The housing association’s surplus has been hit by high inflation and increased investment in its existing homes
Torus Group’s surplus fell 45% in 2023/24 financial year from £38.1m to £19.9m, in what the Merseyside social landlord described as “another challenging year”.
The 40,000-home social landlord attributed the decrease to high inflation, an ongoing focus on tenant safety, limited easing of the cost-of-living crisis, and the impact of economic challenges on developers and suppliers.
Despite this, Torus’ turnover increased to £245.6m in 2023/24 from £226.6m. It said the rise in turnover was partly attributable to a rent increase of 7% in April 2023.
Torus’ operating surplus dropped from £47.3m in 2022/23, to £30.2m. Operating costs increased by 15.7% over the year, from £162.6m to £188.2m.
Torus said the main drivers behind the increased costs were higher spending on repairs and maintenance due to inflationary pressures and a proactive approach to investing in properties to ensure the quality of homes meet tenant expectations.
The housing association increased its spending across routine maintenance and major repairs by £13.1m, while expenditure on planned maintenance went down by £1.4m.
The North-west social landlord faced an impairment charge of £9.9m due to the failure of a contractor. This charge has been reflected in Torus’ operating costs.
Five Torus development projects have incurred extra costs due to contractor failures, along with a parcel of land earmarked for development.
In spite of delivery challenges, Torus62 Developments delivered 875 new homes in 2023/24, up from 679 properties in the previous year.
The development subsidiary reported a surplus of £1.2m, up from £0.5m in 2022/23, and its turnover rose to £108.1m, compared to £77.3m the year before.
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The group’s new build strategy aims to deliver 5,600 new homes between 2021 and 2026, primarily across the Liverpool City Region, West Lancashire and Cheshire.
Torus has There is a pipeline of 4,139 homes across 52 schemes on-site at year-end, and another 664 units with the necessary board approvals in place.
Torus’ business plan forecasts that this development activity will require an increase in borrowing from £323m to £1,080m by 2034/35.
The plan indicates that Torus’ operating surplus will remain robust at £61.7m in 2024/25 and its surplus is expected to grow in subsequent years, reaching £55.2m in 2025/26.
Housing association financial statements 2023/24
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