G15 housing association reports strong market sale margin as it continues merger talks with Optivo
Southern Housing Group increased its turnover 19% last year.
The 30,700-home housing association, in its accounts for the 2021/22 financial year, reported turnover of £252.3m, up from £212m the previous year.
The increase was due largely to a more than fourfold increase in income from open market sales from £10.4m to £47.3m. The open market sales figure was boosted by the completion of the final phase of the group’s Lisgar Terrace scheme in Hammersmith & Fulham, which delivered 72 homes for private sale.
The group reported a margin ‘in excess of 41%’ on open market homes. Turnover from social housing lettings increased marginally from £168.4m to £170.2M
The group’s surplus fell from £81.6m to £31m, but this was due to a £58.8m gain the previous year following the acquisition of small provider Crown Simmons. Its underlying operating surplus, which excludes one-off items, increased from £61m to £72m.
The group’s operating costs increased from £148.3m to £151,4m, which it said was driven by “depreciation linked to ongoing investment in new and existing homes as well as in technology.”
Its overall operating margin declined slightly from 28.7% to 28.,2%.
The group completed 230 homes in the year, more than the 93 it built last year but behind its target of 300. The figure was also lower than the 419 homes the group completed in 2019/20, pre-pandemic. Southern however has 1,282 homes in construction, 45% higher than the 883-home figure quoted in the previous year’s accounts.
The results come as Southern continues to hold discussions with fellow G15 association Optivo about merging to create a 77,000-home provider.
In the accounts, Southern said the potential merger would give it “greater resilience to withstand future headwinds, whether these come from adverse market and economic conditions, changes in building safety regulation or the ongoing challenges of tackling the climate emergency”. It stressed that the move is subject to due diligence, board approval and consents from external stakeholders.
Housing association financial statements 2021/22
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