Aster’s surplus rises as it eyes land acquisitions

News28.08.192.30 PM by James Wilmore

Aster Group has reported an 11% jump in annual post-tax surplus and is looking to build more new homes on the land it can buy.

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The 30,000-home landlord, which owns and operates properties across South and South West England, revealed that post-tax surplus in the year to March hit £55.4m, compared with £49.7m the prior year.

Group revenue in the period rose 4% to £211.9m, boosted by a 17% increase in first tranche shared ownership sales. It comes as the government today unveiled plans to encourage more people to take up shared ownership.

The group’s operating margin increased to 36.3%, compared with 35.1% last year. However, Aster’s margin for social housing slid to 33%, from 35.2% the prior year.

The group, which subsidiaries include Synergy Housing, reported that rent arrears were 2.3% compared with 2.2% last year.

Aster’s annual report also revealed that turnover from social housing was flat at £162m. This came despite a 1% rent reduction and the group’s exit from some of its care and support services, the organisation said. The group spent an extra £5.3m on “maintenance and major works” on its social housing stock.

During the year, Aster completed 1,156 homes, including 156 for social rent, 444 for affordable rent, 453 for shared ownership and 103 for private sale.

It plans to build 1,100 new homes in the current financial year.

In his annual report statement, Bjorn Howard, chief executive at Aster, said: “A key driver for the group is to increase the number of homes delivered on land it owns or acquires.

“This will give the group greater control over the quality and timing of delivery.”

Aster has acquired land that it expects will deliver around 238 homes over the next few years, Mr Howard added.

Last December, Aster had its credit outlook downgraded by Standard & Poor’s over fears of its increased exposure to open market sales, reducing its ability to deal with “external risks”. However it retained an overall ‘A+’ rating from the agency.

In its annual report, Andrew Jackson, chair at Aster, said against the backdrop of Brexit and “prevailing uncertainty”, the group operates a “prudent, diversified business structure that generates revenue from multiple sources”.

Net debt in the group’s last financial year rose from £765m to £828m, which led to a rise in its gearing ratio.

Aster said: “The small increase in the group’s gearing ratio reflects the increase in net debt of £63m to £828m being proportionally greater than the increase in the total value of social housing assets held.”