Places for People boosts surplus by building more homes for sale

Places for People (PfP) has announced a 15.8% increase in its pre-tax surplus which it said is due in part to increased development of homes for sale.

The housing association giant, which manages or owns 220,000 homes, reported a pre-tax surplus of £39.6m for the six months to 30 September, up from the £34.2m reported for the same period last year.

Turnover rose from 13.7%, from £376.6m to £428.1m over the same period, although it has yet to return to pre-pandemic level of £437.2m.

The statement said: “The increase in turnover, and corresponding increase in profits, relates to the strong performance of the affordable housing business as well as an increase in development for sale activity continuing the strong performance seen in the second half of last year. Overall, this led to an operating margin of 25.6% compared to 25.3% at March 2021.”

“Despite the continuing challenging environment, the group continues to deliver on its strategy, growing its business enabling the group to make a positive impact to communities socially, environmentally, and economically.” The increase in sales activity is not quantified in the statement.

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PfP said it completed 417 affordable homes in the six months, up from 348. In the whole of 2020/21 financial year PfP completed 911 affordable homes, while in 2019/20 it built 1,466.

The brief update did not include a figure for total homes delivered, including market-sale homes, in the half-year.

PfP earlier this year secured a strategic partnership grant allocation of £250m to build 4,403 homes under the 2021-26 affordable homes programme.

The stronger performance in the first half of 2020/21 follows a 17.9% drop in surplus and turnover for the last financial year as the pandemic severely disrupted PfP’s market housing and commercial leisure centre operating activities.

The drop in income was in part due to most of the 108 leisure centres it manages being forced to close during the covid-19 lockdown, with revenue from that part of the business.

PfP last month announced the appointment of former US banker Greg Reed to lead the organisation. Reed took as chief executive on 1 December.