Both wholly-owned housing companies have boosted their profits despite viability challenges
Barking and Dagenham Council’s housing developer, Be First, reported a pre-tax profit of £8.5m for the financial year ending March 31 2023, up from £3.5m in 2022.
Newham council’s wholly-owned housing company Populo Living has also “remained resilient” this year, with its gross profit increasing from £3.2m in 2021/22, to £4.5m in the 2022/23 financial year.
Be First’s financial report for the year stated that it has increased its profit as a result of “resilient strategies” that management employed, including reviewing its staffing structure to improve its “effectiveness and efficiency”.
The report added that Be First has strengthened its processes internally and between Be First and Barking and Dagenham Council.
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Be First was established in 2017 as Barking and Dagenham’s own regeneration company, to facilitate the delivery of over 50,000 new homes and 20,000 new jobs by 2037.
Be First reported that covid-19 and wider macroeconomic conditions continued to impact its business. It stated: “While no sites closed in response, some delayed opening, causing a reduction in fees in the year ended 31 March 2023”.
Be First said that some schemes in design have also been delayed, which has affected its financial position for the year, but that mitigation strategies have been put in place to reduce the financial impact.
According to Populo Living’s accounts for the 2022/23 financial year, the main reason for the increase in its gross profit was due to a rise in rental operations.
This increase was driven by the growing number of homes under management and shared ownership sales at Manor Road, Newham.
Populo reported that they have delivered over 300 new homes for the London Borough of Newham, and that an additional 392 are currently under construction. The total number of homes under Populo’s management is now 475.
Populo has various development plans in the pipeline, including the regeneration of Carpenters Estate in Stratford, which will deliver over 2,000 new homes.
Populo also stated that the fair value of its investment property has decreased by £8.9m this year as the current land value on its private rented sector sites at Plaistow and Brickyard is currently assessed to be lower than the total costs incurred up to this point.
In the 2021/22 financial year, the value of Populo’s investment property increased by £2.2m.
The company has also recorded a fixed asset impairment of £0.8m. This was due to the expected costs of completing affordable units in its development programme being greater than the sales value of these units at completion.
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