In the face of unprecedented change for the sector, Affinity Sutton has delivered its strongest financial performance ever.
Affinity Sutton ended 2015/16 having made a surplus of £145 million on a turnover of £386 million, and generating an operating margin of 41%. Its financial strength continues to be recognised by the ratings agency Moody’s: its best-in-sector Aa3 rating was reaffirmed in July 2016.
Over the course of the year Affinity Sutton delivered 1,041 new homes across a range of tenures. Built with just 5% of public subsidy, strong cashflows from sales helped the Group to deliver on one of its core social objectives by developing homes for those who are failed by the market. Affinity Sutton invested £148 million in social and affordable homes including £111 million in building new properties. The Group spent £73 million on its existing stock.
Sales performance in 2015/16 was significant and totalled almost £182 million, with around £64 million worth of sales completed directly by the Group and with the remainder relating to its share of sales completed by its Joint Venture partners. Affinity Sutton also completed £17 million on shared ownership staircasing and resales and £9 million on existing social housing disposals. The surplus on all sales activity was £66 million - about 45% of the Group’s overall surplus - which demonstrates it does not rely on sales performance to meet its underlying obligations.
In addition to its sustained, strong financial position, Affinity Sutton achieved a customer satisfaction rating of 83% in 2015/16, comparing favourably with some of the country’s highest performing retailers.
Mark Washer, Group Finance Director at Affinity Sutton, said: “We are immensely proud of this strong set of results which put us in position of financial resilience ahead of what will be undoubtedly challenging times.
“We are more determined than ever to increase the supply of desperately needed new affordable housing and to continuing to provide an excellent service for our residents. Strong financial performance is central to our ability to deliver.”
Affinity Sutton’s plans to merge with Circle Housing are progressing following agreement in December 2015 by both Boards on a business case. The coming together of the two organisations will significantly increase their capacity to build more new homes and the merged organisation will deliver 50,000 new homes over 10 years, making it one of the largest home builders in England. It will also become one of the country’s biggest providers of employment services, supporting 4,000 people into work annually.
Read the Annual Report 2015/16 here.