Flagship increases home delivery despite missing surplus target
Flagship Housing Group has reported an increase in completions despite missing its surplus target in the last financial year.
The landlord’s latest accounts for the year to the end of March 2023 show it delivered 750 new homes during the year, an increase of 95.
These were made up of 451 affordable rent, 181 shared ownership, 2 shared equity and 116 open market sale properties.
The 32,000-home association generated £52.8m through the sale of 103 market sale and 152 shared ownership homes.
It also sold additional tranches in 50 existing shared ownership homes that brought in another £5m.
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Flagship’s pre-tax surplus for 2022-23 was £49.2m, £14.8m lower than its original budget, and £10m lower than the previous year.
The landlord said this was the result of a one-off remediation provision and a lower gain on investment properties during the year.
Its operating surplus, after accounting for asset disposals and gains on joint ventures, was £79.6m. This was slightly down on the £83.3m of the previous year, after taking into account a one-off £3.25m provision for remedial works.
Inflationary cost pressure also had an impact on Flagship’s operating margins.
The Norwich-based landlord’s annual turnover increased 7.9% year on year, to £250.2m, and it delivered an operating margin, including gains on disposal, of 31.8%.
Investment in its existing stock increased by £14m to £89m, with the landlord reiterating its commitment to eradicating damp and mould through the introduction of both “shorter-term interventions and longer-term proactive measures”.
Flagship described the year as “tumultuous” due to “rising energy bills, the cost of living crisis, inflation, supply chain disruption and labour shortages”.
But it said it had “navigated the uncertainties and risks with a determined focus” that had resulted in “important decisions to maintain asset investment, reduce outstanding repairs, and deal with damp and mould amidst a challenging economic environment”.
Jonathan McManus, interim chief financial officer at Flagship, said: “Our focus has been on maintaining and improving compliant, high-quality affordable homes despite the challenging economic trading environment. We have continued to deliver a strong set of financial results which underpins our healthy liquidity position.”
As part of its results, the landlord announced that Mr McManus would take on his interim role on a permanent basis at the start of next month.
David McQuade, chief executive of Flagship, said: “After a rigorous selection process, the board is delighted that Jonathan McManus will be assuming the role of CFO. His experience and commitment to our company’s success render him a valuable addition to our executive team.”
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