You are viewing 1 of your 1 free articles
BPHA reports small loss after £22.7m cost of restructuring legacy banking facilities
Large housing association BPHA has reported a net loss before tax of £1.5m due to £22.7m in exceptional breakage costs from legacy financial agreements.
The 20,000-home landlord revealed the one-off cost for terminating the interest rate swaps in its latest accounts for the year ending in March 2024.
BPHA explained that the multimillion-pound cost was part of a programme to restructure its syndicate banking facilities into a series of bilateral agreements which completed in July 2024.
The landlord said: “The swaps were legacy financial instruments at high interest rates of 10% and their removal will enable a lower interest cost for future years and more financial capacity.”
READ MORE
Julian Pearce, chief financial officer of BPHA, believes the landlord remains in a strong financial position.
He said: “Our new banking facilities provide us the flexibility to grow our development programme. This enabled us to continue to invest in existing homes and provide more affordable homes.”
The East of England landlord’s operating surplus of £56m was broadly the same year on year, as was its investment in existing homes (£39m) and core operating margin at 40%.
Investment in new homes increased by £7m to £60m, which drove an increase of more than 40 new homes built in the previous year, to 267.
First-tranche shared ownership sales were also up to 141, from 103 in 2023. But the margin for this business decreased from 27% to 16% following a £1.3m impairment on shared ownership stock. This arose at two sites which experienced development delays.
In December last year, BPHA reported a 28% drop in its half-year surplus, partly due to a slowdown in shared-ownership staircasing.
In 2024, the development and sales business turnover fell following another reduction in staircasing, which reduced the surplus by £4.4m.
Mr Pearce added: “Our focus remained on listening to customers and making sure they felt safe and comfortable in decent homes with reliable services. Eighty-nine per cent of our homes are now in at least [Energy Performance Certificate] Band C, as we continue to ensure homes are fit and efficient for the future.
“We were also pleased that colleagues again endorsed working at BPHA, with inclusion in the Great Place to Work list.”
Earlier this year, Inside Housing spoke to BPHA about its decision to take on more Section 106 homes as developers approach the landlord with “better value” offers.
Richard Hill, chief executive of BPHA, said it was feeling “a little bit more bullish” on development as economic conditions improved, adding that he was also scaling up the association’s land-led building programme.
He said: “It’s useful that the rent settlement is going to be rolled forward a year and, in the development market, we’re getting offers that represent better value for us than they were a couple of years ago.”
Sign up for our development and finance newsletter
Already have an account? Click here to manage your newsletters
Cable Street’s community legacy
