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Giant landlord sees surplus rise despite £34m impairments
Places for People has reported a 29% jump in post-tax surplus despite booking impairments totalling £34m in the last financial year.
The 230,000-home landlord, whose operations include social housing, retirement schemes and leisure facilities, recorded a post-tax surplus of £91.3m in the year to the end of March 2023, compared with £70.8m the year before.
The overall rise in surplus was helped by net interest costs on debt falling by 39% to £86.7m. However, this was offset by a sharp rise in operating costs to £553.6m.
On an operating basis, Places for People’s surplus fell by 22% to £163.7m, which was partly caused by impairments.
A decision in February to demolish the 132-home Jospeh Rank House block in Harlow, Essex, resulted in an impairment of £18m, the landlord’s annual report revealed.
Separately, impairments on two of the group’s undisclosed partnership investments totalled £16m, as Places for People said the costs are unlikely to be recovered.
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A move to pay the real living wage and support staff through a hardship fund was another factor in the lower operating surplus.
Overall, Places for People’s operating margin fell to 19.2%, down from 24.6% the year before.
Elsewhere, the association revealed that the amount it spent on capital improvements and repairs rose 13% to £151m. This included fire safety measures, new kitchens, bathrooms, windows, boilers and doors.
Writing in its annual report, Greg Reed, chief executive of Places for People, said: “We have acknowledged and are addressing the huge challenge of dealing with the legacy issues of underinvestment that are endemic across the affordable housing sector.”
It comes amid an ongoing focus on social housing standards in the wake of the death of two-year-old Awaab Ishak, a string of media stories on shocking housing conditions, and a growing number of maladministration findings by the Housing Ombudsman.
On fire safety, the landlord revealed it has completed cladding remediation work on 10 of the 19 buildings identified for work. At the time the report was published, four were due for remediation this year and five – based in Scotland – are in the design phases and due for completion in 2025, the group said.
Meanwhile, 23 sprinkler systems were installed on its high-rise buildings over the year. In total, Places for People has 46 buildings that are six storeys or higher.
On development, the association completed 1,326 homes – down around a quarter from 1,775 in the previous financial year. Of the 1,326 total, 925 were classified as affordable, which included 158 shared ownership homes.
Last week, Places for People announced it had launched a strategic land division to grow its long-term pipeline of sites.
The group’s turnover was flat at £849.6m. Just over half of revenue was from affordable housing. Across six companies, Places for People owns or manages 72,621 social or affordable homes.
Nearly a fifth of its revenue – 18% – came from the 98 leisure facilities it operates.
At year-end, Places for People had committed borrowings of £4.1bn, of which £3.4bn is drawn. Gearing remained at 55%.
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