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Paradigm surplus drops after £5.6m loan breakage cost
Paradigm Housing Group paid £5.6m in breakage costs for the early repayment of a £22m loan as part of a financial restructuring package last year, its annual results have revealed.
The 15,000-home landlord produced a £26.2m surplus in 2017/18, down from the £33.8m of the previous year. The association said this was chiefly due to the one-off breakage cost.
In its financial statement, Paradigm explained that the early repayment “released security worth more than double the value of the loan for alternative borrowings as well as removing some older loan covenants that did not align with those from more recent arrangements”.
Turnover was down from £136.7m to £123.9m, but the group also reduced its operating costs from £81m to £70m.
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Julian Ashby, chair of Paradigm, said: “We have now secured long-term and development financing at very good margins, sufficient to fund the level of development in our corporate plan for the next three years.
“Generating a surplus in this way means that we can look after our existing homes, invest in improving our infrastructure, and maximise the construction of new homes.”
During the year, the South East-based association spent £15.1m on maintaining its existing stock, up from £13.6m the previous year. The increase in maintenance costs reflected “higher spend on fire safety works, particularly in high rise or other high risk blocks”.
It also completed 610 new homes at a cost of £86.3m, with 394 of these available for social or affordable rent.
The homes are part of a development programme targeting 600 new homes a year over three years.
The group’s reinvestment percentage (the proportion it invests in new and existing stock as a percentage of total properties held) rose from 3.2% in 2016/17 to 4.8%.
Housing association financial statements 2017/18
Click on the links below to read more reports about individual associations' financial statements:
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Aster sees 12% jump in surplus despite margin drop
BPHA sees surplus jump after shared ownership sales boost
Clarion's surplus falls for second year running
Housing & Care 21 records increased surplus
Metropolitan sees surplus fall due to post-Grenfell costs
Midland Heart records £47.8m surplus
Network Homes surplus dips for the second consecutive year
Notting Hill and Genesis post reduced combined surplus
Optivo sees turnover fall in first results since merger
Orbit surplus boosted by jump in value of private rented units
Paradigm surplus drops after £5.6m loan breakage cost
Places for People boosts surplus to £130m
Southern sees dip in surplus due to pensions and safety costs
Sovereign boosts surplus thanks to open market sales
Stonewater increases surplus by 38%
Swan surplus slides after £3.2m cladding provision
Vivid posts increased surplus post-Merger
