Chairman’s statement

Introduction

When I wrote this report last year no one could have imagined how serious and long lasting the effects of the pandemic would be. Over the last 18 months, our staff, customers and local community have all experienced significant disruption, including three national lockdowns. Sadly some have also had to cope with personal tragedy and bereavement.

Financial performance

COVID-19 was ever-present throughout the year and resulted in a decline in income and profits. However, our sound financial base, and our countercyclical healthcare portfolio, gave us some resilience to its worst effects. The pandemic has accelerated many of the trends already apparent, including the move to shopping online and flexible working. As society unlocks, it will be interesting to understand the trends and changes in behaviour that may become permanent.

Despite the upheavals of the last year, in many respects we continued to operate as we would in any other year. Development projects were completed, property continued to be let, residents were supported by our on-site maintenance team throughout, and our property teams were available to provide support to our customers. One of the pandemic related benefits has been the increase in engagement with customers, and despite the challenging times for all parties, we now share a greater understanding and appreciation of each other.

Environment and community

Notwithstanding the weaker financial performance, we decided to boost our charitable and community giving, honouring commitments, and stepping up support to help those badly affected by COVID-19. Charitable and community support contributions increased 14.2% from £811,000 to £926,000. Social distancing adversely impacted our volunteering activities and therefore we concentrated on those fighting food deprivation, digital exclusion, and loneliness. In recent years, we have forged a close link with University College London Hospital NHS Trust and financial assistance was provided to support the welfare of frontline staff and to fund two research fellows studying the impact of long COVID.

As we move towards the Government’s target of net zero carbon emission, environmental issues are rapidly gaining importance. We also face a number of hard targets on energy efficiency that we need to achieve in the next ten years. To do this we require a better understanding of the impact of our properties on the environment and this will be a priority in the coming years. We are committed to being a net zero carbon business by 2040 and will publish our pathway towards achieving this within the next 12 months. Initiatives to reduce and eliminate carbon in the development and refurbishment of our buildings and to improve ongoing environmental performance will form a key part of our commitment to a more sustainable future.

Board changes

Andrew Hynard stood down from the Board in September 2020 and I would like to thank him for steering the Company over the last four years. After more than 20 years, Simon Baynham retired as Property Director and after 12 years, Sir Christopher Howes retired as Deputy Chairman and director. Our grateful thanks to Simon for his immense contribution in identifying many of the opportunities from which we continue to benefit and to Sir Christopher for his wise guidance and counsel over many years. Toby Shannon succeeds Sir Christopher as Deputy Chairman.

We were delighted to appoint Mark Kildea, previously Chief Operating Officer and formerly Finance Director, as Chief Executive. Mark stepped up to the role of Interim Chief Executive in September 2020 and was permanently appointed in May 2021. He has had to deal with an exceptionally difficult period. We were also delighted to appoint Julian Best as Executive Property Director in October 2020. Julian was previously Property Investment & Strategy Director. Andrew Griffith, who had been Interim Chief Financial Officer since November 2020, was appointed to the Board in May 2021 as Chief Financial Officer. Andrew has a wealth of property and finance experience after 12 years at Grosvenor. Finally we were delighted to welcome Karl Sternberg who joined the Board in December 2020 as a Non-Executive Director. Karl brings considerable experience to the Board on investment management and in running a long-term property portfolio.