FINANCIAL PERFORMANCE £5,251K Social housing operating costs £1,089K Increased surplus in 2021/2022 2. FINANCIAL PERFORMANCE AND VIABILITY STATEMENT Surplus for the year Arhag has delivered a 32% increase in its surplus for the year from £822k in 2021 to £1,089k despite a reduction in the contribution from the sale of fixed assets from £1,122k last year to £657k this year. This improved performance has been achieved through increasing turnover by 3% and reducing operating costs and interest charges by 8%. Despite the continued uncertainty through the past two years over the wider economic climate, as a consequence of Covid-19 and any lasting impact of Brexit, our improved financial performance has been essential in enabling us to look forward with confidence to continuing to deliver our social objectives. The Board of Arhag is therefore delighted to report a good set of results for the year and a strong financial position. Turnover Social housing lettings turnover increased by 3% from £6,478k to £6,672k with the addition of 21 intermediate rent units in Newham at the end of June 2021 combined with the annual increase in social housing rents to offset the loss of income following the disposal of five units in south London this year and the full-year impact of the disposal of 10 units a year earlier. Income from partners reduced slightly during the year as we worked with them to mitigate the impact of the Covid pandemic by reducing the service charges of the accommodation at The People’s Place to reflect lower usage of the building. Operating costs Social housing operating costs have reduced by 8% from £5,705k to £5,251k. The surplus generated by the sale of the units in April 2021 was used during the remainder of the year to boost our investment in Arhag’s underlying health & safety compliance position concentrating on bringing properties transferred to us in previous years up to an acceptable standard and in continuing the original accelerated rate depreciation of the costs of moving to Stratford. During this financial year our property, building safety and compliance team has continued to improve our health & safety compliance across our properties with continued and substantial investment in fire risk assessments, gas and electric testing and in making changes to the properties as necessary from the resulting reports. 5 UNITS have been sold in south London to a local registered provider in 2022 28 ARHAG
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