SNG reports strong position as merger sets up growth ambitions

SNG (Sovereign Network Group) has published its first annual report following the merger of Sovereign Housing Association and Network Homes on 1 October 2023. Covering the 2023/24 year, the report shows SNG is in a strong financial position to continue investing significantly in its existing stock, while also pursuing ambitious development plans. SNG provides 84,000 homes across the south of England, including London, and intends to build 25,000 new homes over the next ten years.

The group increased its operating surplus to £171.5m (2022/23: £163.1m), and its operating margin to 21.1% (2022/23: 19.5%). Turnover also saw an increase to £707.8m (2022/23: £691.3). As a merged organisation, SNG has a robust, diversified and resilient balance sheet with net assets totalling £2.7bn as at 31 March 2024, and fixed assets totalling £7.3bn (2022/23: £7.0bn), reflecting recent investment in new and existing homes.

SNG’s financial and liquidity position is strong with net debt of £3.6bn and available cash and undrawn facilities of £983m at the end of March 2024. This liquidity ensures SNG’s ongoing ability to support both operational cash requirements and development plans.

Matching its ambition to deliver, SNG increased reinvestment to 7.8% (2023: 5.6%). This was reflected in higher operational costs of £466.6m (2022/23: £432.5). Increased capital investment in maintenance as well as improved data analytics and customer service software, are expected to reduce future costs while delivering better services to customers. The group expects to invest a total of £9.2bn over the next ten years in new and existing homes, delivering a step-change for current and future customers.

Mark Washer, Group Chief Executive of SNG, said: “These results are a testament to our disciplined long-term approach as separate organisations before we merged, and the hard work of our people to successfully implement the process of bringing us together. We have ambitious plans to use our combined strength to invest in improving the experience for our existing customers, and to build the good, affordable homes that are urgently needed for our customers in the future.”

SNG completed 2,015 new homes in the year, with 96% affordable tenures, placing it as the second largest developer amongst housing associations, and the largest with a growing pipeline. Developments underway include the first guaranteed zero-bills social rent homes at Nexa Fields in Devon.

The increase in capital investment is guided by SNG’s Asset Management Strategy. This long-term investment approach is underpinned by grading against SNG’s Homes and Place Standard for sustainability and liveability. This standard, which was co-created with customers and asset management experts, offers a holistic view of a property and a clear direction for investment decisions.

As well as investment in homes, SNG supported its customers through the cost of living crisis to build the lives they want to lead. Employment support meant that 329 customers started work in a new or better job, and 77 were able to start or grow a new business. For the most vulnerable, £2m was deployed by the SNG customer support fund to help customers. Interventions with customers on universal credit bought in an extra £2.29m income that they were entitled to, while poverty support services saved customers over £463k, and help with utility bills saved customers £380k. 

Alongside the annual report SNG published its first Impact and Sustainability Report, which showed that SNG generated a social value of £102.3m last year. Direct community investment of £3.5m in 2023/24 was supported by bringing in partnership funding of a further £2.4m. The upcoming SNG Community Foundation will build on this successful work to enable £100m of investment into SNG communities over the next ten years.

Mark Washer added: “SNG is driven by its social purpose, and a clear part of that purpose is for our customers to have the foundation for a better life. Our first report as a merged group shows that the work we do in the community makes a real difference and the impact of the Community Foundation will support communities to thrive over generations.”

The full SNG Annual Report 2023/24 can be seen here [pdf 29MB], and the full Impact and Sustainability Report 2023/24 can be seen here [pdf 4MB].