Corporate Plan

Transcription

1 Corporate Plan

2 Creating better homes Trent Lane, Nottingham Pelham Homes Limited (previously Lets Select Ltd) is a wholly owned subsidiary of the Nottingham Community Housing Association (NCHA) Group. It was incorporated in 2004 as a commercial company to carry out any profit-making activity within the Group. Our main activity is providing housing for sale and market rent. Other activities include services such as architectural design and project management with the aim of generating a profit. Our principal aim is to generate profits that will be gift-aided back to NCHA to help to add more social value to the wider community. This profit for a purpose approach also feeds into the Group s wider value for money objectives. Our values To apply an ethical and sustainable approach to all of our business activities To achieve value for money in all areas of our business To meet the needs of local communities, local authorities and partner organisations Our commitments 1 2 Maintain our financial viability by operating within loan covenants and generating profits each year over the life of this plan to gift aid or reinvest in our vision. Maintain our customer focus by ensuring our plans and decision making are informed by our customers and partners needs and demands. We will build new homes a year. Our vision To maximise opportunities to work in partnership with stakeholders 3 Maintain growth by building 50 to 75 new homes per year using our development project management and sales services. We will also work through our jointly owned company POD LLP, to assist in the property development plans of others. Building profit for a purpose 4 Maintain strong management services in the area of market rent as long as Pelham Homes continues to own this product. 2

3 Delivering our plan Our objectives At the heart of our corporate plan are a number of objectives that will help us generate profit to reinvest through NCHA and benefit communities 1. We will look for a return of up to 5% on low-risk activity 5% -10% on medium-risk activity 10% -15% or above on higher risk activity (which includes higher capital investment projects). These will vary where joint ventures are proposed. 2. We will complete a funding agreement that will allow us to complete our target of building 50 to 75 homes per year for sale or market rent, while also continuing with existing services. 3. We will enter into joint venture agreements with landowners and housebuilders to share risks and benefits and further our objectives of delivering new housing. 4. We will complete a programme of stand alone schemes where Pelham Homes is the sole provider of housing for sale and/or market rent. 5. We will churn market rent stock for eight to 10 years before sale. 6. We will complete the disposal of currently held market rent stock either through sales to individual buyers or via a portfolio sale to investors. This will allow us to maximise the funds available to the company for investment in new projects. 7. The NCHA Group s profit making services will be channelled through Pelham Homes. These will include architectural services to external clients and development project management via POD (an LLP owned equally by Pelham Homes and the Longhurst Group). 8. We will make gift aid payments to NCHA from profits and also retain working capital in the company. We will continue to invest to maintain the capital value of the market rent stock prior to disposal. This balanced approach will include using available funds as working capital for additional investment in profit-making projects. 9. We will continue to manage market rent stock effectively to provide a revenue return on assets each year. 10. We will promote the use of the Pelham Homes brand across the NCHA Group for any commercial and sales-related activity and also where staff feel it is more appropriate to use. 11. We will maintain our investment in a training company, Access Training (East Midlands) Limited, through a joint venture known as 3 Together with Futures Housing Group. This gives us the potential to add social value to the NCHA Group, grow the business and potentially earn profit dividends. 4

4 Where we work Our work is spread across the East Midlands region. We currently have sites secured in Nottingham, Leicestershire and Loughborough. Risks Stanton under Bardon, Leicestershire No. of homes: 25 Start on site date: Spring 2018 Estimated Completion date: Summer 2019 Mount Sorrell, Loughborough No. of homes: 2 Start on site date: March 2016 Estimated Completion date: Autumn 2017 Trent Lane, Nottingham No. of homes: 78 Start on site date: Early 2018 Estimated Completion date: 2020 The Group recognises the risks that come with diversification and the need to align the skills of Board members and staff delivering the corporate plan to any new / diversified business activity. These risks include: 1. Deteriorating market rent stock with increased voids and insufficient maintenance allowance. 2. Failure to effectively manage the business through detrimental environmental and economic changes, such as a housing market failure. 3. Failure to develop and sell properties for profit or failure to move towards new commercial activities that could enhance the profitability and viability of the company. 4. Reduced profitability of other income streams, such as through Pelham Architects, POD and our external lettings service. 5. Failure to effectively manage/ balance the conflicting charitable and social objectives of NCHA with the commercial objectives of Pelham Homes. 6. Failure to recruit, develop and retain the right Board members and staff with the right combination of commercial skills and experience. Both the Pelham Homes corporate plan and NCHA corporate plan backed by our risk maps and strategies for delivery go some way towards mitigating these risks. 6

5 Value for money and the financial plan Our corporate plan is supported by a full, 30-year financial plan. It incorporates the latest stock condition survey and planned maintenance figures adjusted to reflect the sales programme. It demonstrates how, in the current financial and economic environment, Pelham Homes can reasonably be expected to meet its financial commitments and achieve its strategic objectives. The plan includes assumptions on the financial implications of each of the company s activities and wider economic assumptions. Where the Group s assumptions are applicable to the company, we have used these instead. 8 Stock condition remains a key factor in this plan until the disposal plan is achieved. We have a comprehensive review of stock condition to keep properties in a suitable condition, to keep customer satisfaction high and to maintain rental income. Our disposals strategy remains key. The intention is to achieve the best possible return for Pelham Homes while also improving the scope for future investment in new projects. Financial projections Year Ended 31st March Income From Lettings: Rent Receivable Service Charges Less Voids (35) (16) (13) (12) (12) Total Income From Lettings Income From Non-Letting Activities: Properties Developed For Sale ,208 14,492 Non-Letting Activities Total Income From Non-Letting Activities ,537 14,821 Year Ended 31st March Operating Costs: Management Costs (67) (56) (44) (40) (41) Service Costs (140) (133) (126) (125) (128) Routine Maintenance (82) (84) (72) (80) (97) Planned Maintenance (179) (100) (85) (81) (83) Bad Debts (7) (11) (9) (8) (8) Other Costs (93) (85) (76) (74) (76) Total Operating Costs (567) (468) (412) (409) (432) Cost Of Non-Letting Activities: Properties Developed For Sale (373) 0 0 (12,632) (12,916) Non-Letting Activities (379) (309) (274) (282) (282) Total Cost Of Non-Letting Activities (752) (309) (274) (12,914) (13,198) Profit On Sale Of Existing Stock Profit From Joint Ventures , Surplus Before Interest & Tax ,986 1,893 1,886 Interest Receivable Interest Payable (308) (340) (436) (447) (445) Gift Aid (114) (284) (776) (723) (721) Surplus Before Tax Tax 0 (82) (233) (217) (216) Surplus After Tax Reserves Brought Forward 6,257 6,371 6,573 7,116 7,623 Retained Surplus 6,371 6,573 7,116 7,623 8,127 Our corporate plan is supported by a full, 30-year financial plan. The Pinnacle, Northampton

6 Group structure NCHA Ltd Community Benefit Society I Registered with HCA I Charitable 12 Board Members I 23 Shareholders Pelham Homes Company Limited by Shares 3 Independent Directors I 4 Non-Independent Directors Board of management Michael Khouri-Bent Founder of LETS Move - Nottingham. Serving on Boards of Nottingham City Homes, Nottingham City Homes RP and is Vice Chair of Tuntum HA. Full member of the Association of Corporate Governance Practitioners and Board member for Nottingham s Local Strategic Partnership (One Nottingham) and Nottingham Young Creatives Trust. Lucy Dadge BA, DAM, MBA, FRICS Qualified chartered surveyor, currently in health and social care commissioning. Formerly director in NHS hospitals. Currently a Director in the Mid Nottinghamshire Commissioning Groups. Also a Director of 2 companies based in Northants, specialising in health and well-being and primary care. Peter Ellis Llb Recently retired solicitor and now a consultant. Fee paid Judge of the Property Chamber, Chair of Nottingham City Heritage Panel, Chair of Nottingham Castle Foundation, council member St John s Theological College, Board member of Nottingham Ice Arena. Mike Andrews Chief Executive of NCHA. Mike has worked in local government and housing associations for over 30 years, is a Member of the Regional Executive of the National Housing Federation and Chair of Access Training (East Midlands). POD LLP 2 Members - LSL and Longhurst Group Board with 2 Representatives from Longhurst Group and 2 from LSL Pelham Waterside LLP Langar Investments 2 Directors 1 from Pelham Homes 1 from Langar Investments Access Training Company Limited by Shares 5 Directors 2 from 3T, 2 Independents, and 1 Exec Director 3T Company Limited by Guarantee 2 Members - LSL and Futures Housing Group 2 Directors - 1 from LSL and 1 from FHG Gordon Fisher A retired Fellow of The Royal Institution of Chartered Surveyors who worked in private practice specialising in the critical assessment and valuation of schemes of new residential developments and portfolios of existing residential properties throughout the East Midlands area. Formerly a consultant with King Sturge. Paul Casey BA(Hons) MCIH Paul specialises in asset management and development functions. Currently a Director of an affordable housing consultancy that provides development and asset management services to small developers and a number of social housing providers. Associate director of Savills Housing Consultancy. Allan Fisher BSc(Hons), PG (DIP), Msc Director of Development and Sales for NCHA. Prior to NCHA worked in a planning department, large housing associations and a private house builder. Company Secretary of POD. Brian Sweeney () BA(Hons), CIPFA Assistant Director of Finance for NCHA. Brian has worked in local government and housing associations for over 20 years. 10

7 Contact Pelham Homes 12/14 Pelham Road Sherwood Rise Nottingham NG5 1AP T: or