Growing stronger together in the new decade. Business Review including the Summary Financial Statement For the year ended 3 February 2020 and notice of the 161st Annual General Meeting Contents 3 Contents 4 Chairman’s Statement 5 Chief Executive’s Review 6 Strategic Report 16 Charity and Community Support 23 Our Member Journeys 24 Summary Financial Statement 29 Independent Auditor’s Statement 30 Directors’ Remuneration Report 32 Our Directors 35 Notice of Annual General Meeting 35 Voting Conditions 4 Chairman’s Statement Chief Executive’s Review 5 During 2019, we have been celebrating the 160th anniversary I am pleased to report that we have once again delivered on Chairman’s of the founding of our Society. Chief our mission to make a difference to the lives of our Members Statement Executive’s and the local community. This was an important milestone however remain committed to the Review Savings, mortgage balances, assets enhance our Member experience. for us and demonstrated the fantastic face-to-face service we and capital are all at record levels. This investment will continue importance of maintaining mutuality offer through our branch network. I am delighted to report yet another throughout the coming year and in the financial sector as we offer As always, I remain extremely proud strong business performance with we have exciting plans to improve a different approach compared of the team we have at Chorley healthy levels of profitability and our digital capability as we strive It“ gives me great to other financial institutions. As and their knowledge, experience Throughout“ 2019, we an increase in assets and reserves to meet the changing needs of our a mutual organisation you, the and effort ensures that business underpinned by high Member Members. pleasure to report Member, are not only a customer performance continues to exceed worked hard to provide satisfaction levels. A summary of a truly remarkable but an owner of the Society. This expectations. security and value to key financial performance indicators Uncertainty around the UK’s means that as a Board our focus is is detailed in the Strategic Report on economic position following the year with record not to maximise profit, but instead During the year Joanna Hall was all our Members as we page 6. exit from the EU will remain and levels of lending, maximise the benefits to you. We appointed to the Board as a Non- balanced the needs competition in our core markets of do this by providing Members with Executive Director. Joanna has a Despite prolonged political and savings and mortgages is expected overall growth in our a trusted and safe home for their depth of knowledge and experience of both savers and economic uncertainty throughout to increase. We are also closely membership, high money and a fair return, whilst in digital communication and borrowers through the year, we were able to continue monitoring the situation in regard lending these savings to mortgage marketing and further strengthens to attract savings balances and to COVID-19, the Coronavirus. Member satisfaction Members, who in turn pay a fair your Board of Directors by bringing a range of activities, achieved record levels of mortgage We continue to follow the latest levels and continued price for that money, all whilst key skills to help drive this whilst focusing on lending. As well as lending on Government advice and as investing in our local communities. important part of our strategy. standard residential cases, we also events develop we will respond community support. You can expect that your Society will: supporting good causes focused on lending to borrowers accordingly. The safety and well- At the time of writing we are with non-standard needs where being of our employees, Members • provide you with a safe place for dealing with a very difficult situation in the local area. an automated mainstream lender and their families is the highest your money in relation to the Coronavirus may have been unable to help. priority as we navigate through this (COVID-19) which is constantly We continued to support first period of concern and uncertainty. • provide you with a personal changing and evolving. We are time buyers, buyers in the local Notwithstanding this, we are very service, delivered by a real person continuing to monitor and respond area with a smaller deposit, Buy- well placed to continue to act crafted to meet your needs, be it to Government advice and our to-Let landlords as well as those in the long term interests of our our savings team in Branch, via the priority is to protect the health and building their own homes and those Members. I am confident that our phone or post, online or through safety of our staff, Members and borrowing later in life. mutual business model and focus our individual underwriting of each community as much as possible, on delivering real Member value will mortgage case whilst maintaining services I was particularly proud that enable the Society to continue its to our savers, borrowers and both our Members and brokers • support our local community success and make a difference to business partners. These accounts who submit mortgage cases to the lives of our Members and the It’s our aim to continue to be here demonstrate that your Society us recognised and valued the local community. for our Members and to help people is responding from a position of exemplary levels of service provided achieve their aim of owning a house financial strength in terms of capital by the Society. Our average Member I would like to thank all of our and saving for the future. (retained profits) and liquidity (cash) satisfaction score was 96% and we Members for your support reserves. were delighted to be awarded a 4 throughout the year and our I said last year that we were keen to star Broker Satisfaction Rating from staff for their continued hear from Members as to how we Conclusion Smart Money People. commitment and dedication. could better meet your needs and I am proud to be your Chair of the I have no doubt that our continued I am delighted that during the year Board and to serve the Society. we partnered with Smart Money success is attributable to our focus Stephen Penlington As a Board, we are mindful that on providing Member value. This Chief Executive People. Smart Money People is mortgage market conditions the UK’s leading review and insight is achieved through an attractive remain challenging in 2020 with range of savings and mortgage 27 March 2020 platform focused on financial competition and new entrants to services and we have used this products, combined with excellent the mortgage market squeezing service levels, delivered by highly tool to capture a wealth of valuable operating margins. Nevertheless, feedback from our Members trained staff. Our employees are your Society remains secure and passionate about the Society and throughout the year. The Board pay strong and is focused on delivering particular attention to this feedback proud of our traditional mutual benefits to you, our Members, both values and commitment to and it has a real influence in driving now and in the future. improvements in our service. We are supporting our local community. focused on continuing to improve During the year we continued to our online services, as we recognise John Sandford invest in our teams as well as our that the way our Members want Chairman systems and technology to support to interact with us is changing, 27 March 2020 our future growth ambitions and to 6 Strategic Report 7 Our Vision To be the provider of choice for savings and residential mortgages whilst Strategic remaining true to our mutual values. Report • Security and Stability Our Values • Trust • Investment in our People and in our Systems • Customer Service Employee Values, Behaviours and Conduct B R I T E Be the Best Every Member Respect Integrity Teamwork we can be counts Key Highlights of the Year Total Assets Mortgage balances Net profit Savings balances Capital increased by increased by increased by increased to 11.9% 11.2% £0.81m 9.8% £20.3m (2019: 2.2%) (2019: 7.6%) (2019: £0.87m) (2019: 2.5%) (2019: £19.5m) 8 Strategic Report Strategic Report 9 Strategic Purpose and Strategy Business Review The principal purpose of the Society is that of making loans that are This has been an excellent year for the Society with another good set of results. The main Key Performance Report secured primarily on residential property which are funded substantially by Indicators which are used by the Board to monitor the performance of the Society are detailed below: its Members. Remaining safe 2020 2019 The Society’s vision is ‘to be the provider of choice for savings and residential mortgages whilst remaining true to our mutual values’. This is underpinned Total assets £266.5m £238.1m by our mission statement ‘to make a difference to the lives of our Members Total asset growth 11.9% 2.2% and the local community’. Profit after taxation £0.81m £0.87m £16M The Society’s overarching goal is to offer a unique and individual Net interest margin 1.8% 1.9% £20.4propositionM whereby as a Member you are: Management expenses as a percentage of mean total assets 1.5% 1.5% Total number of Total amount lent Total amount of money mortages issued to our customers saved by our customers Gross mortgage lending £59.0m £46.6m Net mortgage balances £213.2m £191.8m Mortgage asset growth 11.2% 7.6% 123 Shares and deposit balances £236.1m £215.0m Capital £20.3m £19.5m £174K Gross capital as a percentage of shares and borrowings 8.3% 8.9% Total