South West housing association Merlin has reported a 19% increase in its net operating surplus to a record £10.5million.
The record surplus was one of several landmarks for Merlin during the last financial year which also saw it increase its operating margin to 34%, off the back of a 4% increase in turnover to £41.9million and a 6% reduction in costs to £27.8million.
Merlin’s strong performance during the year was further demonstrated by its reduction in tenant arrears to a record low (0.9%), best ever levels of customer satisfaction (87%), and building more homes than ever before (79).
The increased surplus will help fund Merlin’s growing development ambitions over the coming year. With 355 new homes in its development pipeline, Merlin plans to increase it homebuilding programme and complete 130 properties in 2016. During the past year Merlin has increased its loan facilities to fund this increased building programme, as it seeks to expand its homebuilding programme to 300 new homes a year by 2019.
Merlin Chairman Andrew Frayling said: “I am very pleased to report a further step change in results for the year ending 31 March 2016. The results underline the importance of having clarity of purpose and delivering the right plan during what has been, and continues to be, a challenging operating environment.
“By focusing on our financial discipline we have been able to increase our operating margin to 34%, up from 27% last year and 18% the previous year. As a result we are posting our largest ever surplus of £10.5m, up from £8.8m last financial year.
“I am also delighted to that customer satisfaction has increased to 87%, up 4% in just one year. Whilst much of our focus is on finances and developing new homes, we continue to believe that increasing efficiency and increasing customer satisfaction are not mutually exclusive.
“In the year we completed 79 new homes, and have increased our development pipeline to 355 new homes. We will continue to develop homes for rent and will increase the numbers we develop for shared ownership.”
Over the year Merlin invested £12m in developing new homes and a further £11.5m improving its current homes. This included fitting new external wall insulation to 146 homes and remodelling a supported housing scheme to convert bedsits into one and two bedroom flats.
Merlin also saved £139,000 by decreasing the time it takes to re-let empty homes, from 30 to 22 days. It plans to bring this down to 18 days in 2016/17.