The first look financial state of the sector FY16/17, presented by Vantage and the Performance Improvement Club, is the first sector-led report of its kind. Click here to see the report in full
The report was produced in response to a demand for timely insight and analysis of the Global Accounts data. As part of Vantage’s Global Accounts Plus offering, it enables RPs to compare their individual performance against all the Top 200 RPs or against a subset that is more relevant to them. This is useful not just for demonstrating Value for Money but also to support Merger and Acquisition discussions with boards.
Vantage Chief Executive, Tony Bryan, explained that “We believe this report to be an industry first, interrogating the figures sooner, helping our clients to understand their relative performance, plan ahead and use the 2016/17 date to inform their planning for the second part of the current financial year.”
As the first of its kind, the report is sector-led, meaning executive teams can analyse many financial metrics in a meaningful way. Previous external reporting has been slow to emerge and failed to focus on the areas that really matter to registered providers.
At a time of unprecedented change in the sector, with a strong focus on delivering Value for Money as well as new homes, this report provides invaluable strategic intelligence.
Key takeaways from the report include:
- Increasing Margins: Despite a slight fall in overall turnover and against the background of the 1% rent reduction, operating margins improved and the total operating surplus of the sample increased by 15.6%.
- Decreasing Wage Bills: The year saw big reductions in employment costs (down 6.6%) and the total number of staff (down 3.85%), possibly indicating that many of the staff reductions were high-earners.
- New Homes Investment: Investment in new and existing homes is mainly being funded by cash generated from operating activities including the sales of fixed assets.
- Room for Improvement: Whilst overall spend on repairs and maintenance appears to be reducing, average spend is still well over target, with potential savings in excess of £448m per annum on routine maintenance alone.
Using the consolidated group financial statements of the Top 132 Registered Housing Providers (RPs) for the year ended 31st March 2017, Vantage have collated the Top 200 RPs financial accounts and reference the data for the Top 132 which represents 84% of the total turnover of the sector from the HCA Global Accounts data.
The Top 132 sample size represents just under £17 billion total turnover across the sector and covers a range of key topics including turnover, void losses, lettings and operating costs. Headline numbers from the report show:
- £16.69 billion total turnover
- Employment Costs reduced to £3.37 billion, down 6.6% on last year
- Number of Staff members fell by 3,979 to 99,417 FT
- Average debt throughout the period was £57.75 billion, up 3.4% on 2015/16
- Headline Social Housing Cost per Unit for 2016/17 was £3,514
Tony continued: “The sector has strengthened its financial position on a number of fronts. It’s still early but there appears to be a renewed confidence across the sector, especially as the political tide appears to be turning. Over the past few weeks we have seen positive announcements from the government including the new post 2020 rent settlement and the proposed LHA cap removal. However, many challenges remain including the continued roll out of universal credit and Brexit.”
Read the full report here.