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ASSOCIATION B: RCT HOMES

RCT Homes Limited is the largest social landlord on Wales and winner of Business in the Community's Welsh Company of the Year 2012 Award. RCT is based in Pontypridd, in the Welsh county borough of Rhondda Cynon Taf, situated at the confluence of the Rhondda and Cynon Taff valleys. The town is famous for its old bridge, which, when it was constructed in 1756, had the longest single-span

Exhibit 8.3 Financial Performance of London & Quadrant

Panel A: Income and Expenditure Account

Income and expenditure account

(£ million)

2013

2012

2011

2010

2009

Turnover

457

368

327

330

306

Operating costs and cost of sales

(238)

(243)

(240)

(276)

(224)

Operating surplus

181

144

89

87

66

Net interest charge

(70)

(65)

(62)

(43)

(41)

Surplus on disposal of assets

11

16

17

17

12

Taxation

(4)

Surplus for the year after tax

118

95

44

61

37

Panel B: Balance Sheet

Balance sheet (£ million)

Housing properties at cost less

2013

2012

2011

2010

2009

depreciation

4,787

4,618

4,411

4,247

4,023

Social housing and other grants

(2,625)

(2,564)

(2,515)

(2,336)

(2,215)

Subtotals

Other tangible fixed assets and

2,162

2,054

1,896

1,911

1,808

investments

144

51

55

53

28

Net current assets

395

340

457

355

196

2,701

2,445

2,408

2,319

2,032

Loans due after one year

1,877

1,749

1,779

1,880

1,667

Other long-term liabilities

249

216

186

28

12

Cash flow hedge reserve

(93)

(77)

(24)

(28)

(42)

Revenue reserve

668

557

467

439

395

2,701

2,445

2,408

2,319

2,032

Panel C: Cash Flow Statement

Cash flow statement (£ million)

Net cash inflow from operating

2013

2012

activities

141.3

123.3

Interest paid/received

Capital expenditure

(93.1)

(83.1)

House construction and purchase Capital reinvestment in existing

(146.5)

(177.2)

stock

(49.9)

(70.2)

Capital grants received

57.4

65.2

Purchase of other assets

(95.8)

(1.3)

Sale of fixed assets

26.5

36.1

Subtotal

(208.3)

(147.4)

Cash outflow before financing

(160.1)

(107.2)

Cash withdrawn from term deposits Financing

56.9

26.2

Loans received

250.0

Loans repaid

Increase/(decrease) in cash and

(135.5)

(3.4)

cash equivalents

11.3

(84.4)

Panel D: Financial Ratios and Statistics

Financial ratios and statistics

2013

2012

2011

2010

2009

Operating margin on social housing lettings Operating margin – all

46%

46%

34%

37%

31%

activities

Interest cover – excl asset

40%

39%

27%

26%

22%

sales & disposals Interest cover – incl asset

212%

211%

142%

202%

161%

sales & disposals

277%

244%

170%

242%

190%

Net gearing Operating cost per unit

56%

53%

51%

53%

56%

managed £

2,900

2,700

3,200

3,100

3,300

Net debt per unit managed £

25,400

23,700

22,600

23,400

22,700

Homes managed (000's) Estimated open market value

70.1

68.6

67.1

62.1

60.6

of homes £ bn

12.0

10.8

10.3

9.4

8.5

Panel E: Product Profitability

2013

2013

Operating

Turnover

Surplus

Product profitability

Social housing

£m

£m

General needs

274.7

131.9

Supported housing

22.5

5.9

Intermediate market rent

16.2

8.0

Low-cost home ownership

49.7

19.6

Affordable rent

4.4

(0.3)

Other social housing activities

7.1

(4.8)

Community investment

0.2

(9.8)

374.8

150.5

Other

Outright sales

76.4

27.2

Market rent

2.6

1.4

Student accommodation

2.5

1.0

Commercial

0.5

0.5

Total

456.8

180.6

Disposal of fixed assets

11.5

Interest payable/receivable

(69.3)

Other

(0.3)

Tax

(4.4)

Surplus for year after tax

118.1

stone arch in the world. The coal mines that formerly were the basis of the area's economy were closed in the 1980s, and it has been difficult to attract new industry. In Rhondda Cynon Taf, the unemployment rate and the proportion of people of working age claiming benefits remain about 50 percent greater than in other parts of the United Kingdom.

RCT Homes was set up in 2007 to take over the ownership and management of more than 10,000 homes in the borough, which had been allowed to get into bad condition. In particular, over 30 percent of them did not meet the Welsh Housing Quality Standard, which the Welsh government said should be satisfied by the end of 2012. The performance of some services that tenants had been receiving was also well below the standard they had a right to expect.

RCT is a community mutual organization with nearly 5,000 members and a board comprising 15 people: five tenants, five members nominated by the Rhondda Cynon Taff Council, and five independent members. Board members are not paid. RCT now employs more than 500 staff and has four unregistered subsidiary companies – Meadow Prospect, Grow Enterprise Wales (GrEW), Homeforce, and Porthcwlis.

At transfer, funding was agreed from the government and from Lloyds Bank to pay for the required works, and 86 performance promises were made to tenants. Eighty promises, including achievement of the Welsh Housing Quality Standard, were signed off as delivered by the RCT Homes Members' Forum and the local authority ahead of schedule in December 2012, and RCT has written to every household to inform tenants and invite challenge.

 
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