GSA said its underlying stability is improving after a “challenging” first two years
Greensquare Accord has reported an annual surplus for the first time since it was formed through a merger of Green Square Group and Accord Housing in April 2021.
The 26,000-home housing association, in its financial statement for the year to 31 March, reported a surplus of £3.9m. This compares to a deficit of £28.6m last year and £19.3m in 2021/22.
Colin Dennis, chair of Greensquare Accord said: “The result reflects the increasing underlying stability now emerging for the group following a challenging first two financial years post-merger.”
The deficit in 2022/23 was partly due to refinancing costs of £7.6m, as well one-off non-recurrent costs of £18.7m during the financial year. These costs were associated with exiting a domiciliary care business totalling £3.6m and impairments on a portfolio of care and support schemes amounting to £13.4m, along with pension exit costs of 1.8 million.
>> See also: Vistry issues profit warning after build costs higher than estimated
>> See also: ‘Challenging year’ for Torus as surplus drops 45%
To help boost its underlying financial stability, GSA’s board has continued to focus on ‘rationalising’ the housing association’s activities, exiting a total of 15 care and support services during the financial year.
During the year, GSA received a one-off gain of £2.4m from Alpha Housing Cooperative’s business combination into the group in March.
The housing association reported turnover of £230.4m, up from £214.3m in the previous year.
GSA’s operating costs excluding non-recurrent costs increased over the year, from £178m to £189.3m. The increase reflected pay awards to staff and a 13% increase in service charge costs year-on-year.
The social landlord increased its spending on existing homes during the financial year, investing £22m in capital works, up from £11.4m the previous year, and allocated £49.4m to revenue expenditure on other repairs and refurbishment activities.
GSA’s earnings before interest, taxes, depreciation, and amortisation, major repairs included, (EBITDA MRI) interest cover rose to 83% from 55% in the previous year, driven by the increase in operating surplus and the effect of non-recurrent costs on the previous year’s results.
The group reduced its investment in the development of new homes down from £122.4m in 2022/23, to £54.4m in the 2023/24 financial year.
The housing association delivered 463 new homes, which it said was “slightly down versus target owing to challenges in construction and contractor delivery”.
GSA has said it will reduce reinvestment and new supply delivered between 2024 and 2026 to focus on its financial resilience.
Housing association financial statements 2023/24
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Karbon increases development but sees margins squeezed due to hike in repairs costs Newcastle-based landlord builds 644 homes in 2023/24
BPHA boosts turnover but reports deficit due to one-off refinancing costs Bedfordshire landlord increases completions by 20%
Vivid increases development to more than 1,500 homes a year Housing association boosts development by 10% in face of surplus squeeze
Southern stops committing to new developments as surplus falls 80,000-home housing association ramps up spend on existing homes
Surplus down but turnover rises in SNG’s first post-merger financial accounts The merged organisation, which is aiming to develop 25,000 new homes over the next decade, says its balance sheet is ‘robust, diversified and resilient’
Platform Housing’s surplus falls due to pension scheme exits costing £18m The Midlands-based housing association also cited cost pressures from investment in homes, customer services, and high inflation
Bromford Housing reports increase in turnover, but higher operating costs Housing association cites higher repair volumes
Clarion reports drop in turnover and surplus as it takes ‘cautious’ approach to development Housing association giant increases spend on existing stock from £393m to £418m
Sanctuary increases turnover despite 35% drop in sales income Giant housing association misses development target
Turnover and surplus up at Onward Homes North-west housing association increases shared ownership sales income
L&Q trebles surplus as operating costs fall The 109,000-home housing association has spent £112m on capital works as it shifts expenditure towards existing homes
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