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Swan surplus slides after £3.2m cladding provision
Swan has revealed a drop in annual operating surplus after it booked a £3.2m provision to replace cladding on two of its buildings containing aluminium composite material (ACM).
In its annual report, the Essex-headquartered housing association reported that its operating surplus slid 14% to £25.3m in the year to 31 March 2018.
Swan said the fall was partly due to the “anticipated cost of replacing cladding on two schemes which contain a limited amount of aluminium composite material”.
A type of ACM cladding was used on Grenfell Tower.
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At the time the report was signed off, Swan said it was “working with the contractors” who installed the cladding to remove and replace the materials.
The 11,000-home landlord confirmed it conducted a review of safety measures on all its buildings over five storeys in the wake of the Grenfell tragedy.
“We have put in place various measures to reassure residents and have followed all of the advice issued by the Department for Communities and Local Government [Ministry of Housing, Communities and Local Government],” Swan said.
The association also saw a drop in annual revenue to £91.1m, down from £101.6m the prior year. It flagged “a decrease in private residential homes sales which was anticipated due to the mix of affordable and private homes in our development plan”.
However, Swan’s pre-tax surplus nearly doubled to £15.6m as operating costs fell to £65.8m, down from £72.2m.
The group’s reserves rose to £227.1m, up from £211.7m the prior year, while it noted that its interest cover and net debt per unit continues to meets its lenders’ requirements.
Rent arrears in the year were down to 2.24% of rent due, compared with 2.37% in 2017.
Elsewhere in the report, Swan confirmed that it delivered its first modular homes at Beechwood Village after opening a 75,000 sq ft factory in Basildon to work on offsite units.
Overall, Swan delivered 73 new homes in the year.
In a new long-term strategy the group has said it is aiming for turnover of “at least” £200m by 2027.
Housing association financial statements 2017/18
Click on the links below to read more reports about individual associations' financial statements:
A2 Dominion reports £92.5m surplus
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
