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Quarterly investment in existing homes rockets more than 145% at Platform
Platform increased its investment in existing homes by 148% in the first quarter of this year, as the landlord continues to invest in the quality and energy efficiency of its homes.
The planned increase impacted the housing association’s EBITDA MRI interest cover, it said, which fell by 49 percentage points to 168% compared to Q1 2023.
Platform said that its overall interest cover was still “well positioned for the sector” and above its target minimum of 120%.
“Whilst investment in the quality and energy standards of existing homes is up, the profile of the spend will increase as the year proceeds and our year-end expectations on margins is comparable to last year,” said Elizabeth Froude, chief executive of Platform.
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Shared ownership sales in the quarter to 30 June 2024 almost doubled, increasing from £6.6m to £13m.
Jessica Friend, group corporate finance director at Platform, told Inside Housing this confirmed the landlord’s expectation that the unsold shared ownership homes it reported in its 2023-24 results would be sold in the coming months.
A number of these homes were ‘stock plots’ acquired from developers, for which there is no pre-completion marketing time.
“Year on year, the main differences to our trading are starting with an earlier pipeline of sales reservations, putting sales ahead of where they were last year,” Ms Froude said.
“In our areas of operation, demand for affordable homeownership remains strong, which is reflected in the prices and margins being achieved.”
The shared ownership sales helped to drive an uptick in total turnover for the quarter, which rose by 14.8% to £92.3m.
Growth in social housing lettings turnover due to rent increases and a rise in the number of homes also contributed, increasing by 7.7% to £73.8m.
The share of turnover from social housing lettings decreased slightly, however, falling 5.2 percentage points to 80%.
Operating surpluses excluding fixed asset sales rose by 16.8% to £24.3m, while surplus from social housing lettings increased by 14.2% to £24.2m.
Its overall net surplus after tax also increased, rising to £12.2m compared to £10.8m last year. The 50,000-home landlord added that this figure was “net of an increase in net interest of £2.3m” arising from its £250m sustainable bond issue in April 2024.
Platform’s operating margin excluding fixed asset sales remained broadly the same, at 26.3%, compared to 25.9% in Q1 last year.
The housing association also completed 244 new homes in the quarter, marking a slight decrease compared to 289 completions last year.
In August, Platform reported a drop in its net surplus after tax for 2023-24 due to a number of one-off costs.
The landlord had previously revealed that it had achieved the highest number of starts it had ever recorded in a single financial year, with starts on 1,534 homes for 2023-24, and 1,202 completions.
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