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Riverside sees surplus soar 70% in latest results
Riverside Housing Association has seen its surplus soar by 70% from £28.8m to £49m as a result of acquisitions which have increased its social rented housing stock and rent rises, the group’s latest financial results have revealed.
The provider, which operates more than 58,000 homes, saw its turnover increase by 5.2% to £374.3m during the year to the end of March 2021.
The results come as Riverside engages in merger talks with fellow housing association One Housing.
Social housing lettings formed the bulk of Riverside’s revenues and increased by £15.4m during the year, with turnover from rents, including shared ownership and supported housing, rising from £303.5m in 2019/20 to £318.9m. Losses from voids rose slightly from £5.3m in 2020 to £6.7m.
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Total homes under management stood at 58,671 in 2020/21, up marginally from 58,360. New homes built during the financial year dropped slightly from 894 to 766.
Of the 766 new homes built, 357 were deemed affordable, 146 were for shared ownership and 270 were for market sale. A total of 17 homes remained unsold at the end of the financial year, down from 24 at the start of the reporting period.
In the financial statement, Riverside said: “Revenue from social housing lettings increased by £15.4m as a result of additional revenue from stock purchased at the end of 2019/20, and also the impact of the 1% rent increase.
“It was the increase in revenue that was the reason for the increase in both social housing lettings and overall operating margins.
“Surplus from outright sales and shared ownership was £0.4m less than the previous year.”
Operating margin rose by 4.4% to 19.8% in 2021. The operating margin for social housing lettings rose from 12.6% in 2019/20 to 17.5% in the latest financial year, above Riverside’s own target of 14.9%.
The increase in social housing margin was in part attributed to a reduced cost per home, which fell from £4,959 per home to £4,344. Riverside stated that the margin grew due to a £16m reduction in spending on major repairs, as well as savings of £6m on management costs and £3m on planned maintenance.
Rent arrears fell during the financial year, from £22.2m in 2019/20 to £20.3m in the latest results. Overall customer satisfaction stood at 75.1%, up from 72.2% in 2019/20.
The financial results are in stark contract to fellow G15 provider One Housing, with the two associations announcing plans in June to come “together in partnership” later this year.
One Housing’s financial results, released on 14 September, showed that its annual deficit had ballooned to £25.5m during the year.
In a statement, Carol Matthews, chief executive of Riverside, said: “We are managing our resources more and more effectively, and whilst our turnover has increased by 5%, after adjusting for the impact of pension exit fees, our surplus has risen by 6%, despite additional costs relating to the pandemic.”
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