Surplus doubles due to one-off merger gain but repair costs rise
Stonewater has increased its annual development by 23%.
The Leicester-based housing association, in its financial statements for the year to 31 March, said it completed 1,185 homes in 2023/24, up from 963 the previous year. This was,however, lower than its 2022-30 strategic plan target in to deliver 1,500 new homes per year.
The group spent £248m on development in the year, up 28% on the £194m it spent the previous year.
In its accounts, the 36,000-home provider said: “Stonewater’s development programme is strong and ambitious and is among the largest in the sector.”
The group also increased its spend on existing properties from £36m to £32m.
Stonewater’s surplus more than doubled to £131.4m this year, primarily due to its takeover of the 1,650-home Mount Green Housing Association in February, which generated a one-off gain of £121.7m.
However its operating surplus, which excludes one-off gains, dropped from £65.7m to £60.5m as repair costs increased.
Stonewater’s operating costs increased from £157.3m to £187.2m, largely owing to an increase in repairs and maintenance costs.
Stonewater said: “The overall costs reflect increased volumes of repairs, ongoing maintenance and improvements for our customers’ existing homes and the investment in our transformation programme to drive future efficiencies.”
The housing association’s operating margin dropped from 22% to 19%. It attributed this decrease to a strategic decision to invest more resources and incur higher costs to meet the growing demand for quick and responsive repairs, increasing spending by £15m compared to the previous year.
The housing association’s Earnings Before Interest, Taxes, Depreciation and Amortisation and major repairs (EBITDA MRI) included fell to 79.3%, well below its target of 124%, as a result of the decrease in its operating surplus, higher interest rates and higher investment in properties.
The group’s operating surplus for the year went down from £65.7m to £60.5m.
In the financial report, Nicholas Harris, chief executive of Stonewater, said: ”It is fair to say that this year has been an especially testing one for customers, colleagues, and for the entire sector, as a whole, because of the ongoing cost-of-living crisis and the continuing tough operating environment.” He added that he is “pleased to report that we are weathering the storm”.
Stonewater’s staircasing receipts from shared ownership sales dropped from £14m in 2022/23 to £8m in the year to 31 March 2024, while open market sale receipts dropped by £1.4m to zero.
The group’s turnover increased to £271m, from £239m in 2022/23. Its rental income increased by £24m, or 14%, due Stonewater delivering more homes, rent increases, the acquisition of Greenoak Housing Association in 2023 and the addition of homes following Mount Green Housing Association joining Stonewater.
Housing association financial statements 2023/24
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