Newly merged 80,000-home association reveals completions down 9% in consolidated figures
Sovereign Network Group (SNG) has reported a 9% drop in completions in the second quarter of the financial year.
The 80,000-home association said it completed 420 homes in July to September this year, down on the 464 for the same period last year and 21% down on the 534 for the first quarter this year.
The group said there had been a “slowdown” on its development sites, which a spokesperson said was due to overall market conditions.
The group however increased its turnover in the second quarter year-on-year by 8.6% from £161.7m to £175.7m, while its operating surplus, which excludes certain one-off costs, jumped 13.2% to £51.3m.
SNG was formed in September through a merger of Sovereign and Network but the figures combine both organisation’s numbers together.
Meanwhile credit rating agency Standard & Poors (S&P) on Wednesday lowered SNG’s long term issue rating to ‘A’ from ‘A+’
S&P said the downgrde reflects its projections ”that the group’s debt-funded development programme and steadily increasing investments in existing homes will weaken its credit metrics more than previously assumed.”
However it said the group has strong governance and treasury practices and has “built-in flexibility around investments in existing and new homes, as demonstrated by the group’s capacity to scale back or pause development in recent years.”
SNG is planning to invest £9.2bn in development over the next 10 years to build 25,000 homes. The organisation says this is 4,000 more than they had been planning to build individually.
The group built 1,672 homes last year, which was an increase of 476 on the previous year and above its 1,400-home target.
Sovereign pre-merger bought bought two shopping centre sites, in Bristol and Farnborough, as part of a town centre regeneration strategy.