Specialist women’s housing association targets financial improvement after results show negative interest cover

By comparison, the G320 benchmarking figure for landlords with fewer than 1,000 homes shows a median EBITDA-MRI figure of 356.4% – meaning they are earning 3.5 times the interest due. 

Housing for Women said it continued to work within its board’s policy to keep rents at affordable social levels, which drove a lower operating margin when compared with its peers.

Overall turnover for the same financial period fell slightly to £7.88m. 

The landlord secured £10m in funding in January this year, with a fixed rate until 2047. This will increase its interest burden, but was described as “necessary” as it navigated an “uncertain economic environment”. 

Housing for Women has been providing affordable homes and support in London for women and children escaping domestic violence and abuse for over 40 years.

Alongside a negative cover ratio, the landlord’s latest accounts highlighted a number of other concerns: the remediation of a development scheme, void losses and the retention and recruitment of staff.

The landlord’s operational review shows a plan to reoccupy and remediate the scheme in Childers Street, Deptford after a significant fire in May 2020.

There was no loss of life in the incident, but a waking watch has been put in place “to support resident safety and provide additional reassurance”. 

A continuing concern for the scheme is the extent to which the work is not covered by insurance or other claims.

The accounts show the landlord expects its existing loan covenants to remain unaffected by the financial impact of the remediation plans. It told Inside Housing that it was working with all key stakeholders and consultants to progress both the works and claims for costs with a risk-managed approach.

Void losses across both general needs and supported housing stood at £255,000 for 2020/21, up from £136,000 the previous year. The landlord said this was mainly down to accommodation type or the availability of nominations, and a number of voids were unable to be tenanted because of COVID-19. 

Housing for Women said: “A negative EBITDA-MRI occurs when an organisation is investing more in revenue and capitalised costs within a period than it is receiving through its sources of income.

“In respect of 2020/21 and wishing to continue to address past underinvestment, Housing for Women’s board considered the investment needed in our tenants’ homes in respect of both revenue and capitalised repairs including increased property compliance. 

“They authorised significant capital investment within an approach of active asset management over the short to medium term. Our low gearing in comparison with our sector peers, due to underborrowing in the past, enabled us to secure funding for this significant and important investment.”

The landlord said it had also experienced considerable expenditure in respect of its responsive repairs in an attempt to catch up on works delayed through the COVID-19 pandemic. 

To help address this issue, the landlord has appointed a new repairs contractor that it hopes will improve value for money and customer satisfaction.

Housing for Women said it was satisfied that it had adequate resources to continue operating for the foreseeable future and had supportive lenders, alongside regular stress-testing on its financial plan. 

Susan Kane, chair of Housing for Women’s board, said: “The board has recently considered and approved its new five-year corporate plan and associated 30-year financial plan, informed by our recent stock-condition survey and continuing with our active asset management.

“Under this plan, the EBITDA-MRI is forecast to return to positive within the next five to six years.” 

The accounts for the year to September 2022 are due to be published in July.