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Longhurst attributes higher operating costs to COVID-19 and Brexit
Longhurst Group’s chief financial officer (CFO) has said the housing association’s operating costs are expected to stay higher for at least six more months as it handles a backlog of repairs, due to both the pandemic and Brexit.
The housing provider reported a flat operating surplus of £21m in its half-year report, despite growing revenues by 13.8% to £82m.
The trading update from the 24,000-home housing association (HA) for the six months to 30 September showed that operating costs rose slightly from £44m to £49m, with cost of sales rising by 50%, from £8m to £12m, compared with the same period last year.
Operating surplus stood at 26%, down from 29%, with net surplus growing slightly to 10%, up from 9% in 2020.
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Commenting on the results, Rob Griffiths, deputy chief executive and CFO at Longhurst, said: “We continue to see some COVID-related impact on performance across our care and support business, with increased staffing costs and lower income due to voids on some of our services.
“Our short-term expectation, for the next six months, is that our core social housing operating costs will be higher than forecast, as we address a backlog of repairs to our properties.
“The backlog has materialised due to a combination of the pandemic and Brexit, and we have needed to address an interim impact of performance from our repairs contractor, with shortages of both labour and materials cited.”
Last week, Inside Housing revealed that Longhurst Group had signed a 10-year lease agreement with private investment firm Man Group to manage 95 homes at Alconbury Weald in Cambridgeshire.
The comments by Longhurst come a week after a survey of Welsh landlords found that 90% had been hit by supply chain issues in their housing or maintenance programmes.
Supply chain and COVID-19 issues also affected Sovereign Housing’s latest results, with the HA stating that shortages have led to Sovereign delivering just over half of the homes it expected in the six months to 30 September.
The HA completed 458 homes in the first half of 2021-22, which is 53% of the 857 homes it budgeted for. Sovereign has a total development pipeline of 7,175 homes.
In the trading update, the association said that completions were affected by “the COVID variant, resource and material shortages”.
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