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Midlands associations agree merger
Midlands housing associations Longhurst Group and Axiom have agreed a merger that will see them deliver 100 extra new homes a year.
Shareholders have formally signed off the merger and 2,300-home Axiom is expected to join Longhurst Group, which owns and manages more than 19,000 homes, on 3 July.
The merger will allow the organisations to build 700 homes a year between them, with 60% of these affordable and 250 in the Cambridge and Peterborough area, where Axiom is based.
It follows a strategic review by Axiom which determined the association would need to merge in order to continue providing all its services over the long term due to pressures from welfare reform and the 1% rent cut.
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Longhurst Group’s turnover is expected to grow to £160m within five years through the merger, with the organisation targeting annual efficiency savings of £1.5m, or 2.5% of yearly turnover. It hopes to hit an operating margin of 30% as a result.
The landlord will not seek to refinance following the deal as it feels it has sufficient funds in place for several years.
Julie Doyle, chief executive of Longhurst Group, said: “From a Longhurst point of view we have not been out actually trying to court people but certainly are keen to go out where it’s helpful to both organisations and also to the customers.”
Alan Lewin, chief executive of Axiom, who will step down after the merger, said the landlord sought a partner to help enhance its services and not because it was in immediate financial difficulty.
He said previous work between Axiom and Longhurst Group as part of the Blue Skies Consortium, a development coalition of 14 Midlands housing associations, had been a “key driver” behind the partnership.
“We decided that actually we really wanted to work with a group structure rather than two organisations coming together, to help retain the integrity of Axiom,” Mr Lewin said.
