36,000-home association makes £3.4m loss following additional spend on cladding on PFI tower block scheme
Together Housing Group made a pre-tax loss in the 2021/22 financial year after being hit with additional fire safety costs on nine tower blocks in Salford.
The 36,000-home association made a £3.4m loss, compared to the £16.6m surplus it made the previous year.
The North-west based provider recorded extra spend on building safety of £27.2m in the year, impacting its bottom line and overall operating margin, which fell from 17.8% to 4.4% against a target of 19.7%.
The £27.2m spend related to work to improve the fire safety of nine tower blocks refurbished by Together subsidiary Pendleton Together Operating Ltd (PTOL) under the Private Finance Initiative with Salford city council.
It said: “All nine tower blocks have been stripped of the ACM cladding material and a comprehensive further works programme is being finalised, not only to install a new cladding solution but undertake significant internal improvements, including sprinkler systems.
“Further funding has been agreed by all parties involved and Together has committed to increase this further, if required, due to the cost pressures on the programme.”
Together’s rental income increased from £147.9m to £150.9m, but its first tranche shared ownership and sales income turnover fell from £11.8m to £8.8m, which it said was a result of ‘covid-related development delays.’ The association built 214 homes in the year, down on the 305 delivered the previous year.
Together’s financial statements said it has “some areas of higher spend that others [in the sector] don’t have”, such as high-rise buildings needing extra fire safety spend, PFI costs and pension costs relating to the Local Government Pension Scheme.
Together last year promoted Kevin Ruth to chief executive from deputy chief executive following the retirement of previous boss Steve Close.
Housing association financial statements 2021/22
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