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Large London landlord reports 60% drop in half-year surplus
Metropolitan Thames Valley Housing (MTVH) saw its first-half surplus fall by 60% as operating costs rose and surplus from selling fixed assets dropped.
The 57,000-home association posted a total surplus of £14m for the six months to 30 September, compared with £35m in the same period last year.
The fall came despite turnover increasing by 9% to £227m year on year, which was helped by an increase in rents.
On an operating basis, MTVH’s half-year surplus fell to £61m, down from £75m in the first half of 2023-24. The landlord said this reflected a £20m lower surplus from fixed asset disposals.
MTVH made £7.8m in the first half from selling fixed assets, compared with £26.4m in the same period last year.
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The landlord said it made two bulk disposals in the first half of last year, which together raised a surplus of £18m.
MTVH’s bottom line was also affected by operating costs increasing by £13.6m year on year to £163.1m. This was due to due to higher spending on salaries, utilities and managing agents.
The association’s operating margin fell to 27%, down from 36% in the first half (H1) of last year.
In total, the G15 landlord sold 147 new homes in the six-month period, up from 116 in the first half of last year. It completed 236 new homes, down from 293 in H1 2023-24.
MTVH said it was on track to develop 569 new homes in the full year through partnership projects.
The landlord invested £20m in existing homes during the first half of the year, up from £16m in H1 2023-24. Fire safety spend also rose slightly to £8m, up from £6m in the first half of last year.
MTVH currently has £675m of available liquidity, down from £846m in March 2024.
Around a year ago, S&P raised its outlook for MTVH from negative to stable, while retaining its A- credit rating.
However in September this year, Fitch Ratings lowered its long-term issuer default rating on the landlord from A to A- due to what it said were MTVH’s “worsening financial leverage metrics”.
In its last full-year, the association reported a deficit of £80m due to fire safety provisions and the write-down of decommissioned high-rise blocks.
Mel Barrett joined MTVH at its new chief executive in September, replacing long-serving boss Geeta Nanda.
Mr Barrett said the half-year results reflected “our resilient business model and strong balance sheet”.
He added: “We will also invest a record amount this year in new developments, to help build the new affordable homes that the country badly needs.”
Mr Barrett welcomed the social rent settlement of Consumer Price Index plus 1% confirmed in the Budget. He urged the government to “increase direct revenue funding at the Spring Spending Review to allow our sector to support its homebuilding plans”.
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