The 50,000-home housing association reports ‘exceptional’ surplus of £518m due to merger with Silva Homes.
Abri’s housing completions decreased by 19% last year, falling from 1,017 homes in 2023 to 821 homes in the financial year ending 31 March 2024. Its figure excluding joint ventures was 686 units.
Despite the annual drop, the group still has a target of building 10,000 homes between 2020 and 2030.
Gary Orr, chief executive at Abri, said: ”During the year, in conjunction with its strategic partner Homes England, Abri delivered 686 new homes as part of a long-term commitment to create 10,000 new homes by 2030, while securing 820 plots for more new homes.
“At a difficult time for the construction industry, with rising costs, planning difficulties, skills and materials shortages, Abri’s future homes pipeline is both robust and healthy.”
In June, Abri reported that it had built 900 homes during the 2023/24 financial year.
During the same period, Abri spent a ‘record level’ of £100m across all categories of repairs and maintenance. This figure included £5m of investment in building and fire safety, £4m to make its homes more energy efficient and £1m to tackle the root causes of damp and mould.
Due to the merger with Silva Homes in October 2023, Abri reported a surplus of £518.9m, up from £39.5m the previoys year.
However this includes a £464m one-off gain from Silva Homes becoming an Abri subsidiary. This amount represents the fair value of Silva Homes’ net assets at the time of acquisition.
>> See also: Abri confident of hitting 10,000-home target despite annual fall in completions
>> See also: ‘I love helping people’: My work as a community safety officer at Abri
Excluding the effects of the Silva Homes merger, the housing association’s surplus before tax increased by £11m, or 27%.
Silva Homes became a subsidiary of Abri Group on 2 October 2023, and the transaction has been recorded as a business combination, which is in substance ‘a gift’. In November last year, Abri entered into merger talks with Octavia, which the Regulator of Social Housing had rated as non-compliant with ‘V3’ and ‘G3’ gradings for its financial viability and governance.
In the financial statement, Abri’s chief executive, Gary Orr, said: ”We remain excited at the prospect of Octavia joining the group, subject to the necessary consents and confirmation that this is in the best interests of our customers.”
The group’s results for the 2023/24 financial year include the gift from the acquisition and the financial performance of the newly acquired subsidiaries, while the previous year’s results do not. This means that the financial results for the years ending 31 March 2024 and 2023 are not directly comparable.
Excluding the impact of the merger, the group’s turnover increased by £38m year on year to £302m, while its operating surplus rose by £24.5m or 33% to £99m.
Prior to the merger, Abri’s turnover was £273m, with Silva Homes contributing £29m to the £302m turnover in the six months to 31 March 2024.
Silva Homes reported an operating surplus of £3.4m between October and March. It posted a £139,000 surplus before tax during the same period.
In his statement on the financial results, Orr said that “against strong economic headwinds”, the housing association had delivered “an exceptional operating surplus this year”.
Orr added: “Rather than stepping back from or modifying our strategic ambitions, the strength and resilience of the group enabled Abri to lean into the challenges it faced.”
As a result, he said Abri has made strong progress against its priorities and long-term goals, such as investing in existing homes, contributing to its net zero commitments and tackling damp and mould.
He also said that “following Silva joining the group, we’ve commenced our transition to a regional operating model, overseen by regional managing directors, accountable regional boards and local customer representation.”
Regarding Abri’s development plans, he said “at a difficult time for the construction industry, with rising costs, planning difficulties, skills and materials shortages, Abri’s future homes pipeline is both robust and healthy.”
Housing association financial statements 2023/24
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