Development soars at Peabody in first accounts since Catalyst merger

Peabody has reported sharp increases in turnover, surplus and development in its first accounts since its merger with 37,000 home landlord Catalyst. 

In its accounts for the 2022/23 financial year, the historic 107,000-home housing association reported its surplus was up to £257m from £213m, on the back of a 66% increase in turnover to £1.1bn. 

The organisation also saw the number of homes it completed increase nearly threefold to 2,399, from 866 in the prior year, following the completion of the merger in April 2022.

The organisation said its turnover was higher than expected due to the outperformance of revenue from private sales and first tranche shared ownership. 

However, its customer satisfaction fell to 58%, compared to an average across the G15 major London landlords of 73%. The late chair of Peabody, Lord Bob Kerslake, said in a posthumous letter published in the accounts that the board’s priority was to get the “basics right” for tenants. “It is clear to me that, although things do go wrong and we are not as consistently good as we should be, we are living our values and turning our purpose into action,” he said.

Peabody, which serves customers across London and the Home Counties, spent £179m on existing repairs – up from £113m – including £66m on building and fire safety work. 

It also increased its annual spend on development, investing £567m in new homes. This represented a 17% increase on the total amount spent by Peabody and Catalyst in the prior year, which was £355m and £128m respectively. 

The group completed 2,399 homes in 2022/23, after reporting ”strong progress” on its major developments in Dagenham, Islington, Tottenham and Oxford. 

Peabody earlier this year said it had originally intended to spend even more but was forced to rebalance expenditure to focus on existing homes and respond to the broader economic environment. The organisation has made clear it is seeking to prioritise investment in existing homes in the wake of the merger, rather than building new stock.

“While still a substantial investment building on our successful sales activity during the year, it is significantly below what was anticipated at merger,” director of treasury and corporate finance Anthony Marriott told Housing Today in July. 

In the annual report published today, Ian McDermott, chief executive, said the merger had been driven by the desire to “go further and faster, investing more in our homes and communities”, but that the world had “dramatically changes”, with market forces making this increasingly difficult. 

“The war in Eastern Europe, the energy crisis, 40-year high inflation and rapidly rising interest rates have all had a serious impact,” he said.  

“While we are not where we had hoped to be, we are certainly in a much better place than we would have been as separate organisations.” 

McDermott also paid tribute to Lord Kerslake, who died in July, describing him as “a remarkable person dedicated to improving people’s lives”.