Longhurst Group overcomes challenging climate to achieve best ever financial results
22 August 2017
Through operating with greater efficiency, achieving value for money savings and reviewing its structure and governance, Longhurst Group has posted record financial results.
The Group, which owns and manages over 21,000 properties across the Midlands and East of England, cut operating costs by £4.62 million during the 2016/17 financial year, while generating value for money savings of £1.8 million.
An overall surplus of over £17 million before tax was also achieved, as well as an underlying operating margin of 36.38 per cent; a seven per cent increase on the last financial year.
The Group also added 400 new homes to its portfolio and invested more than £30million into its affordable homes programme. This was achieved with minimal grant funding.
At a time when housing associations across the country are feeling the pinch due to a multitude of challenges, these results exceeded targets that were set to adjust to the impact of the rent reductions introduced by the government.
Rob Griffiths, the Group’s Deputy Chief Executive and Chief Financial Officer, said: “Improving the lives of our customers is at the heart of everything we do. To be able to achieve that vision it’s crucial that we are financially stable and well-prepared for the future.
“Being able to continually improve the way we operate as a business helps us ensure longevity and ongoing success, as we aspire to deliver 3,000 new homes over the next five years.
“The Group is committed to achieving and maintaining the highest standards of corporate governance to help deliver the objectives set out in our business plan and to manage risk. These results show that our new streamlined governance structure is helping us to realise these ambitions
“We still have a lot of hard work ahead to ensure we can deliver on our growth targets but being financially resilient and through strong leadership, we can continue to provide we will great homes and high-quality care and support services.”
Although the Group’s turnover reduced slightly, sales performance was strong with the margin on new sales increasing from 19.9% to 29.9% and generating a surplus of £2.8 million.
Other highlights during the last financial year include a reduction in rent arrears from 2.50 per cent to 2.16 per cent, a six per cent reduction in void repair expenditure and supporting 11 customers into employment.
The Group’s work through the Blue Skies Consortium also delivered 175 new homes into management for consortium members with a further 541 started on site and a grant take up of £4.969 million.
An increasing portion of our new build homes programme were for low-cost home ownership: in 2016/17, around 50% of the homes we built were for sale (including shared ownership), with the remainder for rent. We still expect the split between rented and low cost home ownership to move towards 40/60% in the future
Structural changes in the last financial year include the introduction of a coterminous Board, known as the Homes Board, which brings together the Boards of all three Group member companies, L&H Homes, Spire Homes and Friendship Care and Housing.
This structure creates an improved platform for collaborative working, driving good practice, innovation and efficiency across the Group, whilst respecting local need and priorities.