Annual profits at North West housing group will be in line with forecasts
Manchester-based housing provider, Great Places Housing Group, said full year profits will be in line with forecasts.
In a fourth quarter performance update ahead of releasing full year results to March 31, following its September AGM, the group revealed that its full year unaudited surplus before tax is expected to be £22.2m, compared with £21.1m the previous year, almost exactly as predicted.
Turnover in the year was £161m, against £166m in the previous year, while the operating surplus was £46.9m, slightly ahead of last year’s £46.8m level.
The outcomes for turnover, interest and property sales were all better than forecast, but operating costs and depreciation/amortisation were worse than projected.
Operating costs were £3.3m higher than budget. This was mainly due to repairs and maintenance costs, with a range of factors contributing to this, including the inflationary impact on materials, sub-contractors and fuel costs, additional resourcing for damp and mould inspections and remedial works, as well as higher disrepair volumes and costs.
Inflation impacted most lines, including the impact of energy costs rising by more than 400%, increasing the group’s irrecoverable service charges and office energy costs.
Net interest costs were £1.2m better than budget due to better interest income on cash deposits with higher interest rates, a smaller increase in interest payable, with 94% of debt being fixed, lower debt drawn in the year, and lower capitalised interest than forecast.
Drawn debt – excluding bond premium, other non-cash balances and loan fees, and including finance leases – as at March 2023 was £643.7m, down from £652.2m, with the movement due to scheduled loan repayments.
Cash balances, excluding cash held on behalf of leaseholders, were £92.9m, as against £119.5m in March 2022, with undrawn bank facilities immediately available of £143.8m.
The group said its internal financial ‘Golden Rules’ around interest cover, gearing and operating margin were all met at the end of the period.
The performance management for 2022/23 centred around 11 critical success factors (CSFs) which are designed to focus us on the delivery of the corporate plan, and particularly its vision of ‘Great Homes, Great Communities, Great People’.
Four targets were achieved at the end of what was an incredibly challenging year: Building safety; households into work, training and volunteering; sickness absence; and colleague engagement.
Among the seven CSFs that missed target for the year were: 649 new homes across 29 local authority areas covering the North West and Yorkshire were completed in 2022/23, the highest number built by Great Places for several years, but slightly short of the CSF target; the arrears target was to achieve four per cent, but was 4.7%, improving from five per cent at the end of Q3; average re-let time was 28.6 days, against a target of 22; the CSF score for satisfaction of 69% fell slightly short of a target of 71%.
