Notting Hill Genesis reveals £129m deficit

Notting Hill Genesis (NHG) will report a deficit of £129m in 2024/25.

The G15 landlord, in an unaudited trading update for the year ending 31 March, revealed it will post a large deficit for the second successive year, following last year’s figure of £90.2m.

NHG said the latest deficit is due to several factors.

The group’s 3,000-home private rental portfolio has been revalued, leading to a £119m drop in valuation. It said it has been “impacted by macro-economic uncertainty, gilt price movements upon which the value of these assets is derived, private rental growth rates and the unknown impact of future legislation including the Renters Rights Bill.”

The group also posted £45m in exceptional costs, including for additional building safety work at its Oak Square development in Stockwell, south London, and costs relating to its 800-home Spray Street Quarter development in Woolwich.

There were also cost over-runs at NHG’s Cambridge House development in Croydon, due to a contractor administration while there were also impairment charges relating to schemes in Hertfordshire and Essex.

The group did however increase its operating surplus excluding one-off charges, from £101m to £115m, while its turnover rose by 1% to £717m.

The group sold 191 homes which it said was in line with its new build programme. It said it is on track to deliver a further 986 completions in the year ahead. NHG said it has strong liquidity and headroom of more than £588m in cash and undrawn facilities

The large deficit for NHG comes off the back of last year’s £90.2m deficit. The landlord filed its accounts late after identifying £101.5m in one-off costs, the majority of which related to building safety liabilities and impairments.

NHG is continuing to work on an improvement plan after being downgraded to a non-compliant ‘G3’ governance grade by the Regulator of Social Housing in November. A regulatory inspection found issues of concern with its business planning and risk and control frameworks that led to ‘poor outcomes’ for tenants. It was also awarded a ‘C3’ rating against the consumer standards, meaning it is failing to meet outcomes and needs to improve.

In April it agreed an 11-point action plan to improve. In today’s update, NHG said “good progress is being made” with the plans, which are being overseen by new board member, Léann Hearne, the outgoing chief executive of Merseyside landlord Livv Housing Group.

Patrick Franco, chief executive officer of Notting Hill Genesis, said: “We have made good operational and strategic progress in the year, despite the challenging economic and market conditions. The regulatory review outcome was disappointing, but we have responded positively and accelerated the transformation which was already underway.”

NHG has in the past 12 months appointed people to a number of new roles including chief customer officer, chief homes officer, chief people officer, chief governance & risk officer and chief organisational effectiveness officer.

Franco said: “Notting Hill Genesis is an organisation undergoing significant change and investment. It will take time to deliver the results our residents expect but I am confident in our plan and our progress. None of this would be possible without the effort and dedication of our team and I pay tribute to their commitment.”

NHG has previously issued a lengthy statement outlining the work it is doing to improve in a range of areas, including improving board skills, risk management framework and board oversight of health and safety. It is also working to improve its legal compliance of external managing agents, fire remediation actions, repairs and maintenance, its understanding of the condition of its homes and its listening to residents.

In what has been a difficult few months for NHG, a coroner also opened an inquest into the death of a baby boy in flat managed by the housing association.

Akram Mohammed died in February and an inquest at St Pancras Coroner’s Court is looking into the circumstances of his death. Mohammed’s father has told media outlet LBC that in his opinion damp and mould contributed to Akram’s death.