Financial Statements 2020 | 11
Financial Review
Overview
The year ended 31 March 2020 has continued to see additional provision of social housing and further consolidation of a sound financial position . Despite the challenging operating environment , both turnover and operating surpluses increased from the prior year demonstrating strong financial management , a commitment to value for money and a commitment to investing in our properties and services .
Financial Highlights
The proceeds from these sales will be reinvested back into new supply and have been incorporated into our development programme and financial plan . We also disposed of two obsolete offices ; generating a further £ 0.5m surplus and will benefit from reduced running costs in future years .
Overall net interest payable increased to £ 17.4 million ( 1.9 %) as a result of increased borrowings to fund our development programme and fulfil our commitments under the Homes England grant programmes .
Statement Of Comprehensive Income
2020 2019 £ 000s £ 000s
2020 2019 Statement Of Financial Position £ 000s £ 000s
Turnover 124,958 119,646 Operating costs ( 98,787 ) ( 92,797 ) Disposal of properties 5,140 454 Operating surplus 31,311 27,303 Net interest and taxation ( 17,366 ) ( 17,050 ) Net surplus 13,945 10,253
Key Financial Metrics Operating margin ( inc . prop . sales ) 25.1 % 22.8 % EBITDA MRI 155.8 % 157.7 % Chief Executive pay as % of turnover 0.2 % 0.2 %
The organisation generated an operating surplus of £ 13.9m for the year ended 31st March 2020 ; £ 3.5m more than in the prior year . Overall turnover increased by £ 5.3m ( 4.4 %) compared to 2019 with half of this attributable to social housing lettings and half being attributable to non-social housing activities such as LoCaL Homes . Operating costs also increased as a result of cost inflation , increased activity in our factory and maintenance costs relating to improving the voids process and enhancing safety standards for our customers .
The surpluses on disposal of properties were much higher than in 2019 as we took part in the Voluntary Right to Buy Midlands pilot which proved very popular . We sold 70 properties through the scheme in the year , generating a surplus on sales of £ 4.2m .
Fixed assets 947,684 913,130 Net current assets 6,361 3,801 Long-term liabilities & provisions ( 781,657 ) ( 765,733 ) Net assets 172,388 151,198 Reserves 172,388 151,198
Key Financial Metrics Units owned / managed 13,315 13,277 Gearing 49.4 % 50.2 % Average cost of finance 3.65 % 3.83 %
Fixed assets increased by £ 34.6m ( 3.8 %) as a result of investment in new properties through our development programme , investment in our existing properties through our planned maintenance programme including kitchens , bathrooms and central heating replacements and investment in other fixed assets such as computer software .
Net current assets are £ 2.6m higher than the prior year , predominantly due to higher cash balances , lower rent arrears and the profile of debt repayments with a higher amount falling due within 1 year . Long-term liabilities are £ 15.9m higher as a result of additional borrowings and capital grant receipts in the year , partly offset by a reduction in pension liability following the latest actuarial report .