Annual Report and Financial Statements

Annual Report and Financial Statements 2015/2016 1

2 Annual Report and Financial Statements 2015/2016

Contents Strategic Report of the Board and Operating and Financial Review Group Chair s Statement Group Chief Executive s Statement Business Strategy 2015 2018 Fiveyear summary Chief Financial Officer s Review Business Review Value for Money strategy Value for Money summary Community investment Governance Board structure Group Board Statutory, regulatory and other information Internal controls Viability statement Principal risks and uncertainties Statement of Board s responsibilities in respect of the Board s report and the financial statements Financial statements Independent Auditor s Report to Sanctuary Housing Association Statement of Comprehensive Income Statement of Financial Position Statement of Changes in Equity Statement of Cash Flows Notes to the financial statements Other information Appendix 1 Turnover, cost of sales, operating costs and operating surplus Appendix 2 Income and expenditure from social housing lettings Appendix 3 Explanation of transition to IFRS Advisors and other information Icon key Links to website 6 8 12 15 16 20 30 31 32 34 35 39 42 43 44 47 49 50 51 52 53 54 119 121 122 133 Strategic Report report Governance Financial statements Other information 3

Year at a glance 2015/2016 highlights Operating margin 2016 30.1% EBITDA 2016 257.7m 2015 28.9% 1 Cost of borrowing 2016 4.93% 2015 233.0m 2 Units in management 2016 100,160 2015 98,900 2015 5.15% Revenue 2016 669.0m Rent arrears 2016 2.79% 2015 3.15% Business plan projected units to be developed over the next 10 years 2016 24,000 2015 4,057 2015 623.8m Units onsite and in development 2016 4,381 2015 3,722 1 Operating surplus before pension exit costs as a percentage of turnover 2 Earnings before interest, taxation, depreciation and amortisation (EBITDA) 4

Signposting The Group now manages more than 100,000 units following the successful completion of the 2011 2015 Affordable Homes Programme. Analysis of our stock can be found on page 19. Sanctuary aims to develop 24,000 new homes over the next 10 years. For details see page 28. Revenue has increased during the year by 45.2 million to 669.0 million primarily in our Affordable housing division. This is a result of additional units in management, rent increases and higher sales values on shared ownership sales. For details see page 21. Operating efficiency advanced during the year, with the operating margin before pension exit costs increasing by 1.2% to 30.1%. EBITDA has increased for the fifth year in a row, this year by 24.7 million to 257.7 million. This is as a result of efficiency gains and higher margins on shared ownership sales. Our Fiveyear summary can be found on page 15. Current tenant arrears have fallen in the year from 3.15% to 2.79% as a result of continued investment in our income management processes. A summary of the impact and response to managing the Universal Credit rollout can be found on pages 21 and 22. Our credit and regulatory ratings remain unchanged as outlined below: 2016 2015 CASH FLOWS FROM OPERATING ACTIVITIES Credit ratings Standard and Poor s AA AA Moody s A1 A1 Regulatory ratings Homes and Communities Agency governance rating G1 G1 Homes and Communities Agency viability rating V1 V1 Strategic Report Governance Financial statements Other information Signposting 5

Group Chair s Statement Building homes The Government s postelection Budget, delivered in July 2015, has had a radical impact on the housing sector and the way registered providers operate. Many of the reforms to welfare were anticipated by the sector but the introduction of the New Living Wage and the reduction in social rents, following on so soon from the Government giving a 10year agreement for rents to rise, were not. As a dynamic organisation that constantly looks ahead and strives to deliver its services as efficiently as possible, Sanctuary is well placed to respond positively and quickly to the changing climate. Our revised business plan ensures we can continue to deliver our objectives, and more, in a different operating environment. Our ambitious business plan sets out how we will develop 24,000 new homes over the next 10 years a significant commitment. Sanctuary has a track record of delivering more new homes than others in the sector, having built over 2,000 across England and Scotland in 2014/2015. Our ambitious business plan sets out how we will develop 24,000 new homes over the next 10 years a significant commitment. The mixed tenure programme of affordable housing, market rent, Help to Buy and outright sale will meet the various needs and aspirations of a diverse population. 6

Sanctuary has a clear mission to add value and this is fundamental to how we operate. By focusing on customers we have established efficient national service centres for repairs and housing management; our reinvestment programme of 79 million keeps homes maintained to high standards; and investment in our people has trained over 750 apprentices. One of our key strengths is being financially robust and stable over the longterm. Through careful management over the last 30 years, Sanctuary is in a strong position with a healthy balance sheet. Strong governance is another important asset underpinning Sanctuary s stability and ability to react to a changing climate. In September 2015, I was delighted to welcome Denise Plumpton to the Group Board. Denise brings with her a wealth of knowledge around information technology and business transformation, and has vast experience in supporting companies to improve performance by focusing on enhancing customer service and process efficiency. During the year, the Homes and Communities Agency confirmed our governance and financial viability standards following its regulatory assessment of the Group in 2016. These may be uncertain times for the social housing sector but at Sanctuary we are confident in our planning for the future; ultimately it is through the hard work and commitment of staff and board members that Sanctuary fulfils its charitable objectives for the benefit of communities and will continue to do so. Jonathan Lander Group Chair As a dynamic organisation that constantly looks ahead and strives to deliver its services as efficiently as possible, Sanctuary is well placed to respond positively and quickly to the changing climate. Strategic Report Governance Financial statements Other information Group Chair s Statement 7

Group Chief Executive s Statement Changing landscapes We have made significant savings in back office functions through investment in a new SAP software solution which has enabled us to create a corporate shared service centre. This sectorleading initiative will provide a customerfocused, costeffective service. This past year has demonstrated that as an organisation we can continue to deliver high quality services whilst evolving our strategy to meet external challenges such as the July 2015 Budget. The impact of new Government policies is yet to be fully realised, however we have proactively analysed our operations and revised our business plan to ensure we remain a strong and growing organisation. The revised business plan priorities build both on our previous experience and on longerterm projects that were already underway. We have made significant savings in back office functions through investment in a new SAP software solution which has enabled us to create a corporate shared service centre. This sectorleading initiative will provide a customerfocused, costeffective service and is part of a wider efficiency programme. Our development goals will see the expansion of an inhouse construction team so we can directly control quality and build costs. 8

Sanctuary is now in a position where we can realise more benefits from our scale of operations and existing infrastructure, with a view to using gains to do even more. We have restructured our operations and have four divisions: affordable housing; care; development; and commercial, which includes student and market rent accommodation. This simplification of the operating structure enables management and staff to deliver value and focus on improving the specific services offered by each area of activity. The new structure, combined with our adoption of the International Financial Reporting Standards (EUIFRS), will increase the transparency of our performance. Despite external pressures on the sector this has been another year of success for Sanctuary. We topped the Inside Housing Development Survey with a record number of home completions in 2015. This was 50% more than the runnerup. In Scotland we won Large Affordable Housing Development of the Year in the Scottish Home Awards for phase 3A of Sanctuary Scotland s 50 million regeneration of Anderston in Glasgow. Another highlight of last year was in August when Sanctuary Care took over the management of five care homes in Westminster and welcomed over 200 staff to the Group. Sanctuary Care has also seen growth in its intermediate care portfolio and we now work in partnership with four trusts and Clinical Commissioning Groups across the country. This includes a twoyear contract with George Eliot Hospital NHS Trust to provide 16 intermediate care beds located within the hospital based in Nuneaton. We have proactively analysed our operations and revised our business plan to ensure we remain a strong and growing organisation. Sanctuary remains in a strong position but we recognise some in the sector will find the changing climate difficult. We have proven time and again our ability to help struggling organisations. The most recent acquisition of the former Cosmopolitan Housing Group in 2013 reaffirmed our ability to take on a financiallyfailing business and successfully integrate it, delivering greatly improved operational performance, services to tenants, and protecting the interests of major stakeholders including the Government and lenders. I am sure there will be businesses looking for opportunities to become more financially and operationally efficient, and Sanctuary will be looking to work with other organisations to deliver better value. Thanks to the dedication of our staff, we are in a strong position to deliver on our commitments and provide value to all our stakeholders as the leading social enterprise. David Bennett Group Chief Executive Strategic Report Governance Financial statements Other information Group Chief Executive s Statement 9

Our business at a glance One of the UK s leading providers of housing, care and commercial services, Sanctuary Group employs over 11,000 people and manages more than 100,000 units of accommodation throughout England and Scotland. Our property portfolio includes general rented, retirement living, supported housing, extra care, student and key worker accommodation and care homes. Sanctuary also provides a range of other services including maintenance, home care and telecare. As a nonprofit distributing organisation, we reinvest our surplus income into our services and business growth rather than distribute it to shareholders. This enables Sanctuary to maintain high standards, develop our services and invest in people and communities. Each of our business streams objectives are aligned in terms of delivering value at every level of our Group, with customers at the heart of everything we do. Our values : Our pledges : Provide cost effective services Develop 24,000 new homes over the next 10 years Maintain high quality standards Service We endeavour to improve our service whilst lowering the cost to our customers Economic We will protect public money and assets and work to improve economy and alleviate poverty Social and environmental We will work tirelessly to improve the standard of our communities and our customers' quality of life Development Care Affordable housing Commercial Group Shared Services 10

Service value Our intention is to deliver higher quality services by efficient and effective use of resources and lower cost. Develop improved and more efficient ways of working. Invest in technology that supports business transformation. Our mission: To remain a market leader in the provision of high quality housing, nursing and residential care, and community services. Through careful stewardship of resources, we will maximise the benefits of our ethicallybased operations providing good quality and value to our customers and stakeholders. Adding value in terms of: Economic value To ensure public money and the Group s assets are protected for the public good and that the Group continues to contribute meaningfully to the economy and the alleviation of poverty. We aim to deliver value to stakeholders in these ways: Build homes for people to own and for those in need. Uphold uncompromisingly high standards of governance and risk management. Social and environmental value We aim to both improve the quality of life of people living in our communities and play an active role as a responsible corporate citizen. Listen to our customers and invest in our communities. Support struggling businesses and assets. Strategic Report Governance Financial statements Other information Our mission 11

Business Strategy 2015 2018 On 8 July 2015 the Chancellor, George Osborne, delivered the Government s postelection Budget. While many of the reforms to welfare were anticipated, the increase in the national minimum wage and the reduction in regulated social rent were not. Both of these have had a dramatic effect on the housing sector. As a consequence, the Group has recast its business plan to take account of the altered landscape and make sure we remain financially strong and continue to deliver our objectives. Our existing programme of efficiency and service improvement means that we are well placed to respond to the demands of the new environment. Our significant investment in an information systems infrastructure provides a platform that will enable us to realise efficiencies and support new operating models to increase customer satisfaction and reduce costs. In addition, we had already taken the view that, as an ethical employer, we should embrace the living wage and had in place a strategy to support the costs associated with this. Our prudent planning has enabled us to quickly recalibrate our business plan and project a clear path ahead. This plan builds on our financial strengths, maintaining margins and protecting frontline services. Our prioritised targets to sustain a successful organisation include: providing costeffective services striving to be market leading in the provision of efficient services with reduced management costs while maintaining or improving customer satisfaction levels. new homes developing 24,000 homes over the next 10 years. Some of these will be for sale and others, by working closely with local authorities, will meet the need for additional affordable rented homes. achieving high quality standards ensuring operations across the Group s diverse range of activities meet high service standard expectations of customers and regulators. Our wellearned reputation as a financially robust organisation is as a consequence of our careful financial management. Public investment has been protected and we have been able to create sufficient capacity to subsidise the delivery of social housing, homes for those aspiring to own and invest in our communities. This plan will reinforce that reputation by: maintaining and improving key performance indicators and ratios; proactively managing a range of risks from Welfare Reform through to pension liabilities; creating additional capacity from within the organisation; and ensuring access to competitively priced credit. The full Group Business Plan can be found on the Group website at www.sanctuarygroup.co.uk/publications 12

Our development activities and how we fund building new homes Affordable housing operations Care operations Commercial operations Development including property sales Government assistance Debt funding Our development strategy Sanctuary Group is managing some of the largest construction and regeneration programmes in the UK. We were the largest social housing developer in the 2011 2015 Affordable Homes Programme, developing 1,025 homes during the current year. We are now aiming to build 24,000 units over the next 10 years. In addition to this, our regeneration programme includes the delivery of 400 new homes in both Glasgow and Cumbernauld. Innovation used within development includes delivering our first modular build scheme in Barnet, utilising pod technology in some of our extra care schemes and using our inhouse construction teams in Chester. Home ownership is at its lowest level in modern history and Sanctuary is committed to helping tenants to fulfil their ambitions of owning their own home. Sanctuary s 10year plan is to build 12,000 low cost home ownership properties which will enable 2,000 people to buy their existing home, as well as developing 3,600 homes for outright sale. Separately, over the next 10 years, Sanctuary will continue to provide new rented homes including an estimated 2,000 to replace properties sold under the Right to Buy, 2,950 for market rent and 3,450 for affordable rent. Our core operational activities Grant funding for social and shared ownership properties Borrowing through external funding and the bond market Funding our development strategy In order to achieve our objective to build 24,000 units over the next 10 years, the Group will use the following resources: Our core operations generate surpluses, which are used to fund ongoing development and reinvestment into our properties, to provide the best possible standards for our tenants and residents. Property sales, by selling homes either fully or through shared ownership, generate profit which will be reinvested in more development. We will continue to utilise Government grants through the 2015 2018 Affordable Homes Programme, where they are available for us to build affordable housing and shared ownership properties. Debt funding available to the Group due to our strong financial position. Our credit ratings of A1 from Moody s and AA from Standard and Poor s, together with G1 and V1 governance and viability ratings from the Homes and Communities Agency (HCA), allow us to access funding at competitive rates of interest. Sanctuary already has in place funding and facilities to fund development for the next three years. Strategic Report Governance Financial statements Other information Our development activities and how we fund building new homes 13

The operating structure of our business The Group operates four divisions, each being supported by Group Shared Services (including Human Resources, Finance and Information Systems): Affordable housing; Care; Commercial; and Development including property sales. Affordable housing Our housing division provides a range of high quality affordable homes and support services across England and Scotland, reflecting the needs and aspirations of our customers and delivering services at a competitive cost. The portfolio of properties managed in the affordable housing division is wide ranging from general needs housing, supported housing, shared ownership and housing for older people including extra care schemes. The inhouse repairs and maintenance operation provides services across our portfolio of properties. Affordable housing sits at the core of Sanctuary Group, fulfilling our social responsibility whilst ensuring we are safeguarding public assets. Care Sanctuary Care is a leading provider of care homes for older people. Our welltrained and experienced staff are committed to keeping kindness at the heart of our care supporting residents to lead happy, contented lives full of wonderful experiences and memories. With 68 warm and welcoming homes across England, staff provide a range of personalised long and shortterm care including residential, dementia, nursing, intermediate and palliative care. Commercial Our commercial division provides a range of services including: working with universities and NHS trusts to provide accommodation and facilities management services for students and key workers; managing a portfolio of directlet student accommodation; managing a portfolio of market rent and commercial properties; providing domiciliary care services to help people remain independent in their own home; and offering telecare support packages for older and vulnerable people. The profit created within our commercial operation is not only reinvested into the services and properties we provide, but also used to support our wider charitable objectives and development programmes. Development including property sales The Group is building more homes than ever before. Our ambitious 10year development programme aims to deliver 24,000 new homes, including using our own inhouse construction team. This will include a range of tenures to support more people into home ownership, as well as helping to meet the need for additional rented homes. Our development operations are also responsible for property sales. 14

Fiveyear summary IFRS IFRS UK GAAP UK GAAP UK GAAP 2016 2015 2014 2013 2012 m m m m m Statement of Comprehensive Income Revenue 669.0 623.8 592.3 Cost of sales and operating expenditure (485.5) (450.3) (443.1) Other gains and losses 17.7 6.8 Operating surplus before pension exit costs 201.2 180.3 149.2 Pension exit costs (8.2) Operating surplus after pension exit costs 193.0 180.3 149.2 Net gain on business combinations 0.5 Surplus on sale of fixed assets 3.2 Net interest payable in respect of loan instruments (137.8) (128.6) (117.6) Other finance (costs)/income (2.4) (3.4) 7.5 Surplus for the year before tax 52.8 48.8 42.3 Surplus for the year before tax and net gains on business combinations Statement of Financial Position Properties at cost less depreciation (PPE and investment property) Social Housing and other grant 4,923.4 (1,766.6) 3,156.8 4,871.0 (1,746.5) 3,124.5 4,582.7 (1,689.7) 2,893.0 Other PPE, investments, intangibles and financial instruments Noncurrent trade and other receivables Current assets Current liabilities 202.0 75.8 434.0 (271.4) 3,597.2 196.4 72.3 260.0 (271.1) 3,382.1 156.4 303.5 (198.8) 3,154.1 Loans and borrowings and other payables Provisions, pensions and derivatives Reserves 2,647.0 80.0 870.2 3,597.2 2,482.8 96.9 802.4 3,382.1 2,326.1 69.4 758.6 3,154.1 Statement of Cash Flows Operating activities Financing and returns on investments Capital expenditure Capital grants and sales proceeds Cash and debt on acquisitions Noncash and fair value movements 207.4 (133.4) (213.3) 131.2 (4.5) (12.6) 248.8 (133.0) (422.4) 94.5 40.5 (171.6) 205.0 (122.5) (341.4) 98.5 (13.0) (15.4) (188.8) Net debt at start of year Net debt at end of year 52.8 (2,334.7) (2,347.3) 48.3 42.3 (2,163.1) (1,974.3) (2,334.7) (2,163.1) Units 100,160 98,900 97,984 Ratios/KPIs Operating margin pre pension exit costs (%) 1 Net margin (%) 2 Interest cover 3 EBITDA 4 EBITDA margin (%) 5 Cost of borrowing (%) 6 Liquidity 7 Gearing (%) 8 30.1 7.9 1.87 257.7 38.5 4.93 2.66 47.7 28.9 7.7 1.81 233.0 37.4 5.15 1.92 47.9 25.2 7.1 1.80 209.5 35.4 5.71 3.01 47.2 474.0 (353.3) 120.7 120.7 25.8 0.6 (93.3) 0.8 54.6 28.8 4,303.1 (1,633.4) 2,669.7 141.0 287.0 (182.7) 2,915.0 2,122.5 79.8 712.7 2,915.0 182.0 (90.3) (270.1) 87.1 (448.3) (3.7) (543.3) (1,431.0) (1,974.3) 95,156 25.5 6.1 1.77 190.8 40.3 5.84 3.00 45.9 431.5 (327.1) 104.4 104.4 3.0 (85.9) 2.2 23.7 23.7 3,482.1 (1,431.9) 2,050.2 123.9 145.3 (144.0) 2,175.4 1,460.6 46.0 668.8 2,175.4 149.2 (86.6) (213.7) 61.7 5.4 (84.0) (1,347.0) (1,431.0) 78,215 24.2 5.5 1.78 152.3 35.3 5.91 1.95 41.1 Strategic Report report Governance Financial statements Other information For details of calculation methodology and changes to accounting framework, see Appendix 3. Fiveyear summary 15

Chief Financial Officer s Review Introduction Due to the changes in UK Generally Accepted Accounting Practice, Sanctuary had the option to adopt several different accounting frameworks. The decision was made by our Group Board to adopt EUIFRS, which enables the Group to most appropriately present its performance. This approach has been agreed with the Group s external auditors, KPMG LLP (KPMG). Sanctuary has performed strongly again this year, with our surplus for the year from continuing operations increasing by 8.7% from the prior year. This positions the Group well for the challenges the sector faces, particularly over the next four years. Our revised strategy of developing 24,000 units in the next 10 years presents different challenges to those we have faced previously. However, with the capacity the Group already has available, together with a strong underlying operational business, Sanctuary has the resources required to succeed. Operational growth and efficiency Group revenue has increased by 7.2% to 669.0 million, of which 640.8 million was attributable to operations and 28.2 million was attributable to shared ownership sales. Growth in our operations is attributable to a combination of new units in management, rent increases and increasing numbers of selffunders within Sanctuary Care. Operating surplus before pension exit costs has increased by 11.6% to 201.2 million (7.0% to 193.0 million after pension exit costs), as a result of efficiency savings and the sale of one of the student operations during the year. Operating margin before pension exit costs has increased to 30.1%. EBITDA has increased by 24.7 million to 257.7 million. Investment in our assets Growth in housing properties includes: construction costs of 106.1 million; reinvestment spend on components of 79.3 million; less depreciation of 28.8 million. Grant funding of 26.2 million has been received in the year for development units. Cash collection and generation The cash position of the Group is strong, with sufficient cash in hand and facilities to fund operations and capital expenditure throughout the year and beyond 2017. The Group generated 207.4 million of cash from operating activities, a decrease of 41.4 million on the prior year. The decrease is a shortterm fluctuation due to improvement in efficient payment of creditors. However, at 31 March 2016, the Group had a cash balance of 344.7 million and had 139.6 million of undrawn facilities available. Rent arrears have fallen from 3.15% to 2.79% during the year. This is a result of efficient arrears cash collection due to increased investment in our income management processes. 16

Capital finance and treasury At 31 March 2016 the Group had total borrowings of 2,706.5 million, analysed as follows: CASH FLOWS FROM OPERATING ACTIVITIES Bank loans and mortgages 1,279.7 1,093.3 Senior secured notes and debenture stock 1,276.4 1,272.8 Finance leases 150.4 150.6 Other 2,706.5 2,516.7 Debt repayment profile and cost of capital Net interest payable in respect of loan instruments increased by 9.2 million to 137.8 million, as a result of both new development and investment in existing properties. Overall, the Group cost of borrowing for the year has reduced to 4.93% compared to 5.15% in 2015, whilst interest cover has increased from 1.81 in the prior year to 1.87. There has been an improvement in the derivative value of 1.0 million. The weighted average duration of drawn debt across the Group is 20.6 years. Our funding strategy is designed to ensure refinancing requirements are manageable and planned. The Group has a refinancing risk of 11.34% of existing drawn loans in the next five years. The Group is confident it can both refinance existing loans and finance the current business plan commitments. The Group anticipates funding this through a mix of fixed and variable interest rate facilities, cash generated from operating activities and Government grant. 500,000 400,000 300,000 200,000 100,000 Debt maturity profile m 2017 2021 2022 2026 2027 2031 2032 2036 2037 2041 2042 2046 2047 2051 Bank finance Working capital and liquidity management Bond finance The Group s treasury function manages liquidity by preparing cash forecasts on daily, weekly, monthly and longerterm bases to ensure that short and longerterm requirements are known. The forecasts are cautious and are constantly updated, including sensitivity analysis. Draw downs are managed to ensure funding is available as required whilst debt finance costs are minimised. 2016 m 2015 m Strategic Report report Governance Financial statements Other information Chief Financial Officer s Review 17

Interest rates The Group operates an interest rate policy designed to minimise interest cost and reduce volatility in cash flow and debt service costs. Our borrowings at the year end comprise 93.5% fixed rate debt (2015: 96.0%) and 6.5% floating rate debt (2015: 4.0%). Within the loan portfolio are two interest rate swap arrangements, which swap a variable interest rate to a fixed rate. At the reporting date, the derivative financial instruments recognised for these arrangements amounted to a 4.5 million liability. There is no requirement to collateralise these derivatives. Foreign currency management The Group has borrowings in US dollars totalling $100 million at the year end and has utilised derivative financial instruments to hedge against currency rate volatility. Covenant compliance The Group monitors all covenants on a continual basis and these are reported to Group Board. Key covenants are interest cover, gearing ratios and asset cover. All covenants on existing Group finance arrangements have been met during the financial year and postyear end. Managing the Group s pensions We are taking measures to reduce the level of risk and volatility within our defined benefit pension schemes. The Group has completed negotiations with The Pensions Trust, the pension scheme administrator for our nonlocal Government pension schemes, regarding our exit from the Social Housing Pension Scheme. This move, combined with our proposals to close a number of our defined benefit salary schemes, has reduced the risk of growing pension deficits and reduced the Group s overall pension risk. Building homes and partnerships The Group plans to deliver 24,000 new homes over the next 10 years. To accomplish this, we have to consider new ways of working with developers. To this end, within the year the Group entered into a joint venture with Galliford Try Plc, one of the UK s largest developers. Sale of student property Within the year, the Group sold one of its student properties and associated operating activity in Birmingham, generating a substantial surplus of 14.0 million. Subsequent to the sale of the property, the Group continues to manage the property until later this year. Divisional EBITDA For the business review on pages 20 to 29, Divisional EBITDA is defined as segment surplus with office and equipment depreciation and software amortisation costs removed. Other gains and losses have not been attributed across divisions. 18

Accommodation in management The Group has a range of property types and tenancies across the UK: general rented homes for people who need affordable accommodation; lowcost home ownership schemes for people making their first move into owner occupation; sheltered housing for rent and for purchase; care homes for people who need nursing support; as well as student and key worker accommodation. Group Association 2016 2015 2016 2015 Social housing accommodation: General needs housing 52,593 53,101 43,150 39,542 General needs housing affordable rent 5,081 4,109 2,940 1,868 Supported housing accommodation 3,999 4,097 3,663 3,683 Supported housing affordable rent 122 1 Housing for older people 10,881 10,995 9,870 8,212 Housing for older people affordable rent 460 149 77 Key worker (social lets) 509 567 509 567 Shared ownership 3,601 3,354 2,614 2,549 Home ownership 6,373 6,298 4,342 4,001 Social housing leased outside Group tenancy agreement 107 107 86 74 83,726 82,777 67,252 60,496 Nonsocial housing accommodation: Student and key worker (nonsocial lets) 11,943 12,018 7,243 7,319 Registered care homes (including children s homes) 3,858 3,510 3,336 3,034 Commercial 181 130 139 97 Market rented accommodation 96 102 86 91 Other nonsocial rental accommodation 356 363 7 16,434 16,123 10,804 10,548 Total units in management 100,160 98,900 78,056 71,044 At 31 March 2016, the Group had 632 (2015: 1,925) development units onsite. 1,630 owned units are managed by third parties (2015: 1,374). Strategic Report report Governance Financial statements Other information Accommodation in management 19

20 BUSINESS REVIEW Affordable housing divisional review

Business Review Affordable housing divisional review Revenue ( m) 2016 445.5 2015 422.8 Divisional EBITDA ( m) 213.0 194.5 Divisional EBITDA margin (%) 47.8 46.0 Capital investment ( m) 48.7 28.7 Units in management at year end 83,544 82,588 Management cost per unit ( ) 621 624 Performance Revenue continues to grow in the affordable housing division, as a result of additional properties in management that were built as part of the 2011 2015 and 2015 2018 Affordable Homes Programmes combined with annual rent increases. EBITDA has also increased due to the expansion of responsibilities of our national Customer Service Centre in Adderbury, which has improved the efficiency of our services. As a result, our average cost of managing a property has fallen to 621 from 624 in 2015. Current tenant rent arrears in housing has fallen from 3.26% to 2.75% despite the impact of Universal Credit and Welfare Reform. The new benefit cap is due for further expansion during 2016 and our Income Management team has been restructured in preparation for the potential increase in tenants requiring support in managing their rent payments. Sanctuary Supported Living has been reviewing the way it works and is in the process of completing a programme to reduce its cost base and improve EBITDA. The operation has been focusing on contract profitability, retention of business and reviewing its operating model in preparation for future challenges such as the new National Living Wage and further reduction in revenue grants. Units in management at year end 83,544 Customer satisfaction 90% During the year Sanctuary Maintenance has been focused on efficiency, reducing the average repairs cost per property whilst continuing to deliver a highly valued service. Average cost per property has fallen by 11% from 364 to 324 in the year. This is a result of closer controlling of the cost per job, effective scheduling, delivering more jobs inhouse and increased productivity. As an operation we now complete four in five responsive repairs inhouse (76% in 2015), which provides better value for money and a better service to our customers. Customer satisfaction for works carried out by internal teams averages 90%, compared to contractor satisfaction of 81%. In April 2016, Sanctuary Maintenance launched internal delivery of repairs in Scotland for the first time. In addition, our team expanded its gas servicing and repairs with the addition of 6,000 properties in East Anglia in July 2015. Our internal teams are now delivering 60% of gas servicing and repairs for the Group. Strategic Report report Governance Financial statements Other information Affordable housing divisional review 21

Tenant rent arrears * 2016 2.75% 2015 3.26% Future targets and objectives As a result of the Welfare Reform and Work Act, rental income for our housing operation is being reduced by 1% from 1 April 2016 and by a further 1% each year for four years. Efficiencies in back office services have been identified to mitigate the impact of the rent reduction. There will be a continuing focus on cost management and delivering economies of scale as a result of the implementation of a new Housing Services model, which will further standardise processes and improve customer service. A further release of OneSanctuary, the Group s new SAP software solution, in 2016/2017 will enable greater efficiency in rental collection and rent arrears handling, as well as improving the experience of our tenants. * Tenant rent arrears for the affordable housing division only. 22

Management cost per unit 2016 621 2015 624 Funding for supported living is changing as a result of the Care Act 2014 and Better Care Fund, which have removed ring fenced funding from local authorities and introduced personal budgets. The Group s aim is to continue to identify and mitigate these challenges over the next year by focusing on implementing more targeted and efficient processes and rolling out a new Standard Operating Model in 2016/2017, which will enable it to respond more effectively to the changing environment. Our housing team continues to work with tenants to ensure we respond to concerns arising from Welfare Reform. A dedicated support function will be provided to tenants to offer additional guidance and advice during these challenging times. Sanctuary Maintenance will continue the rollout of internal delivery of gas servicing and repairs for Scotland and, from the beginning of April, will offer an internal maintenance service for the Student business. Additional investment in mobile technology will enable further efficiencies in terms of work planning and scheduling and reduce the overall travel time of our operatives. Strategic Report report Governance Financial statements Other information Affordable housing divisional review 23

24 BUSINESS REVIEW Care divisional review

Business Review Care divisional review Care existing business Revenue ( m) 2016 99.8 2015 94.2 Divisional EBITDA ( m) 17.0 15.7 Divisional EBITDA margin (%) 17.0 16.7 Care new openings Number of new homes in management 8 Revenue ( m) 8.9 3.8 Divisional EBITDA ( m) 0.5 Divisional EBITDA margin (%) 13.2 Capital investment ( m) 21.0 25.1 Number of bed spaces in management 3,549 3,204 Performance Sanctuary Care continues to deliver a strong performance. Average weekly fee rates have increased from 618 to 661 due to selffunder growth and the addition of new homes which command premium rates. Occupancy has decreased to 94% from 96% due to the phasing of admissions in newly opened homes, but compares favourably to a sector that averages 89%. Resident satisfaction also remains high at 96%. The EBITDA margin of our existing business has also remained stable at over 15%, due to a focus on controlling agency costs and recruiting, training and retaining our own staff. We are also pleased to welcome eight additional care homes to the Group. We have constructed three brand new homes in Chester, Canterbury and Worcester, providing a total of 194 bed spaces. In addition, during the year, Sanctuary Care took on provision of care services to Westminster Council under an eightyear contract. This contract will generate an additional annual operating contribution of 1.2 million from six homes with a total of 235 bed spaces. Sanctuary Care is currently operating five of the six homes and will begin operating the remaining care home during the next financial year. Number of bed spaces in management 2016 3,549 2015 3,204 Resident satisfaction 2016 96% 2015 96% Future targets and objectives During the year, Sanctuary Care developed a commissioning strategy for intermediate care contracts. We now have the operational structure, expertise and skills to manage intermediate care beds and are actively pursuing opportunities to develop this offering as well as focusing on establishing recently commissioned units. Intermediate Care offers an attractive alternative to hospital care for elderly patients and encourages reablement in a residential care setting. Sanctuary Care has continued to develop its working practices and governance to ensure homes meet the new Care Quality Commission (CQC) standards which came into force in April 2015. Internal quality assurance monitoring has been adapted so it accurately reflects the new style CQC inspection and we are committed to working with the CQC to maintain the delivery of high quality care. Sanctuary Care s CQC compliance rating is 80% from 44 CQC inspections, under CQC s new inspection regime. This is 20 percentage points above the average CQC compliance level of 60% for the sector. Sanctuary Care continues its focus on being the employer of choice in terms of recruitment and staff retention. Minimising the use of agency staffing will continue to be a priority in the next year, along with developing career pathways and embedding the Social Care Commitment, which aims to improve public confidence in the care sector and positively impact the quality of care delivered. The impact of the new National Living Wage has been factored into the business fiveyear planning and a revenue strategy has been implemented to minimise the impact on financial performance. Strategic Report report Governance Financial statements Other information Care divisional review 25

26 BUSINESS REVIEW Commercial divisional review

Business Review Commercial divisional review Student and commercial housing 2015 Units in management at year end 13,067 13,108 Revenue ( m) 2016 63.7 64.3 Divisional EBITDA ( m) 31.3 30.9 Divisional EBITDA (%) 49.1 48.1 Capital investment ( m) 9.6 10.5 Home Care and Sanctuary365 Revenue ( m) 19.5 16.0 Divisional EBITDA ( m) * (3.9) (0.4) Divisional EBITDA (%) (20.0) (2.5) * After provision for loss making contracts Performance We provide accommodation for over 12,000 students across England and Scotland through directlet and nomination agreements with our university partners. Our student properties portfolio continues to perform well. For the 2015/2016 academic year, 96.4% occupancy levels were achieved across our portfolio. This was as a result of introducing book your place for a pound promotions for students, moving away from the administrative burden of managing deposits. We also secured additional room bookings in our North West portfolio from our existing university partners. EBITDA margins continue to improve driven mainly by careful cost control, increased occupancy and fee rates on schemes in the North West. Our Home Care operation experienced a challenging year due to factors such as the introduction of travel payments and low fee rates, coupled with recruitment issues leading to high agency expenditure. Three contracts within the Home Care business caused a large proportion of the reduction in the Home Care result, two of which we have now ended. Sanctuary365 continues to build on its high standards of service and offers a wide range of assistive technology alongside the telecare service. The 24 hours a day, every day of the year service provides support packages for older and vulnerable people to help customers maintain their independence and plays a vital role in the lives of customers living with illnesses such as dementia or those at risk of falling. Student average occupancy 2016 96.4% 2015 95% Telecare connections 2016 23,668 2015 19,070 During the past 12 months, 98.5% of the calls received were answered within 60 seconds or less. Total telecare connections for the year were 23,668. The service has achieved Telecare Services Provider (TSA) platinum status for the sixth year and was rated as exceptional in its latest audit by the Telecare Services Association. Future targets and objectives Sanctuary Students will further enhance the student experience by upgrading the current student website. The student business will also benefit from operational efficiencies by using the Group s maintenance operation to deliver its gas and reactive maintenance services. We will continue to reinvest in our student properties as part of a planned programme of capital improvements. Sanctuary Home Care has extended its strategic review of domiciliary care contracts to ensure they are viable and that quality service provision can be offered at affordable rates. This is complemented by a recruitment strategy to recruit and retain quality staff to ensure that service provision levels can be sustained as well as reduce use of agency staff. During 2016, our first fully private extra care scheme will open in Cheltenham. Sanctuary365 will continue to focus on delivering quality services to its customers by offering tailored support such as a falls package, which will include additional assistive equipment, as well as continuing our partnerships with local authorities. Strategic Report report Governance Financial statements Other information Commercial divisional review 27

28 BUSINESS REVIEW Development divisional review

Business Review Development divisional review Revenue ( m) 2016 28.4 2015 21.5 Operating costs ( m) (11.2) (7.5) First tranche sales surplus ( m) 8.5 6.5 Divisional EBITDA ( m) (2.5) (1.0) Divisional EBITDA (%) (8.8) (4.7) Units completed during the year 1,608 2,197 Units under construction 632 1,925 Projected development units 24,000 4,057 Performance The Group has overseen the completion of the 2011 2015 development programme, the commencement of the 2015 2018 Affordable Homes Programme in England and the continuing progress of the Scottish Affordable Housing Programme. We have completed 1,608 units during the year, including three care homes adding 194 bed spaces to the Sanctuary Care portfolio. Shared ownership sales have produced revenue of 28.2 million and a gross margin of 8.5 million. The Group achieved a lower net cost of development than planned in the completion of the 2011 2015 programme. Units developed during the year 2016 1,608 2015 2,197 Units under construction 2016 632 2015 1,925 Future targets and objectives In the next 12 months the Group is expecting to start onsite with 1,000 new homes, which is the first step in our plan to deliver 3,000 new homes a year by 2020/2021. To complement this, we are also expanding our construction function to enable us to fully manage and control the delivery of new homes. The Homes and Communities Agency has announced a new Affordable Homes Programme covering the period from April 2016 to March 2021. The Group will be making a substantial bid for grant funding to build affordable homes for sale. Our development programme is now focused on enabling people to meet their aspiration of owning their homes, therefore we will primarily deliver a mixture of affordable and outright sale products. Our expanded construction function will give Sanctuary the flexibility to deliver new developments allowing build programmes to change in conjunction with market conditions, whilst enabling more costeffective construction through the removal of external management costs and profit. Development will work with local communities and provide indepth market analysis to identify customer needs, and ensure new projects meet both the local needs and provide the strong financial returns required. Strategic Report report Governance Financial statements Other information Development divisional review 29

Value for Money strategy The Group Board has responsibility for setting Value for Money objectives and for monitoring progress. The diagram below illustrates how. Communication of values and culture Group Board Balanced scorecard and progress reports presented Objectives set in three year business plan Threeyear business plan delivered Business Executive Committee Daytoday management Value for Money monitored and reported via champions Managing Directors and Heads of Service Operational plans and budgets set KPIs and management accounts reported and monitored against operational plans and budgets At Sanctuary, we work to the principles of the three Es Economy, Efficiency and Effectiveness whilst focusing on our three values: Service; Economic; and Social and environmental. We believe that to achieve and provide Value for Money we must balance these principles and values in achieving our objectives. We set our Value for Money objectives based on a standard framework, the three Es: Economy achieving the best value from our inputs, that is, where items were purchased did we get them for the best possible value? Efficiency maximising the outputs for a given level of inputs, that is, how good are we at creating the output? Effectiveness ensuring the outputs deliver the desired outcome, that is, was what we delivered at the correct standard and did it achieve the desired outcome? We measure our effectiveness by our three values: Service to deliver high quality services at low cost. Economic to ensure public money and assets are protected for the public good and that the Group continues to contribute meaningfully to the economy and alleviation of poverty. Social and environmental to improve the quality of life for the people living in our communities and play an active role as a responsible corporate citizen. 30

Value for Money summary Service value 81% of complaints resolved at first point of contact Procurement savings of 1.8m 79% CQC compliance V1/G1 rating from HCA 90% satisfied with repairs Internal maintenance service coverage of 79% Economy Effectiveness Economic value 79m reinvested into our properties 6,000 1,414 housing units completed residents helped to manage their money Housing Transformation Programme achieving savings of 2.7m per year Reduced reliance on agency staff by 3,119 hours per week Social and environmental value 85,395 people benefiting from our community projects 1, 578 Efficiency 1.55m invested in communities people supported through projects promoting access to employment 206 apprenticeships in the year Staffing efficiencies in corporate services saving 3.3m per year Introduction of the corporate shared service centre David Bennett Group Chief Executive Strategic Report report Governance Financial statements Other information Our full Value for Money document is included within our Value Report, which can be found at: www.sanctuarygroup.co.uk/deliveringvalue. Value for Money summary 31

Community investment Adding value for communities Each year Sanctuary invests in programmes and projects across the country, which support the needs and aspirations of our customers. The support we give aims to reflect the diverse and unique nature of different neighbourhoods and covers: Employment, education, skills and training Health and wellbeing Community safety and infrastructure Environment Financial inclusion This year Sanctuary invested 1.55 million in 606 community investment initiatives, benefiting 85,395 people and 312 community groups. Our investment includes funding, staff time, gifts in kind and management costs. For every 1 we invested, 1.20 of external funding was attracted, helping to make our money stretch even further and ensuring initiatives are sustainable. Access to employment This year we supported 1,578 people through projects which help tackle worklessness and promote access to employment. This is a significant focal point for our programme and the impacts on the people who participated include: 455 with increased employability; 516 gained work experience; and 135 people gained employment. Green Skills Employability, Ely Two people are now in fulltime employment after attending an environmental and minor construction project with Hertfordshire Groundwork Trust in Ely, Cambridgeshire. A group of unemployed people undertook gardening, building and painting at Sanctuary s Fairfax Court retirement living scheme. They also attended workshops to learn CV writing skills and interview techniques, helping to support them into work. 32

Participating in healthy activities 11,442 With increased sense of belonging to their neighbourhood 1,333 Making an impact We evaluate all our investments to track the impact that they achieve. Further impacts from this year include: 3,693 people developing a new skill One young person taking part in street football sessions initially took quite a while to engage. As he got to know and trust the sport leaders, he opened up and the organisation could help him more broadly. By the end of the programme he had developed confidence in his own abilities and was managing his emotions positively. He has now taken the next step to assist some of the younger players in another project. I just want to say a huge thank you to a company that has made me look forward to Thursdays and help me discover role models to look up to for the future. 11,442 people participating in healthy activities 838 individuals supported through projects which aim to reduce isolation 84 community groups supported to increase capacity 1,333 people with increased sense of belonging to their neighbourhood 1,099 individuals participating in positive active citizenship 744 people supported to access technology 574 individuals actively engaged in improving spaces or places 317 people with increased confidence to manage their money. Love Sport Through our Love Sport national initiative with Sport England, we are working to transform lives and build passion in our communities for sport and fitness. Love Sport is well on the way to achieving our goal of reaching over 2,250 people, through many exciting sporting activities including tai chi, football, street dance, zumba, taekwondo and boxercise. Last year I had five stents put in my heart after a heart attack and I was advised to do some light exercise like tai chi to help with that. I feel a lot more relaxed and I worry less about little things. I also have a lot more energy. I m not in as much pain after the Chi Gong sessions. My knee and hip feel easier and I am more agile and mobile now. Stan We publish a separate annual Value Report which provides more details on how we create value through all our operations. This can be found on our website at https://www.sanctuarygroup.co.uk/deliveringvalue. Strategic Report report Governance Financial statements Other information Community investment 33

Governance Board structure Under the Group Board s leadership, Sanctuary Group has put in place a comprehensive management structure, which is summarised in the diagram below. Group Board Jonathan Lander (Chair) Group Audit and Risk Committee Elwyn Roberts (Chair) Group Housing Committee Liz Meek (Chair) Nominations Committee Jonathan Lander (Chair) Remuneration Committee Robert McComb (Chair) Succession Planning Committee Jonathan Lander (Chair) Executive Committee David Bennett (Chair) Divisions Affordable housing reporting into Ian McDermott (Chief Operating Officer) Care reporting into Mark McCarthy (Managing Director Sanctuary Care) Commercial reporting into Nathan Warren (Group Director Commercial) Development reporting into Peter Martin (Group Director Development) Support functions reporting into David Bennett (Group Chief Executive) and Craig Moule (Chief Financial Officer) Group Governance and Legal Services Group Financial Services, Group Treasury, and Information Systems Corporate Services Asset Management Group Facilities 34 Annual Report and Financial Statements 2015/2016

Group Board Sanctuary has a group structure, in which Sanctuary Housing Association (the Association) is the parent company. The Association was established on 5 May 1969 and is a Registered Society and an exempt Charity under the Charities Act 2011. The Group is governed through the Board of the Association (the Board) which comprises up to seven nonexecutive members, the Group Chief Executive, and up to three coopted members. As per Provision B2 of the National Housing Federation Governance Code, all Board members have the same legal status. The role of the Group Board The Board s primary role is to define strategy and ensure compliance with the Group s values and objectives. It agrees the strategic direction of the organisation and makes sure that policies and plans are in place to achieve those objectives. It also establishes and oversees a framework of delegation and systems of control, ensuring that good governance practices are embedded across all of the Group s operations. Jonathan Lander BSc Hons, FCA Group Chair, Chair of Nominations Committee and Chair of Succession Planning Committee Jonathan Lander retired as a senior partner at PricewaterhouseCoopers LLP (PwC) in 2008, having been with the organisation for over 30 years. At PwC Jonathan was lead assurance engagement partner to public companies, large private and private equity backed companies and businesses with overseas ownership, as well as being a Midlands Leadership team member responsible for strategy, marketing, communications and business development. Jonathan was elected onto the Group Board in September 2010 and elected Group Chair in September 2014. David Bennett CBE, FCA, CCMI Group Chief Executive David Bennett is a chartered accountant and has extensive experience in the housing association sector. He has been the Group Chief Executive of Sanctuary since 1992. Prior to that he was the Deputy Chief Executive at Sanctuary, and was Chief Executive at New Spiral Housing Association. Before joining Spiral he held senior positions with the Peabody Trust, the Samuel Lewis Trust and in the private sector. Strategic Report report Governance Financial statements Other information Group Board 35

Robert McComb MSc Group Vice Chair and Chair of Remuneration Committee Robert McComb is a retired investment banker with experience in treasury, structured and asset finance, and debt capital markets. Prior to retiring from Dresdner Kleinwort in 2007, Robert was treasurer of the bank s $36bn structured credit fund, issuing bonds to investors worldwide. He was a senior member of the bank s structured finance group, with specific responsibility for structured finance in France. Since retiring, Robert has been a nonexecutive chair of a venture capital funded hospitality business and a board member of a small north London housing association. He continues to take a close interest in the financial markets. Liz Meek CBE, BA Hons Chair of Group Housing Committee Liz Meek is currently Chair of a London thinktank the Centre for London. She is also involved with work to improve services for people with schizophrenia and for exoffenders. Until 31 March 2011, Liz was Regional Director at the Government office for the North West based in Manchester and Liverpool with responsibility for delivering projects and programmes for 11 Whitehall departments. Her long civil service career has involved specialisation in urban regeneration, combating social exclusion and worklessness, as well as housing association policy and the delivery of European funding streams. Elwyn Roberts MA, FCA Chair of Group Audit and Risk Committee Elwyn Roberts is an engineering graduate and qualified as a Chartered Accountant with Deloitte Haskins and Sells in Cardiff. He became a partner in the audit and assurance business of PwC in 1990 and retired from the organisation in December 2011. While at PwC, Elwyn was involved in developing the firm s housing association portfolio in Wales and the South West. He also advised a range of organisations in the charity sector, including the Aberfan Disaster Fund, and was appointed to the Charity Commission s national working party for the development of the 2000 SORP (accounting guidance for charities) in 1999. During his time with PwC in Birmingham, Elwyn was responsible for leading and developing the firm s Risk Assurance practice in the Midlands region, focusing on governance, risk and control. He also advised on corporate governance and risk management processes and procedures at a range of clients in both the private and public sectors. 36

Thelma Stober BA (Hons) Law, CEDR Accredited Mediator Thelma Stober is a Senior Public Sector Solicitor and Mediator. She is currently the Corporate Legal Adviser to the Local Government Association and its associated companies, where she delivers legal advice and company secretarial support on all aspects of law relating to public, administrative, constitutional, company, commercial, local government and corporate governance. Thelma is also a Lay Member of Herts Valley Clinical Commissioning Group and chair of its Primary Care CoCommissioning Committee. Prior to her present role, Thelma was Director of Corporate Law and Governance and Board Secretary at the Equality and Human Rights Commission and, before that, Director of Legal and Procurement and Monitoring Officer at the Greater London Authority and the London Development Agency. Dr Gareth Tuckwell MB, BS (Lond), MRCS, LRCP (Lond), Dip. Pall. Med (Univ of Wales), DObstRCOG, MRCGP Gareth Tuckwell brings many years of experience in clinical leadership, care delivery and clinical governance to the Group. He was Chief Executive Officer of Burrswood Hospital, Kent, from 2007 for a fiveyear term, Clinical Director of Hospice in the Weald from 2003 to 2007, and Regional Director of Macmillan Cancer Support from 2000 to 2003. Gareth was also a Trustee of Macmillan Cancer Support from 2003 to 2013 and a Trustee of Friends of Vellore (UK) from 2011 to 2016. Previously Gareth was Medical Director of Burrswood Hospital from 1986 to 1999 and is currently a VicePresident of the Phyllis Tuckwell Hospice, Farnham. Denise Plumpton BSc Hons, CERTIoD Denise Plumpton is a senior director with indepth experience and a sustained record of success at board level in both nonexecutive and executive capacity, holding positions including Chair of Audit, Risk and Governance Committee and Remuneration Committee. Denise is currently ViceChair at Birmingham South Central Clinical Commissioning Group and a NonExecutive Advisor to Centro (Network West Midlands) for their Smart Ticketing Programme. Denise is also an active member of the Greater Birmingham Chamber of Commerce. Since 2010 Denise has worked as an Independent Strategic Consultant advising and directing companies to improve their performance, in particular focusing on developing and delivering strategy, and enhancing customer service and process efficiency. Prior to this, Denise was Director of Information at the Highways Agency; IT Director at Sendo Group; Group IT Director at TNT UK & Ireland; and Chief Information Officer/Director for Powergen Plc. Strategic Report report Governance Financial statements Other information Group Board 37

Craig Moule BSc Hons Chief Financial Officer and Coopted Board Member Craig Moule joined Sanctuary in 1989 from Coopers & Lybrand. He is responsible for finance and resources including financial strategy, treasury and risk, information systems, business information, procurement, HR Direct and asset management. Craig manages Sanctuary s relationships with investors, bankers, internal and external auditors, and the rating agencies Standard and Poor s and Moody s Investors Service. In addition, Craig leads on negotiations of complex commercial deals including raising private finance. Ian McDermott BSc, MRICS, MCIH, PGDip Chief Operating Officer and Coopted Board Member Ian McDermott is a Chartered Surveyor, a member of the Chartered Institute of Housing and Alumnus of Harvard Business School. From February 1999, Ian was Chief Executive of Stonebridge Housing Action Trust and then from April 2005 he was Group Chief Executive for Shaftesbury Housing Group. Shaftesbury joined the Group in April 2007. As Chief Operating Officer, Ian is responsible for driving operating performance and looking at how to create maximum value for all of Sanctuary s stakeholders. Ian has direct line management of our Affordable Housing division. 38