YEAR IN REVIEW2016-17

CHAIRMAN’S REPORT ANTHONY DI MARCO

It is my pleasure to present to you Horizon Housing’s 2016-2017 Year in Review. This year continued a trend of sustainable growth for the organisation, whilst developing a platform from which to rapidly grow and capitalise on upcoming opportunities.

Despite the continuation of an uncertain political sphere, Horizon Housing has had a strong financial year, growing our asset base and developing new homes for people with housing needs.

We have strengthened our investment into Australian Affordable Housing Securities, developed new homes in northern New South Wales and consolidated our services in the Maranoa and Western Downs regions. You will read about these and many other achievements over the past twelve months on the following pages.

From this strong foundation, we have developed a new strategic plan to see us through until 2020. I look forward to seeing Horizon Housing achieve our targets over the coming three years.

I would like to thank our retiring Directors, Karen Wing, Brendon Hulcombe and Sally Edwards; their leadership and wisdom has been invaluable in driving the achievements of the organisation.

Finally, I would like to also thank Jason our CEO, the management team and staff of Horizon for a successful 2016-2017.

CEO’S REPORT JASON CUBIT

At Horizon Housing, our focus has and always will be on our tenants, staff and owners. This financial year has seen us broaden and improve our services to all groups thanks to our tenant engagement activities under Your Home, Your Place; our staff engagement and training activities; and our continual improvement in processes and procedures.

I’d like to thank our Board for their wisdom and guidance and our management team and staff for their hard work throughout the past year. I’d also like to thank our tenants and other stakeholders for their support. With their continued achievements and support, the coming financial year looks to be an exciting one for Horizon Housing, with further opportunities in New Zealand, New South Wales and Queensland occupying our future growth plans.

It is of note that there has been an increase in the public awareness and discourse around housing affordability and homelessness, which will hopefully drive some meaningful change in policy. Regardless of the outcomes of this debate, Horizon Housing is already working on the solutions for tomorrow’s housing needs.

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CHAIRMAN AND CEO REPORT

YEAR AT A GLANCE

1Tenancies sustained with formal support packages 2Overall tenant satisfaction 3Built, sold, or underway

PARTNERS IN RECOVERYAs part of our commitment to ensuring tenants have access to the support services they need, Horizon Housing and Partners in Recovery Gold Coast created a new initiative to make In Service Support available for our tenants.

Commencing late September 2016, Partners in Recovery Gold Coast had a weekly co-location of staff at the Horizon Housing office in Robina.

Who are Partners in Recovery Gold Coast?Partners in Recovery (PIR) assist clients to navigate the mental health system. There are many agencies and programs each offering different support, and trying to find the right resources and services to suit individual circumstances can often be difficult.

PIR Gold Coast works alongside individuals with persistent mental illness or mental health concerns who require assistance from multiple agencies.

PIR Gold Coast supports clients throughout their journey by:

• Assisting them to learn how to navigate the system;• Helping them to identify and connect to the services

that are right for their individual needs; • Supporting clients to build on their own strengths

and natural resources; and • Assisting clients with practical things like housing

and health needs.

PIR Gold Coast asigns a facilitator to a client who will take the time to understand and assist them throughout their recovery journey.

Working together with Horizon Housing’s Support Coordinator, the aim is to provide assistance for consenting tenants who may require PIR support when experiencing difficulties sustaining their tenancies. Horizon are expanding this service with our partners FSG.

HOMES PROVIDED

MAINTENANCE SPENDING

2,407

$3,027,608

5,430

32,855

96

43,469

95.77%

22

16,488

1,114

TENANTS ASSISTED

EMAIL ENQUIRIES RECEIVED

TENANCIES SUSTAINED1

CALLS ANSWERED

TENANT SATISFACTION 2

ADDITIONAL HOMES 3

WORK ORDERS[Maintenance Tasks]

TENANT ENGAGEMENT PARTICIPANTS

+?

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Your Home, Your PlaceHorizon Housing adopts a placemaking approach to the work we do with our tenants and communities. Our three-year plan guided and informed activities to build sustainable outcomes that included:

Horizon Housing is currently developing our second Your Home, Your Place three-year plan, launching late 2017.

Valued Tenant Raffle

Introducing a monthly Valued Tenant Raffle in March 2017 to reward our tenants for keeping their properties in good condition, paying rent on time, or for neighbourhood participation. The draw is held at the end of each month and three lucky tenants win a $50 gift voucher for being a valued tenant.

Community

Participating in community-based activities in Roma and the Gold Coast including Harmony Day, NAIDOC Week and Gold Coast Homeless Connect event.

Welcome Kits

An audit and update of our Tenant Welcome Kits to include locally relevant information, details of services available in the community, and welcoming essentials, such as bottles of water, tea and coffee sachets, toilet paper, and pens.

Bright Sparks

Organising Bright Sparks information sessions for clients in partnership with Queenslanders with Disability Network (QDN) educating tenants about energy efficiency. The program is designed and led by people with disability, teaching tenants about the electricity market and how to understand and reduce their power bills.

Christmas Hamper

Hosting a Christmas Hamper Competition which was jointly funded by our property owners and Horizon Housing. Tenants whose rental payments were three weeks in advance were entered into the draw to win one of forty Christmas Hampers valued at $65. The project reduced arrans and provided tenants with much-needed help over the expensive Christmas period.

Poetry & Short Story Competition

Presenting the inaugural Poetry and Short Story Competition and producing Stories of Home in collaboration with Queensland Writers Centre – a compilation of selected entries from the competition.

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TENANT ENGAGEMENT

The Reserve at Hundred HillsOctober 2017 will see the completion of The Reserve at Hundred Hills, Horizon Housing’s first discounted home-ownership project. The mixed-tenure project, supported by the Commonwealth Government and the Tweed Shire Council, provides 22 affordable rental homes and 30 discounted home-ownership properties within a larger 300 home community in Murwillumbah. With the homes completed to date, this project has already brought much needed home ownership and affordable rental stock to the Tweed.

Horizon Real Estate2018 will see the launch of Horizon Housing’s new subsidiary, a licenced real estate agency. Leveraging off our existing client base and experience in property management, the agency will offer landlords a high-quality service and access to a dynamic sales team should the time come to sell their investment. Being linked to a philanthropic group, the agency will have additional products available to investors which could provide tax advantages when providing affordable housing.

Staff DevelopmentHorizon Housing are always finding ways to improve and expand the skills and commitment of our staff. Across our team, engagement levels are at their highest since 2011 (92% satisfaction and 88% willingness to recommend employment). Our team have told us the main reason we come to work each day is “We positively impact people’s lives”. To reinforce this the Horizon Leadership program concentrated on the promotion of the great work our team do on a daily basis. This combined with the introduction of a new performance capability framework means our team is flourishing.

In the CommunityHorizon Housing are committed to the continuous investment in both the wellbeing and education of our staff. We are proud of our team’s dedication and support of people in our community, often going above and beyond by assisting with multiple community events, including the Gold Coast Homeless Connect, Harmony Day in Roma, NAIDOC Week, and the Cancer Council’s Relay for Life which raises vital funds for research, prevention and support services.

VALUING OUR STAFF

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FUTURE PROJECTSPLANS FOR 2017-18

Case Study 1 Horizon assisted Brad* to move from the Gold Coast to the Maranoa region. Brad had previously been incarcerated for a long time and had a history of addiction. Initially, he struggled to cope with the change and his mental health suffered. However Horizon kept in contact, providing regular encouragement and assisted Brad by linking him to support services. Brad was regularly paying rent and maintaining his home extremely well. Brad continued to go from strength to strength, attending counselling sessions, TAFE to improve his numeracy and literacy ability, secured a local job and was the first ever tenant to attend an interagency support services meeting.

Brad shared his story about growing with the help of the community agencies. He hopes to assist others by using his experience to become a mentor and community worker. Brad has been connected to the Queensland Department of Education and Training as well as employment agencies to assist him to gain the relevant qualifications for his future goals.

Case Study 2As a single dad with two young daughters, Jared* knows all about hard times. Having lost their home and all their possessions in the recent flood, they were then faced with the challenge of entering the private rental market along with many other families in the area. Jared* came to a Horizon open home along with close to 100 other interested applicants, already anxious that he would be disadvantaged by being a single father. This wasn’t a concern for Horizon, and his application was successful. At his first routine inspection, the home was immaculately clean and the lawns and gardens were well manicured. Jared has been recognised as one of our most deserving tenants for our Valued Tenant Draw.

*Names changed to protect tenant’s privacy.

ScholarshipsHorizon Housing also secured $10,000 from Arrow Energy to expand the Achieve Scholarships in the Western Downs.

AHI AwardHorizon Housing won the 2017 AHI Leading Innovation Award (Queensland) in recognition of the landmark AAHS Investment bringing together Horizon Housing, Hesta and Social Ventures Australia.

Maranoa contract extension The Department of Housing and Public Works have extended their contract with Horizon Housing. The extension will see Horizon Housing continue to manage their long term social housing stock in the Maranoa region for another three years.

10 Year AnniversaryHorizon Housing celebrated the 10-year anniversary of the merger between Gold Coast Vision Housing and Gold Coast Housing Association in November 2016.

FundingHorizon Housing secured $5,000 in funding from Australia Post to introduce Horizon’s Be Ready, Be Prepared register.

Leadership AwardsHorizon Housing’s Group Company Secretary, Samantha Evans, is the inaugural National winner of the 2017 UDIA National and Frasers Property Women in Leadership Award for Excellence.

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QUICK BITES/HIGHLIGHTS

TENANT STORIES

Financial PerformanceDuring the year under review, Horizon Housing Group’s operations continued to grow with operating revenue totalling $16.8 million, an effective growth of $2 million, or 14%, from the previous year. Capital grant funding received during the 2016/2017 financial year totalled $2.5 million resulting in a total revenue figure of $19.3 million. Total surplus for the year amounted to $1.5 million before tax, with depreciation and amortisation expenses amounting to $4.5 million. Gearing levels have remained relatively unchanged from the previous year.

Consolidated Income Statement 2016 - 17 $

Total income (including capital grants) 19,323,212 Earnings before tax, depreciation and amortisation 4,535,917 Tax, depreciation and amortisation expense (3,081,339)Consolidated profit for the year 1,454,578

Consolidated Balance Sheet 2016 - 17 $

ASSETSTotal Current Assets 7,995,114 Total Non-current Assets 108,673,695 TOTAL ASSETS 116,668,809

LIABILITIESTotal Current Liabilities 3,636,888 Total Non-current Liabilities 9,538,478 TOTAL LIABILITIES 13,175,366

CONSOLIDATED NET ASSETS 103,493,443

Portfolio GrowthDuring the financial year the Western Downs Regional council, as sole shareholder of the Western Downs Housing Trust, resolved to approve an offer from Horizon Housing Company to accept transfer of the assets of the Trust in order to continue the provision of public charitable benefits in place of the trustee.

Business CombinationsOn 3 December 2015, Horizon Housing Company Ltd (Parent) acquired a 52% shareholding in Australia Affordable Housing Securities Ltd (AAHS), a public company performing compliance management for investors within the National Rental Affordability Scheme. On the 29 June 2017, the Parent company acquired the remaining 48% shareholding in AAHS effectively assuming 100% control.

Horizon Housings’ consolidated financial statements includes the results of Horizon Housing Solutions Limited and Australian Affordable Housing Securities Limited (both wholly owned subsidiaries). The group financial statements have been independently audited by Crowe Horwath and a full copy of the annual report is available upon request or alternatively at www.horizonhousing.com.au.

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KEY FINANCIALRESULTS

Horizon Housing Group - Total Asset Value

$120,000

$115,000

$100,000

$105,000

$110,000

$90,000

$95,000

$100,896 $102,443

$116,620 $116,669

13/14 14/15 15/16 16/17

$,00

0

YEAR

Horizon Housing Group - Net Equity Value

$106,000$104,000

$100,000$102,000

$88,000$90,000$92,000$94,000$96,000$98,000

$93,774 $94,700

$102,580 $103,493

13/14 14/15 15/16 16/17

$,00

0

YEAR

$18,000$16,000

$12,000$14,000

$-

$2,000$4,000$6,000$8,000

$10,000

$12,432 $13,531 $14,326$16,778

13/14 14/15 15/16 16/17

$,00

0

YEAR

Horizon Housing Group - Operating Revenue Growth

Horizon Housing Group - Debt Ratio (Debt/assets)

45%50%

40%

30%35%

0%5%

10%15%20%25%

6.8% 7.2% 8.6% 9.0%

NRS Maximum Benchmark

13/14 14/15 15/16 16/17

YEAR

T 1300 133 027

E hhc@horizonhousing.com.au

W www.horizonhousing.com.au

Robina Suite 101, Level 1, Campus Alpha2 Investigator DriveRobina QLD 4226

Office locationsContact us

Roma 42A Wyndham StreetRoma QLD 4455

Townsville City

Bundaberg Region

Gympie

Maranoa Region

Toowoomba Region

Gold Coast CityTweed Region

Scenic Rim Region

Ipswich CityWestern Downs

Logan City

Redland City

Brisbane City

Moreton Bay RegionRoma

Robina

PartnersWe would also like to acknowledge the following organisations who have contributed to the successes enjoyed over the past year:

ShareholdersWe would like to acknowledge the support of our shareholders:

Foundation Shareholder Group

Gold Coast Housing Association