Objectives and Strategy

GreenSquare's mission is seen as "housing people, building communities." The achievement of this is underpinned by four key vision statements:

1. Develop good quality housing to meet a wide and growing range of needs.

2. Create places where people want to live, and support a good quality of life.

3. Provide the range and quality of services our customers want.

4. Grow our activities and improve our financial strength and sustainability.

The following list of key risks is drawn from the 2012/2013 GreenSquare Group Limited annual report:

Key Risks

Comment

Current economic climate and impact on public sector funds and the housing market

The continued restraints on government spending, changes to the housing benefit rules, along with the wider economic downturn, have been identified as key risks to the group. Such changes are likely to impact on the group's ability to deliver its planned development program and may also affect core activities.

Delivery of development program

Successful delivery of the program depends on continued support from the HCA for the Group, as well as the ability and willingness of development contractors to continue to build the Group's schemes in a challenging economic environment.

Availability of finance

Availability of loan finance is key to a thriving housing market, with potential impact on the Group's ability to deliver its development program as well as difficulty for potential shared ownership purchasers to raise finance.

Low demand for housing properties developed for sale

The Group's development program includes low-cost home ownership. Success depends on demand for the properties. Low demand in the housing market generally has an impact on low-cost home ownership schemes.

Rise in final salary pension scheme liabilities to unaffordable level

The Group could face significant liabilities for meeting pension fund deficits. The Group's contributions to the fund may need to increase significantly in order to fund the scheme.

Change in government policy or new legislation

Such changes could have significant impact on the sector and therefore the operations of the Group (e.g., changes to the planning or tax regimes may increase costs of new developments, reducing scheme affordability).

Performance failure

Performance failures in services to our customers would affect the Group's rating with the HCA and its reputation in the sector. Failure to deliver its development program may result in a withdrawal of capital grant.

Loss of key staff

Retention of quality staff and managers is key to successful delivery of the Group's business plans.

Selected summarized financial statements of GreenSquare Group Limited from the previous five years are presented in Exhibit 8.6.[1]

Exhibit 8.6 Financial Performance of GreenSquare Group

Panel A: Income and Expenditure Account

Income and expenditure account (£ million)

2013

2012

2011

2010

2009

Turnover

56.2

48.5

45.0

45.3

45.7

Operating costs and cost of sales

(43.1)

(37.2)

(35.0)

(35.0)

(36.8)

Operating surplus

13.1

11.3

10.0

10.3

8.9

Net interest charge

(11.0)

(9.5)

(9.2)

(8.4)

(7.7)

Surplus on disposal of assets

0.8

0.3

0.1

0.2

0.1

Other income (note 1)

10.5

Taxation

0.1

(0.3)

(0.1)

(0.02)

(0.1)

Surplus for the year after tax

13.5

1.8

0.8

2.1

1.0

Panel B: Balance Sheet

Balance sheet (£ million)

2013

2012

2011

2010

2009

Housing properties at current valuation

545.2

384.5

350.6

343.2

301.5

Other tangible fixed assets and investments

6.3

6.2

5.7

5.7

5.7

Net current assets

20.3

3.3

(4.1)

4.3

6.9

571.8

394.0

352.2

353.2

314.1

Loans due after one year

(281.6)

(237.3)

(211.3)

(210.3)

(194.1)

Other long-term liabilities

(6.7)

(6.7)

(5.1)

(10.2)

(4.6)

283.3

150.0

135.8

132.7

115.4

Panel C: Cash Flow Statement

Cash flow statement (£ million)

2013

2012

2011

2010

2009

Net cash inflow from operating activities

20.9

20.1

20.1

20.1

20.1

Interest paid/received

(10.7)

(10.6)

(10.6)

(10.6)

(10.6)

Tax paid

(0.1)

(0.1)

(0.1)

(0.1)

(0.1)

Cash from acquisition of Oxbode

2.3

(0.9)

(0.9)

(0.9)

(0.9)

Capital expenditure

House construction and purchase

(29.2)

(39.1)

(39.1)

(39.1)

(39.1)

Capital grants received

4.1

9.3

9.3

9.3

9.3

Purchase of other assets

(1.1)

(0.7)

(0.7)

(0.7)

(0.7)

Sale of fixed assets

1.7

1.0

1.0

1.0

1.0

Subtotal

(24.5)

(29.5)

(29.5)

(29.5)

(29.5)

Cash outflow before financing

(12.1)

(21.0)

(21.0)

(21.0)

(21.0)

Cash (invested in) term deposits

(13.7)

(2.2)

(2.2)

(2.2)

(2.2)

Financing

Loans received

31.8

26.6

26.6

26.6

26.6

Loans repaid

(1.0)

(0.8)

(0.8)

(0.8)

(0.8)

Increase in cash and cash equivalents

5.0

2.6

2.6

2.6

2.6

Note 1: Gift on acquisition when Oxbode joined the Group in November 2012.

  • [1] For GreenSquare's financial statements, see: greensquaregroup.com/upload/5236 bbc772028GS.pdfandgreensquaregroup.com/upload/50619fdl2a9aaGS_reportll 12.pdf.
 
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