Large North East landlord sees surplus rise but margin hurt by ‘high demand’ for repairs

The group revealed it spent £114.1m on maintaining and improving existing homes, up from £109.2m the year before.

A total of £6.5m was spent fixing damp and mould issues, which was more than double the previous financial year. It comes as landlords are preparing for the delayed first phase of Awaab’s Law next month.

Jane Castor, chief resources officer at Thirteen, said it is also “consciously reducing” its interest cover to release financial capacity for spending on new and existing homes.

The group has set an EBITDA MRI interest cover target of 125% for the current financial year, which is lower than last year’s target.

In its last full year, Thirteen reported an EBITDA MRI figure of 159.4%, which it said was partly due to a reduction in its overhead costs.

On development, Thirteen reported a 20% year-on-year rise in completions as it handed over 650 homes. Of these, 266 were shared ownership, with the rest affordable and social rent.

The group sold 287 shared ownership homes at a margin of 4.4%, a drop from 6.4% the previous fiscal year. 

Among its commercial non-core subsidiaries, Thirteen reported a collective loss of £900,000, compared to a £3.3m loss the year before.

The loss was mainly due to the cost of demolishing two high-rise properties. A spokesperson confirmed to Inside Housing that the two blocks are Fleet House and Thorntree House, both in Middlesbrough, which will be taken down this year. 

Since the Grenfell Tower tragedy in 2017, Thirteen has demolished five high-rise blocks: Jupiter House, Milford House and Portland House in Middlesbrough, plus Anson House and Hudson House in Thornaby.

Thirteen Homes, the group’s private housebuilding subsidiary, reported an operating loss of £800,000.

Gus Robinson Developments, the group’s construction company, which is being wound up, edged back into the black with a profit of £200,000. Thirteen made the decision to wind up the contractor in 2021 to focus on its core activities. It is now expected to be wound up by December 2026, the spokesperson said. 

Thirteen’s group cash reserves decreased from £104.6m to £20.1m in the year as the provider said it had used funding received in the 2023-24 Affordable Homes Guarantee Scheme for development. It said this was “in accordance” with its treasury strategy.

Thirteen is also stepping up retrofitting of homes and earlier this year secured a £30m loan from NatWest to decarbonise properties. 

The group’s net debt at year end reduced to £411.9m, down from £482.7m the year before, it reported. 

Thirteen currently has the regulator’s top grades of G1/V1/C1. It received its first consumer rating in March.