Hyde nearly triples surplus after Pinnacle acquisition boost

Hyde revealed last October that it had completed a deal to acquire Pinnacle Group, which manages around 73,000 homes for councils, investors and house builders.

Last month, Hyde also acquired investment firm Pinnacle Investments, which operated separately to but was affiliated with Pinnacle Group. 

Hyde now owns or manages 117,908 homes. Its stock was further increased in April by taking on non-compliant London landlord Tower Hamlets Community Housing as a subsidiary. 

Hyde’s leap in group turnover, however, was offset by its operating expenses rising to £387.6m, compared to £325.8m the year before.

Pinnacle itself only contributed £5.2m in surplus as its costs totalled £81.2m. 

Elsewhere in its annual report, Hyde reported a drop in completions to 602, compared to 630 the year before. Handover delays, contractors going out of business and “fluctuating phasing of developments” were among the reasons for this drop, the landlord said. 

Of the 602 handovers, 386 were for shared ownership, 168 were for social or affordable rent, and 48 were for market sale.

Starts also fell, dropping by 37% year on year to 519. Other G15 landlords have seen similar falls as development costs have spiked.

However, Hyde said it is still aiming to build around 5,500 homes between 2025 and 2029.

Over the year, the group sold 315 shared ownership homes, an increase from 238 the year before. However, market sales fell as the number of transactions slid to 57, compared to 79 the year before.

Hyde reported an overall operating margin of 16.7%, up from 7.3% the year before.

For its existing stock, Hyde revealed that it spent £123.8m on repairs and maintenance, a 17% rise on the previous year.

On building safety, the landlord disclosed that it spent £2.7m last financial year, up from £2.2m the previous year.

Hyde also secured £4m from grants and recovering money from contractors.

The landlord had previously been successful in recovering money from a contractor when it was awarded £10.8m in a cladding case against an Essex-based firm in 2022.

Hyde reported a gearing figure of 45%, up slightly from 44.4% the year before.

The group’s EBITDA MRI figure was 90.3%, compared to 80.1% the previous year, which Hyde said was helped by refinancing its debt.

The group’s net debt edged up to £1.6bn by the end of the year. Cash reserves rose to £122.8m, compared to £105.3m the year before, the landlord reported. 

Rod Holdsworth, chief financial and resources officer at Hyde, said: “We’re making strong progress in delivering our long-term plans, despite the challenges the sector faces.”

Hyde currently has G1/V2 grades with the regulator but has yet to be assessed for consumer standards.