The directors present the strategic report for the year ended 31 March 2025.

Advance Northumberland (Housing) Limited is part of the Advance Group of companies, wholly owned by Advance Northumberland Limited. The Advance Group’s overall aim is to drive economic benefit for businesses and the people in Northumberland.

The principal activity of the Company continues to be that of the provision of rented residential accommodation in Northumberland.

Advance Northumberland (Housing) Limited owns and manages over 1,150 homes across the county with a portfolio value of approximately £118m.

Advance Northumberland Housing’s aim is to manage and develop a variety of residential properties for the private rental market in Northumberland and the generation of rental income.

The principal activities of the Company are:

· to provide good quality, private rented sector (PRS) homes in the private rental market;

· to provide homes at rents that local people can afford.

In addition to delivering principal activities, the future plans of the business are:

· to progress and increase the scope of the existing capital stock improvement programme to raise the standard of the properties and increase energy efficiency and sustainability;

· to actively prospect for further investment and portfolio growth opportunities which can generate additional operational profit, whilst addressing priority housing need within Northumberland;

· to grow the scale of the maintenance division, increasing headcount and range of services, to improve service delivery and generate efficiencies.

Review of the Company’s Business during 2024/25

The company continued to perform strongly, with tangible improvements to income recovery and compliance processes. In-house resources and skills have been further bolstered, facilitating continued financial efficiency improvements and provision of services to the wider Group.

Overall lettings performance has also been strong, with timescales for tenancies being secured on available properties falling for a consecutive year. Occupancy levels fell slightly during the year due to a strategic decision to reduce refurbishment expenditure in Q3 and Q4. Revenue has grown to £6.8m (2024: £6.4m), gross profit has increased to £5.1m (2024: £4.1m). The company made a pre-tax profit of £6.7m (2024: £8.1m), a dividend was also paid to Advance Northumberland Limited amounting to £0.2m (2024: £0.5m).

The total value of the property portfolio has increased in year by £4.2m to £118m (2024: £113.8m). This includes a £5.5m upward movement in valuations (2024: £5.1m).

Principal risks and uncertainties

The Advance Northumberland Group takes a proactive approach to risk management.

The overarching strategic approach and risk appetite is set by the Advance Northumberland Group Board. The organisational hierarchy provides for the dynamic escalation and de-escalation of risks between department Project Risk Registers, to an Operational Risk Register and the Corporate Risk Register. All risks are recorded, together with their impacts and controls, and scored, using the 5 x 5 matrix set out in the Risk Management Policy, which was last reviewed and approved by Board on 04 September 2025.

The Executive Risk Management Group (ERMG) is the formal management group created to support the Board manage current and emerging strategic and operational risk. The purpose of the ERMG is to create the functional link between the Board and the operational management teams. The ERMG ensures compliance with our Risk Management Policy and the integration of risk management into our business planning and decision-making processes, supporting the continuous improvement of the organisation. ERMG report their review of risk to all Board Meetings, and all Audit Committee meetings receive an assurance report from the Executive Director of Governance on the efficacy of the Risk Management Policy and operational practices. A summary of these risks can be found in the Advance Northumberland Limited group accounts.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 March 2025.

The results of the company for the year are set out in detail in the Strategic Report.

Ordinary dividends were paid amounting to £200,000. The directors do not recommend payment of a further dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The company's principal financial instruments comprise borrowings. Other financial assets and liabilities, such as traded debtors, trade creditors and group balances, arise directly from the Company's operating activities.

The main risks associated with the Company’s financial assets and liabilities are set out below. Given that a number of the risks below derive from transactions with fellow group undertakings, the Company does not undertake any hedging activity. Significant financial risks from a group perspective are addressed on a case-by-case basis at group level.

Interest rate risk

The majority of debt is inter-company, which allows the Company to manage its interest rate risk.

Price risk

For new acquisition of properties, there is a process to review market information to assess the risk and future rental stream from each property. The board has set criteria to be met in terms of rental yield prior to purchasing new assets.

Credit risk

Management utilise external service organisations to assess credit worthiness of new tenants prior to entering into new agreements.

Liquidity risk

The company aims to manage liquidity risk by having flexible payment options with group undertakings for trading balances.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.

In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

We have audited the financial statements of Advance Northumberland (Housing) Limited (the 'company') for the year ended 31 March 2025 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 March 2025 and of its profit for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

The risk of material misstatement due to error or fraud has been assessed in conjunction with how internal controls may mitigate any such risk. These controls are reviewed as part of the audit by performing systems walkthroughs to ensure they are operating effectively. Analytical review and substantive testing is also performed on all material balances and therefore any instances of non-compliance should be identified or considered as insignificant. In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team;

• obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework, in which the company operates and how the company complies with that legal and regulatory framework

• inquired with management and those charged with governance about their own identification and assessment of the risks of irregularities, including any know actual, suspected or alleged instances of fraud

• discussed with management and those charged with governance any non-compliance with laws and regulations and how fraud might occur including assessments of how and where the financial statements may be susceptible to fraud.

The risk of management override of controls was also considered an area of potential misstatement due to fraud. Audit procedures performed included testing of manual journal entries and other adjustments and evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business.

There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's member in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's member those matters we are required to state to the member in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's member, for our audit work, for this report, or for the opinions we have formed.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

Advance Northumberland (Housing) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Wansbeck Workspace, Rotary Parkway, Ashington, Northumberland, NE63 8QZ.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include investment properties at fair value. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of Advance Northumberland Limited. These consolidated financial statements are available from its registered office, Wansbeck Workspace, Rotary Parkway, Ashington, Northumberland, NE63 8QZ.

The Company’s business activities together with the factors likely to affect its future development, performance and position are set out in the Strategic Report. The Company meets day to day working capital from operating cashflows. The Company’s forecasts and projections, taking account of expected changes to the business and trading environment, show that the company can continue to operate on this basis. Funding for capital investment continues to be available from Northumberland County Council under the terms of the existing loan agreement.true

The Directors have obtained a letter of support from Advance Northumberland Limited confirming that support will be provided as required to allow the Company to meet its liabilities as they fall due for a period of no less than 12 months from the date of signing of these accounts. The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual Financial Statements.

Revenue represents the amount derived from property rental income and sale of property assets and is wholly derived from activities occurring within the UK.

Rental income is recognised on an accrual basis. Disposal of properties are recognised at sales value less legal fees associated with the disposal and these are recognised on legal completion.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The Company capitalises acquisitions based on the following policy:-

• Desktop IT equipment and Software are not capitalised due to their short life span and regular cyclical replacement.

• Fixtures and fittings are capitalised at cost where they provide additional value to the property portfolio offer.

• Vehicles are capitalised at cost.

• Land, Buildings and associated identified investment capital works required at the point of purchase are capitalised at cost, to the extent they add value to the overall fixed asset value and cyclical repairs to maintain current value are financed through profit and loss

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equipment instruments. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Short-term employee benefits (those that fall due wholly within 12 months of the year-end), such as wages and salaries, national insurance, pension contributions, paid annual leave, paid sick leave, bonuses and non-monetary benefits (e.g. cars) for current employees, are recognised as an expense in the year.

Advance Northumberland (Housing) Limited operates a group personal pension, with defined contributions that meet the requirements of auto enrolment. The assets of the scheme are in a fund independent from those of the company. The annual contributions payable are charged to the Statement of Comprehensive Income.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Deferred Grants

Grant income is deferred where performance conditions, which have not yet been met, are attached to income received. As performance conditions are met the income will be released to match the assessed degree of compliance.

Borrowing costs

The Company raises finance through its commercial loan facility with the Group's Ultimate Parent Entity Northumberland County Council. Interest incurred for this facility with regards to fixed assets is accrued to the Statement of Comprehensive Income and interest incurred for this facility with regards to current work in progress is accrued to the project cost.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The actual (credit)/charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

The freehold investment properties were valued at market value on 10 March 2025. The properties were valued by Align Property Partners on the basis of open market value for investment purposes, subject to existing tenancies and leases, but assuming vacant possession. Properties acquired in-year not captured by an external valuation were subject to a Director's valuation based upon an achievable rental value, capitalised at an appropriate rental yield.

Market Value is defined in the RICS Valuation – Professional Standards January 2014 as “The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgably, prudently and without compulsion”.

Align Property Partners did not carry out internal inspections of properties during 2024/25 due to there being no fundamental changes or capital work carried out. Therefore desk top valuations were applied across the Portfolio. Internal inspections were carried out on a sample of void properties which were selected based on a sample of Properties in terms of geographical location, age and type.

In arriving at valuations Align Property Partners made the following assumptions:

a. That all the houses are either freehold or long leaseholds, the unexpired term of which exceeded 20 years, and that no onerous restrictions or outgoings existed.

b. That all the houses meet the required Decent Homes Standard.

c. That all the properties are unaffected by any matters which could be revealed in a local search and replies to the usual enquires or by any statutory notice.

d. That the properties are free from all structural, latent and other defects.

e. That all the Properties have been valued individually and not as part of a portfolio.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

The Company’s immediate parent company is Advance Northumberland Limited. Northumberland County Council is the ultimate controlling party by virtue of its shareholding in Advance Northumberland Limited. Northumberland County Council, a local authority statutorily constituted in England, prepared consolidated group accounts which can be obtained by application to Northumberland County Council, County Hall, Morpeth, Northumberland, NE61 2FF.

Change in accounting policy

During the year ended 31 March 2025, the company reviewed the accounting treatment of government grants previously recognised using the accruals model and instead adopted the performance model to align with the accounting policy of the ultimate parent company.

The conditions of the grant were met in the prior year and therefore a prior period adjustment has been reflected. The grants have been released and the 2024 figure restated, the net effect of the prior year adjustment is profit of £2,609,367 to the statement of comprehensive income.