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Pre-tax surplus at Home Group tops more than £26m
North East landlord Home Group has reported a 59% rise in its pre-tax surplus for the nine months to the end of December 2023.
The Newcastle-based housing association reached £26.2m in pre-tax surplus versus £16.5m in the previous period.
Turnover grew from £342m to £369m. Liquidity also increased, rising £17m to £342m for the first nine months of the last financial year, Home Group said.
Its operating margin for social housing lettings rose from 16.1% to 21.5% in the nine months. The association’s overall operating surplus rose from £46.7m to £62m.
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A spokesperson for Home Group told Inside Housing that while the results showed an increase in performance compared with the same period last year, the landlord expects to finish the full year “close to budget due to spend on maintenance and building safety works being skewed towards Q4”.
The results showed “considerable covenant headroom” and “clear golden rules”, Home Group said, with gearing remaining largely the same at 50.3%, down from 51.6%.
Its interest cover ratio improved, rising from 213% to 234%. Net debt stood at £1.2m, representing a slight increase on the previous period from £1.15m.
Home Group said it had handed over 890 new build homes, marking an increase of 23 homes on the previous period.
Build completions were “slightly behind expectation due to site-specific challenges, including supply chain challenges, utilities delays and statutory approvals”, it said.
In the nine-month period, 552 social and affordable rent homes were handed over, compared with 429 in the previous period.
There was a drop in the number of affordable homes handed over for ownership, decreasing from 123 to 71, as well as a downturn in the number of outright sales from 181 to 84.
Home Group said 59% of its development pipeline is designated as affordable, with two-thirds to be rented and one-third earmarked for shared ownership.
Sale completions were down slightly for affordable homes, dropping from 134 in the previous period to 103. Outright sale completions reduced slightly from 122 to 119, while joint ventures increased from 132 to 146.
The number of unsold homes dropped 51%, from 128 to 63.
The landlord has 56,200 homes across England and Scotland, with more than 50% in the North of England.
In January 2023, Home Group posted mixed half-year financial results against a backdrop of concern about the economy, rising interest rates, energy prices and high levels of inflation.
It faced a financial viability downgrade in November 2022, being regraded from V1 to V2.
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