30 June 2020
A picture of Sanctuary Group issues strong financial results for 2019/20

Key highlights:

  • Sanctuary reports revenue growth to £763m, up from £735.4m
  • Homes in management growth to 102,686, up from 101,281
  • Underlying operating surplus1 of £182.6m, up from £181.0m
  • Cash generated from operating activities of £244.2m, up from £215.2m
  • Strength of balance sheet reflected in cash reserves of £261.5m
  • Interest cover 2.09

Sanctuary Group has issued its audited financial results for 2019/20 which shows improved underlying performance and demonstrates the Group’s strong financial position.

Table showing Sanctuary Group's financial performance

The Group, which manages 102,686 homes across England and Scotland, saw revenue grow to £763m, with an enhanced development programme and acquisitions offsetting the impact of the fourth year of the social housing rent reduction in England. 

The underlying operating surplus of £182.6m represents a £1.6m improvement over the prior year (£181.0m in 18/19). Whilst this represents a slightly lower underlying operating surplus margin3 of 23.9% (24.6% in 18/19), this is a positive result when taking into account a further year of rent reductions, compliance expenditure, increased staff costs and an impact from COVID-19.

Sanctuary’s solid financial performance is built on its successful operations – key year highlights being rent arrears of 3.6% (3.8% in 18/19), void loss at 1.1% (1.1% in 18/19), 203 sales of new homes through the Group’s development programme (150 in 18/19), and improved maintenance performance with an increase in customer satisfaction to 94% (93% in 18/19).

Net finance cost on borrowings, before loan break costs, was £124.2m, a decrease of £1.5m from last year. A tranche of legacy debt was repaid during the year, which will lower the interest cost to the business in the long-term, even after considering the £8.6m loan break costs.

The underlying surplus for the year before tax of £57.4m is £3.2m ahead of last year, reflecting the good underlying operating performance in conjunction with a lower interest burden.

The strength of the Group’s balance sheet is reflected in the £261.5m of cash reserves (£150.1m in 18/19) which was increased by a £350m Bond Issue in April 2020 at a coupon of 2.375%. The Group has also maintained strong credit ratings of A2 stable and A+ stable from credit rating agencies Moody’s and Standard & Poor’s respectively.

Ed Lunt, Sanctuary Group Finance Director, commented: “Our financial results have been delivered through a strong operational performance reflecting the dedication of our people and the economic benefits of our national and diversified footprint. We remain in a strong position to face short-term challenges while continuing to deliver our long-term strategic objectives of investing in homes and providing housing and care to those in need.”

Notes:

1 Operating surplus before restructuring costs and other gains and losses

2 Surplus for the year before tax excluding restructuring costs, other gains and losses, and loan break costs

3 Underlying operating surplus as a percentage of revenue