You are viewing 1 of your 1 free articles
Aster suffers as shared ownership margin hit but surplus edges up
Aster Group has reported a sharp drop in margin on shared ownership sales and an 11% fall in revenue from the tenure amid the pandemic, but its overall turnover and operating surplus rose.
The 32,000-home landlord, which is known for its focus on shared ownership, recorded £42m of income from the sale of 339 first tranche sales in the year to the end of March 2021. This compared with £47m from selling 431 homes the prior financial year.
Aster’s margin on shared ownership sales in the 2020/21 financial year slid to 10.8%, compared with 16% the year before.
The association blamed this on “changing geographies the group operates in, an increased focus on land-led developments, and increased costs as a result of the pandemic”.
But this was “slightly offset” by a £10,000 increase in the average sales price for a 40% first tranche share – a result of more of the group’s shared ownership sales from properties in higher value areas, the landlord said.
READ MORE
Aster, which announced a merger with London-based care specialist Central & Cecil Housing Trust in June, said its shared ownership performance “exceeded the group’s expectations at the outset of the pandemic”.
Overall completions across all tenures fell 13% to 928 as the landlord felt the impact of last year’s first lockdown on building sites, like many in the sector. Of the completions, 478 were for social or affordable rent.
But Aster kept up its delivery of market sale properties with 111 handed over, compared to 112 the year before.
The landlord’s total turnover rose 4.6% to £224.4m. This was helped by an 8% rise in revenue from its core social housing division to £176m, which benefited from the increase in annual rents following the government’s lifting of the rent rise cap.
The group’s margin on social housing lettings was 29.2%, up from 27.2% the prior year, which Aster said was due to “reduced levels of major improvements works being able to be undertaken due to the restrictions in place because of the pandemic”.
Income was also boosted by extra properties being added to the portfolio, including 480 new homes from Dorset-based East Boro Housing Trust joining Aster as a subsidiary at the end of the last financial year.
Rent arrears were a bright spot, coming in at 2% at year-end, against a target of 3% and a prior year figure of 2.2%.
Aster reported a post-tax surplus of £45.7m, a 24% drop on the prior year. However, the previous year’s surplus was boosted by a £14m gain from the acquisition of East Boro. On an operating basis, the association’s surplus edged up to £73.3m, compared with £71.9m the prior year.
The group reported an overall operating margin of 24.4%, up from 24.2% prior year.
Gearing was 52.8% compared with 53.5% the year before. Meanwhile, net debt increased by £34m to £961m, the landlord said.
Aster has what it called an “ambitious development programme” and has plans to develop 10,700 new homes by January 2028.
