Chair says deficit due to combined impact of difficult operating environment and anticipated challenges from One Housing merger
Riverside Housing Group has recorded a deficit for the second consecutuve year, according to its results for the year to 31 March 2024.
The housing association said inherited challenges from its merger with One Housing had combined with “historically difficult operating conditions” had resulted in a pre-tax deficit of £6.04m.
The figure was an improvement of the £12.8m pre-tax deficit recorded last year, while the group’s operating surplus also saw an improvement in the year, from £41.6m to £78m.
Operating surplus as a percentage of turnover rose for the first time since 2021, hitting 11.9% from 6.7%.
The group however built 1,479 new homes in the year, more than the 1,016 recorded the previous year.
Terrie Alafat, group chair, said the group had “inherited a unique set of challenges” from its merger with One Housing, particularly related to an extensive cladding remediation programme and the need to exit loss-making activities such as the Baycroft care business.
A number of “historic development decisions” have also required the group to write-down the value of some of its inherited assets.
This is the organisation’s second year of presenting group results after the legal integration of One Housing, enabling a true year on year comparison for the first time.
“Whilst our due diligence meant that we were able to plan for these temporary challenges, our financial performance has also been held back by historically difficult operating conditions,” said Alafat.
“These have seen demand for our services rise sharply, a government imposed cap reduce our expected rental income and our interest costs balloon by more than 20% as rates have reached 16-year highs.”
“The combined impact of these factors, both expected and unexpected, means that we are posting a net deficit for the second year running.”
Riverside has now withdrawn from managing Baycroft, plans to complete its cladding programme within the next three years, and said its integration programme will deliver more than £10m of annual savings.
Turnover was £656.3m, up from £625.4m, of which more than 79% came from social housing lettings income.
Riverside owns and manages 75,626 properties across the UK, operating in every English region, as well as south-west Scotland.
It built 1,479 new homes in the year, more than the 1,016 recorded the previous year.
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