Decision

Current regulatory judgement: Acis Group Limited (30 August 2023)

Updated 30 August 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Acis Group Limited
• Regulatory code: L4229
• Publication date: 30 August 2023
• Governance grade: G1
• Viability grade: V2
• Reason for publication: Changed basis for viability grade
• Regulatory route: In Depth Assessment

Regulatory judgement

This regulatory judgement confirms our existing assessment of Acis Group Limited’s governance and financial viability grades (G1/V2) following completion of an In Depth Assessment (IDA).

Based on evidence gained from the IDA, the regulator has assurance that Acis Group Limited (Acis) continues to comply with the financial viability elements of the Governance and Financial Viability Standard. Its financial plans are consistent with, and support, its financial strategy. Acis has an adequately funded business plan with sufficient security in place and is forecast to continue to meet its financial covenants.

Acis is increasing its investment in existing homes while continuing to develop new homes. It is reliant on income generated from its sales programme and student housing business to maintain covenant compliance. Headroom against funder covenants remains relatively low. Coupled with the current economic uncertainty in relation to inflation and interest rates, this reduces Acis’ capacity to respond to adverse scenarios, as demonstrated in its own stress testing.

The regulator’s assessment of Acis’ compliance with the governance elements of the Governance and Financial Viability Standard remains unchanged. Based on the evidence gained from the IDA, the regulator has assurance that Acis’ governance arrangements enable it to adequately control the organisation and to continue meeting its objectives.

Other providers included in the judgement

None

About the provider

Origins

Acis was established in 1999. It is a charitable company and is the parent of the group. Its strategic focus is the development and management of affordable, social and student housing.

Registered Entities

Acis is the only registered entity in the group.

Unregistered Entities

Acis has three active unregistered subsidiaries;

• Acis Development Services Limited undertakes development and sales activities for the group;
• Riverside Access and Training provides training services; and
• Community Learning in Partnership provides a variety of learning services.

Geographic Spread and Scale

The majority of Acis’ stock is in the East Midlands, South Humberside and South Yorkshire regions.

Staffing and Turnover

At 31 March 2023, Acis employed 294 full-time equivalent staff and had a turnover of £40.1m.

Development

Acis’ current strategy is to develop an average of 150 new homes per year between 2019 and 2024. The majority of development is for affordable rent.

About our judgements

Key to Grades

Governance:

	Compliant
G1	The provider meets our governance requirements.
G2	The provider meets our governance requirements but needs to improve some aspects of its governance arrangements to support continued compliance.

	Non-compliant
G3	The provider does not meet our governance requirements. There are issues of serious regulatory concern and in agreement with us the provider is working to improve its position.
G4	The provider does not meet our governance requirements. There are issues of serious regulatory concern, and the provider is subject to regulatory intervention or enforcement action.

Viability:

	Compliant
V1	The provider meets our viability requirements and has the financial capacity to deal with a wide range of adverse scenarios.
V2	The provider meets our viability requirements. It has the financial capacity to deal with a reasonable range of adverse scenarios but needs to manage material risks to ensure continued compliance.

	Non-compliant
V3	The provider does not meet our viability requirements. There are issues of serious regulatory concern and, in agreement with us, the provider is working to improve its position.
V4	The provider does not meet our viability requirements. There are issues of serious regulatory concern, and the provider is subject to regulatory intervention or enforcement action.

Note: The use of an asterisk (*) against a grade indicates that the assessment refers to a provider that is designated as being for-profit.

Definitions of Regulatory Routes

In Depth Assessment (IDA): An IDA is a bespoke assessment of a provider’s viability and governance, including its approach to value for money. It involves on-site work and considers in detail a provider’s ability to meet its financial obligations and the effectiveness of its governance structures and processes.

Stability Checks: Based primarily on information supplied through regulatory returns, a Stability Check is an annual review of a provider’s financial position and its latest business plan. The review is focused on determining if there is evidence to indicate a provider’s current judgements merit reconsideration.

Reactive Engagement: Reactive engagement is unplanned work which is triggered by new information or a developing situation which may have implications for a provider’s current regulatory judgement.

Stability Checks and Reactive Engagement: In some cases, we will publish narrative regulatory judgements which combine evidence gained from both Stability Checks and Reactive Engagement.

For further details about these processes, please see Regulating the Standards.