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Guinness cuts annual completions forecast after contractor failure
G15 landlord The Guinness Partnership has reduced its annual completions forecast after delays on two projects due to problems with “contractor insolvency”.
A spokesperson for the 70,000-home landlord told Inside Housing it is now expecting to hand over 792 homes in its current financial year. It was previously targeting 943 completions.
“We have revised our forecast down… due to known delays with two projects as a result of contractor insolvency,” the spokesperson said.
The problem of contractors going bust continues to affect the sector, adding to wider issues around rising development costs.
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However if Guinness hits its revised target, it will be above the 608 homes it completed in its last full financial year. The group’s original target last year was 1,005.
In its half year to date, covering the six months to the end of September, Guinness completed 567 homes. Of these, 497 were classed as “affordable” tenures.
The group is ahead of last year’s half year total of 359, but the spokesperson said this was due to the “timing” of its development programme.
Guinness started 347 homes in its most recent half year, which was 137 more starts than in the same period last year.
The group’s total half-year surplus fell by a fifth to £16.4m, which Guinness said was due to higher borrowing costs. On an operating basis, its surplus rose to £55.1m, up from £50m the year before.
The landlord currently has a G1/V2 rating with the regulator.
In a filing, Guinness said: “Whilst the operating environment for registered providers remains challenging, The Guinness Partnership remains financially resilient and continues to deliver effective core services and additional support to our tenants.”
The group’s half-year results in 2023 did not include the finances of Shepherds Bush Housing Association (SBHA), which it took on as a subsidiary nearly a year ago.
The dent to Guinness’ bottom line came despite the group reporting a 17% increase in turnover to £261m.
In the latest six-month period, the London-based landlord revealed that it spent £99m on repairs and maintenance. This compared to £77m in the same period last year, which did not include SBHA.
In the six months, as a standalone entity SBHA recored a surplus of £0.9m on turnover of £23.5m, with an operating margin of 5.2%.
All SBHA’s loan covenants for the period have been met, Guinness reported.
SBHA was downgraded to G3 for governance by the English regulator in June 2022 and retained its V2 status.
At the time, the regulator said it had identified issues that allowed SBHA to come “within weeks of a potential loan covenant breach”.
In its last reported full year to March 2024, SBHA recorded a £2.8m deficit on turnover of £49.2m.
The associations are aiming to complete a full transfer of engagements from SBHA to Guinness next April, the latest filing said.
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