Development
The Group leads the Matrix Housing Partnership which successfully delivered around 1,500 new homes through the 2011-2015 HCA
Affordable Housing Programme. The Partnership is currently delivering over 1,400 additional new homes through the HCA’s Affordable
Homes Guarantee Programme and the Affordable Homes Programme combined. As part of these programmes Accord has or will deliver
1,600 new homes to local communities, representing a total investment of £205.6 million invested in new housing supply including
£13.2 million HCA grant. In 2015/16 alone the Group committed £15.1 million to the development of new homes. The development of
new homes continues to be financed by a mixture of HCA grants and the Group’s own reserves. A key success factor on the delivery of
new homes is the development and maintenance of sound working relationships with our many local authority partners and other key
stakeholders. The Group continues to build on its strong reputation and proven track record in both the development of general needs
and supported housing. The 2015-18 development programme includes the commencement of the Dementia Centres of Excellence in
Staffordshire.
Operations at Accord Group’s LoCaL (Low Carbon Living) Homes factory remain strong with production levels continuing to increase. The
factory produces high quality, energy efficient timber frame homes from sustainable materials and continue to supply homes for more than
half of Accord Group’s development programme. The factory is based in Walsall and provides employment and skills opportunities to a
number of local people. 2015/16 production targets delivered new homes for the next phase of the Tile Hill development.
Capital structure
Total funds including long term creditors at the end of the period amounted to £801.179 million (2015: £789.904 million restated), of which
£128.333 million (2015: £121.136 million) comprised the income and expenditure account reserve. The increase is due to an increase
in tangible fixed assets, social housing grant, investments increased borrowing and the surplus for the year. Long term borrowings at
the end of the period have increased to £400 million from £396 million in 2015. Balance sheet gearing of the Group at the year-end is
47.1% (2015: 47.7%) and remains comfortably within its funding covenants. All other members of the Group comply with their funding
covenants, including those covenants introduced under the group funding facility. The Group has access to undrawn borrowing facilities
of £58.9 million, and has substantial unutilised security on its balance sheet. These facilities ensure that we remain in a strong position
to fund future growth plans and investment opportunities. The net movement in cash for the year was an inflow of £2.936 million (2015:
£1.341 million inflow) reflecting the net impact of our development programme, increased borrowing, higher debt management costs and
increased growth linked to new developments and services. The average interest rate for the year stood at 4.28% (2015: 4.11%). Interest
cover for the Group stands at 172.2% (2015: 159.8%) and remains comfortably within funding covenants.
Treasury management and control
Treasury activities are controlled by the Group Finance Director with the assistance of external consultants as required, and are carried
out in accordance with policies approved by the Board. The purpose of the treasury management function within the Group is to ensure
that adequate cost-effective funding is available at all times and that exposure to financial risk is minimised. The key risks managed by the
treasury function are interest rate risk and liquidity risk. Treasury management activity is subject to regular review by internal auditors and
treasury specialists. Treasury activity is closely monitored on a regular basis and compliance with covenant conditions continues to be
met with no breaches in the year. Quarterly monitoring information and management accounts are submitted in accordance with funder
and regulatory requirements. Short, medium and longer term liquidity requirements are monitored through ongoing forecasting and the
business planning process. It is the Group’s policy to balance the cash held by repaying debt as far as possible, while ensuring sufficient
access to funding facilities to cover investment and business development plans.
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Accord Group