Landlord says resource pressures and contractor administrations hit annual development figures
Guinness Partnership completed slightly more than half of the homes it was targeting in 2023/24.
The 65,000-home association, in its financial statement for the year to 31 March 2024, said it completed 608 homes in the financial year, against its original target of 1,055.
It said the figure was “less than it set out to do, reflecting the economic environment and pressures on our resources.
“These pressures are compounded by instability in the construction contractor marketplace. A number of our contractors fell into administration during the year, causing delays and rising costs on some schemes.”
Guinness said it has now revised down its strategy target of building 5,500 homes between 2018 and 2025 to 4,000. It has completed 3,081 of these so far.
Guinness’ overall surplus fell by £28m year-on-year, despite a £63m gain from the acquisition of non-compliant provider Shepherd’s Bush Housing Group.
Excluding the merger gain, Guinness’ underlying surplus was £18m, down from £46.4m in 2022/23.
The group’s underlying operating margin, excluding surplus from the disposal of housing properties, first tranche sales and outright sales, has fallen year-on-year to 9.6% from 18.2% in 2022/23.
Demand for responsive repairs rose by 8% year-on-year, leading to an additional £16.4m in repair costs, described by Guinness as “significant unbudgeted expenditure.”
>> See also: Guinness appoints new chief financial officer
>> See also: Guinness completes takeover of troubled Shepherds Bush
The 65,000-home housing association also recorded £22.0m in impairment charges and £26.9m in building safety remediation costs for two leasehold schemes in London owned by Shepherd’s Bush Housing Association (SBHA).
The organisation also incurred a £7.3m non-cash charge from exiting a pension scheme.
In addition to the above impairment costs, SBHA has allocated £10.8m for the potential future costs associated with resolving building safety issues at a building in Greenford in West London and Guinness Housing Limited, part of Guinness Partnership, has provided £7.6m for remediation of some buildings in East London.
The group’s turnover fell from £540.3m to £459.8m, driven by a nearly £70m increase in operating expenditure.
Its operating surplus also fell by £20.6m due to increased financing costs.
Guinness’ financial statement noted that the housing association continues to be financially resilient, despite the “well-known” scale of challenges facing social housing.
Guinness warned that these are challenges will affect the new government, and that “their approach will largely shape what Guinness is able to do over the next few years”.
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