Barking and Dagenham council’s housing company reports first profit

Pioneering local housing firm Be First has reported its first profit, ahead of expectations from its parent, Barking and Dagenham council.

The regeneration company, set up to build up to 50,000 homes in the east London borough and chaired by former civil service head Lord Kerslake, reported a profit of £325,000 for the 12 months to March, on revenue of £10.8m in accounts filed at Companies House.

The organisation said in the accounts that its first full year of operation had been a “success” and that it had finished in a strong financial position “ahead of the budget agreed with the council”. It said “many” of its development schemes had been progressed far enough to allow construction to begin before March this year.

The organisation has set out plans to oversee delivery of at least 9,700 homes in a range of tenures in its first five years, including the construction of 2,200 itself, with the rest built by external developers.

The profit of £325,000 compares to a loss of £955,000 for the previous year, during which the company was set up. Revenue rose fourfold from the 2018 figure of £2.8m.

However, the accounts also reveal the business’ total dependence on its parent, Barking and Dagenham council. The firm reported a negative balance sheet of -£524,000, principally caused by the liability created by a £4.1m loan advanced to it by its parent local authority.

Despite this, the business said it should still be considered a going concern because the council “has confirmed that it will continue to provide support as needed to enable the company to meet its financial obligations for the foreseeable future and that it does not intend to seek repayments of amounts due”.

The firm said this support “will enable the company to continue in operational existence by meeting its liabilities as they fall due for payment”, even though it admitted “the directors acknowledge there can be no certainty this support will continue”.