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Orbit reveals drop in surplus as spend on homes rose by a third
Large Midlands landlord Orbit has reported a drop in its half-year surplus as it spent more on improving existing stock.
The 47,000-home association posted a surplus of £18.7m in the six months to the end of September, compared with £22m in the same period last year.
It came despite Orbit’s turnover rising 4% in the half year to £196m.
In a filing, the landlord revealed it spent £57.7m on improving homes and boosting the energy efficiency in the six months, up by a third on last year’s figure of £43.4m.
Orbit said 86% of its homes now have an Energy Performance Certificate rating of C or higher. It also “extensively refurbished” two independent living schemes.
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Orbit said sales, rental income, voids and sales of fixed assets were all slightly ahead of its budget.
The association recently offloaded 250 homes in Essex and Hertfordshire to B3Living. In July, Legal & General Affordable Homes acquired 390 shared ownership homes from Orbit for nearly £35m.
In its half year, Orbit completed 341 homes compared with 402 handovers in the same period last year. Of the 341 completions, 293 were affordable.
On an operating basis, the landlord’s surplus – including the sale of fixed assets – ticked up sightly to £48.3m.
Jonathan Wallbank, group finance director at Orbit, said: “Orbit remains financially robust with a strong liquidity position, and continues to invest in our homes and services, delivering new affordable homes and providing customers access to services and support.”
Chief executive Phil Andrew added: “While this is a challenging time for the sector, our performance remains strong.”
He added: “Our 2030 strategy and transformation plan will see us reshape how Orbit works, putting in place the right structures, culture and capability, systems, processes and technology. It will create a more resilience operation that is fit for the future and that delivers what our customers expect and deserve from us.”
On Wednesday it was announced that, following a stability check, Orbit had retained its G1/V2 grades for governance and financial viability with the Regulator of Social Housing.
The association has yet to be assessed under the English regulator’s new consumer standards.
In its last full year, Orbit reported a 39% drop in surplus to £54.9m due to lower property sales, higher interest costs and increased spend on tackling damp and mould.
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