Sage’s three for-profit RPs report more than £100m in losses due to interest costs

Three for-profit registered providers owned by Blackstone-backed Sage have reported combined losses of more than £106m in the year to 31 December.

Sage Housing announced a loss of £61.5m, due in large part to an increase of £44m in interest charges and nearly £9m in reduced interest received. The provider increased its operating profit excluding one-off items, from £35.2m to £45.2m, while its turnover fell from £227.2m to £217.1m.

Sage Housing delivered 3,755 homes in the year, up 8% year-on-year. Sage Housing was earlier this month renamed Sparrow Shared Ownership after its portfolio of 3,000 shared ownership homes was sold to the giant pension fund the Universities Superannuation Scheme (USS), for £405m in a deal announced earlier this month.

Sage Rented, which owns a portfolio of affordable and social rented homes largely managed by housing association Places for People, made a loss of £39.5m, compared to a loss of £7.6m the previous year. This was again in large part to £25m in increased interest costs.

Sage Homes, a development RP, made a loss of £5.1m, compared to a loss of £438,000 the previous year. Its cost of sales was £48.9m.

John Goodey, chief financial officer at Sage, said the losses were forecast.

He said: “Although the company continues to demonstrate operational profitability, its current debt levels, which partially finance operations and considerable construction in progress, combined with elevated interest rates, have led to a loss before tax.”

In total the Sage group increased its number of homes delivered by 17% year-on-year to 4,177 units, it also increased its investment in affordable housing by 6% to £557.9m and boosted turnover by 21.7% to £308m.

Mark Sater, chief executive of Sage, said the provider had “reported another year of strong operational and financial performance.

He said: “We have also demonstrated our ability to adapt quickly to changing economic conditions through innovative and agile partnerships with developers to bring much-needed additionality to the sector and continuing to deliver affordable homes at scale.”

Sage’s three for-profit RPs in December received a compliant G1/V2 rating from the Regulator of Social Housing.