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NHG reports ‘progress’ as surplus more than doubles in half-year update
Notting Hill Genesis (NHG) has posted a 104% increase in its surplus for the six months to 30 September 2024, thanks to cost control and boosted sales.
The large London landlord reported a £37.4m surplus after tax in its latest trading update, which saw turnover increase by 9.8% to £363.1m.
NHG said this was in part down to “inflationary rent increases and two bulk sales”.
While the association’s cost of sales increased by 152% to £27.2m, its operating costs remained flat, resulting in operating surplus jumping by 29% to £100.7m.
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Its operating surplus was also bolstered by maintaining the number of shared owners staircasing, which led to an increase in its surplus on sale of fixed assets from £11m last year to £15.2m.
NHG’s operating margin for social housing lettings was significantly improved compared with its half-year results last year, rising from 9.7% to 22.7%.
Its overall operating margin also increased by 4.3 percentage points to 27.7%.
The update follows a challenging time for the landlord. It was recently forced to temporarily suspend trading for five of its bonds – totalling £1.55bn in borrowing – after it filed its audited annual accounts late.
The association later resumed trading. Its overdue accounts revealed an increased deficit of £90m for 2023-24.
This marked an increase of £8m on the £82m deficit it expected in June, due to “building safety liabilities and asset impairments” of £110m and lower sales figures.
“The economic environment remained challenging in the first half of 2024-25, but we have made solid financial and operational progress,” NHG said in the latest trading update.
The landlord said it has “substantial liquidity”, continues to have “good relationships with our principal lenders” and is “ready and able to access the capital market, as necessary”.
Patrick Franco, chief executive of NHG, said: “We have made a solid start to the year, with the organisation progressing both strategically and financially.
“Good cost control helped drive growth in operating surplus, and the operational changes and investment we have made in the last 12 months are beginning to deliver results.”
Mr Franco added that while the government’s announcements in this week’s Budget showed “some progress” towards Labour’s housebuilding goals, “further urgent action is needed”.
“Housing associations like Notting Hill Genesis are eager to play a role in solving the housing crisis, but our ability to do so hinges on stronger support and investment from the government,” he said.
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