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Places for People reports boosted turnover in 2016/17
One of the UK’s largest housing associations raised its turnover 29% to £795.1m last financial year, as it completed a merger with an 8,700-home provider.
Places for People, which owns and manages just over 60,000 social homes, reported the boost in income from £616m in its financial statements for 2016/17, published today.
The organisation reported profits of £119.7m for the period, which included a one-off exceptional item of £41.4m as a result of its merger with Derwent Living, completed in January.
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Total costs of £636m gave the organisation an operating margin of 19.9%, which is below the average for the sector of 27%.
Places for People has a far more diverse operation than most UK housing associations, with a property management business which manages more than 90,000 homes; a retirement business; a fund management arm; and a leisure centre chain which manages 116 facilities.
The addition of Derwent Living to the group also adds a sizeable student accommodation business to its portfolio, with Derwent Students the third-largest provider of student accommodation in the UK.
The group turned over £314m (39.5% of its total income) from its housing association business, with an operating profit of £120.8m. It raised £234.2m from the development of non-social housing, with its leisure business turning over £136.5m.
It is a non-profit organisation with all surpluses reinvested in the business.
In the year, it spent £187m on new homes, building or acquiring 1,519, up 35% from the previous year. Of these, just 20% (312) were of tenures considered affordable.
The group plans to build 16,000 new homes in the coming years, including a joint venture with Balfour Beatty to construct 1,500 new homes in the Olympic Park in east London and a partnership with Aberdeen City Council to build up to 3,000 new homes, as well as other major projects.
David Cowans, chief executive of Places for People, said: “We are buoyed by the continued success of our diversification strategy and remain very confident in the strength of this approach, which helps us to continue to report strong results year-on-year.”
The accounts said Mr Cowans earned £580,000 in the year, a rise of just under 10% from £530,000 the year before. Mr Cowans has been the best-paid chief executive in the sector for several years.
