2016 Annual Report

Financial Performance 2015-16

The Association has had another successful year. We have outperformed the budget, and have complied with all the financial requirements of the banks and Welsh Government.

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Charles Brotherton

Director of Finance

The Association’s financial plans are guided by two principles; only borrow to invest in providing new homes and generate surpluses. The surpluses provide the funds for investing in the existing homes and increase the financial strength of the Association, while the borrowing to invest, ensures new properties can be provided to meet the local housing need.

The income of the Association has continued to increase, reflecting the increased number of homes the Association now manages. The total rent and service charge income is now £7.2 million, while the surplus is now £684,000.

In very broad terms, one-third of this is spent on maintaining the homes, another third is spent on providing services and managing the Association, while the final third is spent on supporting new development, through paying interest costs and repayment of loans. This broad split of expenditure is very similar to those of the last couple of financial years.

Where does my pound get spent?

The surplus of £684,000 is used to enable the money borrowed in providing the homes to be repaid. The Association currently has £40 million of borrowings. The surplus in future years will need to increase further to ensure the Association can repay the loans over the next 30 years as required by the banks and building societies.

In addition to the running costs of the Association, we continue to invest in providing more homes and improving our existing homes.

One of the key aims of the Association is to provide more homes. To pay for these new properties the Association applies for grants from the Welsh Government along with borrowing money from banks and building societies.

Last year the Association spent almost £5.5 million on our assets as illustrated in the following graph. This level of spend on providing new homes was slightly higher than £5 million in the previous financial year.

The £4.5 million spent on providing new homes, is funded from grants from the Welsh Government, plus money borrowed from the banks and building societies. The rents paid by the tenants in those new homes pay the interest and repayments on those loans.

The Association has invested almost £0.7 million in improving the existing homes, replacing items such as windows, kitchens, bathrooms and heating systems. This investment is paid for from the rents received and not through borrowings.

With the restructured staffing and governance structures established, and strong finances, the Association is well placed to grow and continue to provide excellent services to our customers.

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