units in Number of Units under management ,735 34,644 33,354 31,617 Equity sharing Rented - shared Rented - self contained

4 Average rent comparison There is limited information disclosed in most accounts to explain rent policy but average decontrolled rent has risen to 79 which is an average increase of 3.1% with a range of 1.5% to 4.85% based upon information from 15 Associations. Average rent increase A B C D E F G H I J K L M N O Average Rent Increase 4

5 Key financial highlights Income & expenditure account 2016, (restated),000 Turnover 282, ,194 Operating costs 215, ,192 Operating surplus 66,888 58,002 Surplus on sale of assets 844 1,125 Interest receivable Interest payable 31,782 29,879 Surplus before transfers 42,443 26,966 Turnover up by 9.97% Operating costs up 8.4% Operating surplus up 15.3% Interest paid up 6.4% Surplus up by 57.4% 5

6 NI Consolidated Income and Expenditure trend to The sector has grown consistently throughout the period with turnover increasing by 39.3% over the 3 financial years with 20% reflecting impact of new SORP and an increase in operating surplus of 28.2%of which 3% reflects the impact of new SORP 300, , , , ,000 50, Turnover Op Costs Op Surplus Int Payable Surplus (before transfers) 6

7 Interest payable 2012/ /16 Despite the small reduction in bank base lending rate, borrowing has increased, resulting in increasing interest payable from 2012/13 to 2015/16 and a steady increase year on year INTEREST PAYABLE Interest payable / / / /16 7

8 Average interest rates paid The sector overall average interest rate during 2015/16 was 7.83%, with average interest rates ranging from 0% to 16.3%. Excluding loans from the Departmental the average rate was around 5% Average interest rates paid 2015/ Lowest Average interest rates paid 2015/16 Highest 8

9 Gross margin has increased between 2015 and 2016 and is only below 2014 levels due to the impact of the new SORP % % % Gross margin increases The increase in turnover was not matched by an equal increase in operating costs in This led to an improvement in gross margin during 2016 compared to Gross margin is lower than the level recorded in reflecting the impact of grant treatment and new accounting for co-ownership sales. 9

10 Analysis of resources expended Depreciation has increased as a percentage of the total expenditure and other costs have fallen but overall expenditure has remained proportional year on year. Analysis of 2016 expenditure Analysis of 2015 expenditure Other costs 40% Wages & salaries 26% Other costs 42% Wages & salaries 26% Interest payable 13% Deprecia tion 21% Interest payable 13% Depreciat ion 19% September

11 Employee Costs The sector now contributes over 60m through remuneration to the local economy. Between 2015 and 2016 staff numbers have increased by 5.7% whilst average remuneration has increased by 6.6% but only 0.5% when pension costs are excluded. Pension costs as a percentage of total remuneration has risen over the 5 years from 7% to 10.4%. Analysis of salaries and wages 2012 to ,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000, ,023 19,245 18,939 19,920 21, Salaries Social Security costs Pension costs Other 11

12 Key financial highlights Balance sheet (restated) 000 Gross book value 3,788,162 3,498,449 Depreciation 490, ,986 Net book value 3,297,395 3,075,462 Cash & Short Term Investments Total assets less current liabilities 223, ,124 3,449,897 3,184,333 Long term loans 714, ,172 NBV up by 8.3% Depreciation up by 16% NBV up 7.2% Cash & ST investments up by 44.1% Loans up 3.3% 12

13 NI Consolidated Balance Sheet trend to The sector s balance sheet has grown over the past 3 financial years; GBV of housing is up 23.8%, net current assets are up 29% and cash and short term investments are up 72.3%. This growth has been sustainable through the underlying strength of the balance sheet Balance Sheet 000s GBV Housing Net current assets Cash and Short term investment 13

14 Movement in NBV of housing properties the NBV in 2016 has increased as result of additions exceeding depreciation and impairments. Value in millions 3,400 3,300 3,200 3,100 3,000 2,900 2,800 2,700 2,600 3,276 3,297 3,044 3,075 2, Source: Consolidated Accounts 14

15 The cost per house has increased between 2014 and 2016 to an average of 79k per unit Average GBV per unit , Average GBV per unit 15

16 Borrowing is becoming an increasingly important source of finance rising by over 78m from 691m in 2015 to 769m in Total Borrowing* 2015/ / *includes overdrafts, bank loans, TFHC bonds and other loans. Total Borrowing 16

17 Rental debtors have increased by 14.4% while bad and doubtful debts have only increased by 5%. This is in contrast to Great Britain where the impact of Welfare Reform has seen a sharp rise in the provision for bad and doubtful debts Change % Rental debtors - technical 5,370 4, Rental debtors non technical 6,112 5, Provision for bad and doubtful debts (3,920) (3,732) 5.0 7,562 6, October

18 Northern Ireland ratios Working capital Current assets/ Current liabilities Gearing Borrowing plus pension liability/total capital and reserves % % Return Operating Surplus/Total assets less current liabilities % %

19 How do we compare to England and Scotland and Wales Number of Units managed England 2,647,395 Scotland 285,000* Wales 157,324 N Ireland 47,747 * As at 31 March

20 Key financial highlights England m Scotland m Wales m Turnover 16,268 1, Operating costs 11,672 1, Turnover up by 4.2% Operating surplus 4, Operating costs up 9.2% Surplus on sale of assets Operating surplus up 11.3% Interest payable 2, Interest paid down 1.2% Surplus before transfers 3, Surplus up 26.6% September

21 Key financial highlights England m Scotland m Wales m Gross book value 138,077 12,950 6,290 Capital grant 44,886 7,795 3,017 Depreciation 9, Net book value 83,611 5,005 2,855 Cost up by 5.4% Capital grant up 1.7% Depreciation up % Total assets less current liabilities 93,915-3,235 Long term loans 50,858 3,563 2,293 NBV up 6.77% Loans up 1.0% September

22 Our profitability margins are strong both at operating and net profit levels compared to peers Profitability ratios Net margin Operating margin Northern Ireland Wales Scotland England 22

23 Income has grown as a result of FRS 102, as UK mainland results reflect 31 March 2015 year ends. Interest payable growth reflects the growing need to privately finance development Growth ratios Percentage increase year on year 18.6 England Scotland Wales Northern Ireland Income Operating surplus Interest payable

24 Borrowing has increased across all regions, reflecting lower interest rates and an increased investment in the sector. Growth ratios Percentage increase year on year Long term loans 3.3 England Scotland Wales Northern Ireland 24

25 Debt servicing ability England 23,931 Wales 14,500 N Ireland 16,276 Debt per unit Borrowing per unit reflects increased borrowing as a result of lower interest rates and increased investment in property during the year. Gearing NI gearing is similar to Wales and has increased year on year. England 98.1% Wales 63.0% N Ireland 64.4% 25

26 In summary Sector well positioned financially with growth in surplus in current year of 15% compared to 8% in Wales, 18% in Scotland and 11% in England. Growth has been positive and so far it appears to be sustainable can this continue into the future? The surplus for the year allows the sector to take on additional borrowing and keep building and providing much-needed new homes. The indebtedness of the sector is rising and to repay this, and to achieve more affordable borrowing, surpluses are required. 26

27 Thank you This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it PricewaterhouseCoopers LLP. All rights reserved. In this document, refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom) which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.