Group Financial Statements 2012 - Riverside

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Turnover has increased year on year, compared to the previous year, following two acquisitions. On 1 October Irvine Housing Association joined the Group. Riverside’s first move into Scotland brought 2,196 homes, generating income of £3.5m in the year. On 1 December, the Group acquired Evolve Facilities Services Limited, a Merseyside based repairs contractor, which contributed £3.5m to turnover. The Group also benefited from the organic growth delivered by the development programme of 600 units and from the RPI linked annual rent increase. Operating surplus has fallen since last year. This is explained mainly by accounting changes, following the introduction of component accounting, which increased the charge for major repairs and depreciation by £3m, and by impairment provisions made in the commercial part of the business (£4.6m) and the housing stock (£2m). Operating costs of management and maintenance were held at last year’s levels. The contribution from property disposals reflects the implementation of the Group’s active asset management strategy. The exceptional credit taken in the year relates to the goodwill arising on the year’s two acquisitions. The Group’s interest bill increased slightly from last year, with the drawdown of banking facilities to fund the development programme. The Group continues to demonstrate its ability comfortably to exceed its interest cover covenant requirements. Balance Sheet The full balance sheet is provided on page 26 and supporting details can be found in the notes to the accounts on pages 31 to 83. The following table provides a summary of the key elements of the Group Balance Sheet. For the year ended 31 March 2012 2011 £m £m Goodwill 4 — Tangible fixed assets 1,744 1,618 Social Housing Grant (881) (841) Investments 26 24 Fixed assets 893 801 Net Current Assets 84 91 Total Assets less current liabilities 977 892 Creditors falling due after more than one year 742 677 Reserves 235 215 977 892 Gearing (%) 63.5 57.5 Key highlights are: — a significant increase in fixed assets as a result of the acquisition of Irvine, together with investment in new properties and in improvements to existing properties — this is matched by the increase in long term creditors — the Group’s gearing ratio (measured as long term loans as % of Social Housing Grant plus reserves) has increased from 57.5% to 63.5%. This is in line with expectations following the change in structures of grant funding for development. 5,701 We said that we would refer 1,500 tenants for sustainable employment or volunteering. We did refer 5,701. 1,604 We said that we would help 500 older tenants access Riverside services in Live Time pilot areas. We did help 1,064. 12
Capital structure and treasury policy Effective treasury risk management is essential for both financial performance and balance sheet stability. Treasury management is operated centrally in accordance with Board approved objectives and operating parameters, set out in the Group treasury policy and a treasury strategy which is revised annually. Key issues the treasury strategy seeks to address are funding and liquidity risk, interest rate risk, covenant compliance and exposure to counterparties. The Group borrows at both fixed and floating interest rates. Derivative instruments are used to manage its exposure to interest rate fluctuations. Strategies are tested by business plan sensitivities and are developed through a process of regular review and refinement. Regular updates on all treasury activities are given to the Group Finance Committee. Group borrowings total £716m (2011: £618m). The movement reflects loans drawn to fund stock development and improvement, net of scheduled debt repayments, together with the consolidation of Irvine. New debt drawn in the year totalled £64.8m (2011: £19.6m). Interest costs are at £37.6m (2011: £34.4m). The average rate of interest paid in the year was 5.1% (2011: 5.3%). The Group aims to minimise cash held whilst ensuring that sufficient loan facilities are available to finance a minimum of one year’s cash flow. At the year end the Group had £60m of unutilised committed borrowing facilities. Operating performance in the year 2011-12 has been another year in which the Group has made significant progress in improving operational performance towards its strategic objectives. The following paragraphs give some highlights of the Group’s achievements. As good as the best There are a number of key performance indicators which are monitored towards achieving the goal of being as good as the best. The latest customer satisfaction survey (STAR) shows that 82% of tenants said that they were satisfied with the services Riverside provides for them. 13
Page 1 and 2: Financial Statements Year ended 31
Page 3 and 4: Highlights - five year summary 2 Th
Page 5 and 6: For the year ended 31 March 2012 20
Page 7 and 8: The key to delivering our high leve
Page 9 and 10: “Our Boards today follow traditio
Page 11 and 12: Operating and financial review The
Page 13: A fitter leaner Riverside Achieve b
Page 17 and 18: More homes, fewer places The year h
Page 19 and 20: Report of the Board The Board is pl
Page 21 and 22: Corporate role of the Board The Boa
Page 23 and 24: — During the year there were no w
Page 25 and 26: Report of the independent auditors
Page 27 and 28: Group statement of total recognised
Page 29 and 30: Group cash flow statement for the y
Page 31 and 32: Association statement of total reco
Page 33 and 34: Notes to the financial statements*
Page 35 and 36: Retirement benefits The Group opera
Page 37 and 38: First tranche shared ownership sale
Page 39 and 40: Charitable reserve This reserve rep
Page 41 and 42: 2 Turnover, operating costs and ope
Page 43 and 44: 3 Income and expenditure from socia
Page 45 and 46: 4 Directors’ and senior staff emo
Page 47 and 48: 6 Surplus on sale of property Group
Page 49 and 50: 9 Surplus on ordinary activities Gr
Page 51 and 52: 10 Tax on surplus on ordinary activ
Page 53 and 54: 11 Tangible fixed assets - continue
Page 55 and 56: 11 Tangible fixed assets - continue
Page 57 and 58: 12 Investments A. Fixed assets Name
Page 59 and 60: 12 Investments - continued B. Curre
Page 61 and 62: 14 Properties for sale Group 2012 2
Page 63 and 64: 16 Creditors: amounts falling due a
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17 Debt analysis Group 2012 2011 £
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18 Derivatives and financial instru
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18 Derivatives and financial instru
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21 Reconciliation of operating surp
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25 Financial commitments At 31 Marc
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26 Pension information - continued
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Page 83 and 84:
27 Contingent liabilities As at 31
Page 85 and 86:
30 Related party transactions One B
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Group Financial Statements 2012 - Riverside

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