Financial Viability

On 31 March 2011, the Welsh Assembly Government issued their Financial Viability judgments for all Housing Associations in Wales. The categories of judgments were as follows:

• Pass
• Pass for closer monitoring
• Fail

The Hendre Group, of which Hafod is a member, received a "Pass" from the Welsh Assembly Government demonstrating our strong position as we move forward through 2011 and beyond.

Within this judgement the Assembly Government went on to say that: ....the Group has adequate resources to meet current and future business and financial commitments.
More particularly, the Assembly Government provided the following reasons supporting the judgement formed:

1. The 30 year forecast has been prepared on a reasonable set of assumptions and demonstrates sufficient prudence to remain viable under a variety of economic scenarios.

2. The forecast shows Hafod Housing Association operating near, but within, it's gearing covenant limit measured at historic cost, in the short term. We are content that management have sufficient flexibility in their capital improvement and development programmes to manage this within a reasonable level of comfort.

3. The Group generates adequate income from its operating activities to fund its forecast spending on property maintenance. The level of costs included in the forecast seems reasonable to deliver substantial Welsh Housing Quality Standard compliance by the Group's own target date.

4. Whilst significant, the level of committed development included in the forecast is within our expectations of what the Group can achieve and is sufficiently funded. There is a history of the Group delivering schemes of a similar size in the past to those currently being undertaken.

5. There is no over reliance on property sales, or commercial activities to fund the Group's operations."

We are therefore pleased that the Hendre Group comfortably met this external test of financial viability