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Sovereign’s surplus jumps following merger

The UK’s sixth-largest housing association saw its surplus grow by £28m following its merger to form a 55,000-home association.

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Sovereign’s surplus jumps following merger

Sovereign’s surplus grew to £136m in the last financial year, according to its first annual report since its mega-merger with Spectrum.

It increased its surplus from £108m in 2015/16 (combining figures for Sovereign and Spectrum) and increased its turnover by 5% from £331m to £349m. Its spending was 8% less than the previous financial year, moving from £203m of expenditure to £184m.

Following a sector-wide trend, Sovereign’s own pension scheme was judged to be worth £6m less after a revaluation, adding further weight to suggestions that the upcoming revaluation of the Social Housing Pension Scheme, of which Sovereign is a member, will result in a significantly increased deficit.


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Ann Santry, chief executive of Sovereign, said: “The world is likely to remain uncertain and complex, especially with ongoing welfare reforms and as we exit the European Union – it was meeting these challenges that led us to create the new Sovereign.”

Genesis, on the other hand, whose merger with Notting Hill Housing has yet to take place, saw its surplus fall by £5m in the last financial year due to a drop in income from sales, its latest financial results have revealed.

The 33,000-home association blamed its drop in turnover from £334m to £264m on Brexit, saying it had made a conscious decision to limit its exposure to the sales market following the result of the EU referendum last year.

Home Group, meanwhile, grew its surplus from £85m to £87m at the end of a year in which the association was named on the Homes and Communities Agency’s delivery partner panel.

Mark Henderson, chief executive of the 55,000-home association, said: “The current political climate is sure to present new challenges for us as an organisation to grapple with. However, we have demonstrated our resilience in the face of such challenges in the past.”

Property and construction services company Kier also released its financial results this week, announcing an increase in its profits of 8%, up from £116m to £126m. The company has been reviewing its use of cladding since the fire at Grenfell Tower in June and says it has supported a number of clients in undertaking necessary repairs.

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