Arhag Annual Report 2021

The VfM standard and Code of Practice (“Code”) sets out the requirements for registered providers to publish annual evidence in the financial statements to enable stakeholders to understand the provider’s: a) Performance against its own value for money targets and any metrics set out by the regulator. b) Measurable plans to address any areas of underperformance, including clearly stating any areas where improvements would not be appropriate and the rationale for this. The suite of VfMmetrics set out by the regulator in a) is restricted to data derived from the financial statements and regulatory returns such as the Financial Viability Assessment (“FVA”). All metrics are derived from data that is already in the public domain in the providers’ own financial statements and the Global Accounts dataset. The metrics include output measures alongside cost data, and measures of the efficiency with which both resources and our assets are utilised. This includes the degree of investment to existing stock as well as new supply. (+) Targets are taken from the first year (2021/22) of the association’s long-term financial plan Quartile comparisons are taken by reference to the Sector Scorecard results for 2020 across the housing sector and as such includes a wide variety of associations VfMMetrics Target (+) 2021 Quartile 2020 2019 Reinvestment (%) 1.2% 0.3% 4th 1.0% 9% New supply delivered – Social (%) 2% 0% 4th 0% 8% New supply delivered – Non-social (%) 0% 0% 4th 0% N/A Gearing (%) 34% 34% 3rd 37% 35% EBITDAMRI Interest Cover (%) 160% 180% 3rd 181% 329% Social housing cost per unit £5,712 £5,672 4th £4,749 £5,921 Operating Margin (%) – Social lettings 18% 10% 4th 23% 17% Operating Margin (%) – Overall 20% 12% 4th 22% 17% Return on capital employed (ROCE) (%) 2.5% 2.4% 3rd 2.6% 2% 3. VALUE FORMONEY STATEMENT 24 ARHAG