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Wheatley sees surplus fall £23m into red
Scottish social landlord Wheatley Group has seen its £243.6m post-tax surplus from 2020 wiped out by refinancing costs within the group, latest financial results have shown.
Wheatley Group saw its post-tax operating surplus sink to £23.2m into the red in part due to financing costs and a rise in operating expenditure.
Wheatley’s surplus was inflated in 2020 as a result of the acquisition of 10,356-home Dumfries & Galloway Housing Partnership (DGHP) in 2019, which contributed to a large part of the group’s £229.3m of non-turnover income on its overall balance sheet for the 2020 financial year.
Those non-revenue gains swung to a £7.99m loss in the latest accounts, which also attributed to the drop in overall surplus.
The Scottish group, which has seven social landlords within it, saw turnover rise from £357m to £388.6m in the year to 31 March 2021.
Operating expenditure also rose from £271.6m in 2020 to £303.9m in 2021, with a further £99m of finance charges, up by £28m from £71.9m in 2020 also attributing to the swing surplus for the year.
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Wheatley also saw net rent arrears almost double from £7m in 2020 to £13.7m in 2021, but the association said that a proportion of the rise was due to reporting dates of the financial year. Arrears stood at 4.49% of rental income.
Income from social rent and service charges grew from £245.6m, up from £283.5m. Of the £37.9m increase in social letting turnover, £30.7m was attributed to DGHP’s addition to the group.
The annual report stated: “The group’s core activities generated cash of £158.8m in the year, an increase of £46.8m from 2020, with £18.7m of the increase attributable to the cash generated by DGHP on its first full year in the goup.”
Despite seeing its surplus falling into the red, Wheatley’s operating cost per home fell from £3,656 to £3,017.
The group also reported that it had to suspend its new build development programme for four months because of the pandemic, however the financial results showed that it managed to complete 413 affordable homes, 329 of which were for social rent and 84 of which were for mid-market rent.
Wheatley stated that a further 1,186 homes across 24 sites were under way, up from 735 in the previous year.
Long-term loan provisions stood at £1.48bn, up slightly from £1.45bn with other long-term creditors standing at £78.9m, up from £62.4m. Total reserves increased by £77.5m to £1.22bn.
Wheatley’s chair Alastair MacNish, who is due to step down at the group’s AGM in September this year, said: “Despite the disruption and disorder on a huge scale caused by the pandemic, the group finished the year on track, financially and operationally, completing the vast majority of objectives and targets set out in our 2015-21 strategy…
“Despite severe financial difficulties faced by many customers, impact on rent arrears was limited. In fact, excellent work and careful planning by management and housing and support staff meant rent arrears at year end remained below 4.5%…
“In March 2021, we also took the opportunity to restructure some of our fixed-rate loan arrangements, which will reduce future interest costs for the RSLs in the group and improve the financial strength of the business plan going forward.”
Wheatley Group is made up of seven social housing providers. These are: Glasgow Housing Association, which manages 40,551 homes in the city and region; Dunedin Canmore, which looks after 6,064 homes in Edinburgh, the Lothians and Fife; DGHP, which manages 10,356 homes; Loretto Housing, which manages 1,463 homes in central Scotland; West Lothian Housing Partnership, which manages 742 homes; Wheatley Care, which has 6,353 homes under its management; and Lowther, which manages a portfolio of 1,576 homes.
