Stonewater’s pre-tax surplus plummets but turnover up to £306m

Stonewater’s annual report said: “The group has faced a particularly challenging year, with our financial position affected by continued economic pressures and sector-specific challenges.

“Despite some improvement in the wider economy, we have experienced persistently high operational costs and increased investment to ensure our homes are safe and meet new regulatory standards.”

The group’s operating costs were £216m, an increase of around £29m on the previous year, mostly because of a rise in repairs and maintenance jobs, investment in its homes and spending on its transformation programme to boost future efficiency.

The landlord’s operating margin, excluding surplus on disposal of fixed assets, was broadly the same as in 2023-24, at 18.9%.

Stonwater also grew its rental income by 17.5% after taking on 1,029 new homes, adding 75 properties from Bristowe (Fair Rent) Housing Association and increasing rents by 7.7%.

Stonewater said its surplus will be “reinvested into our development programme, digital transformation, and delivering high-quality services for our customers”.

Its total comprehensive income for the year was nearly £17m after accounting for actuarial gains on pension schemes and year-end revaluation of financial instruments.

The group’s liquidity “remains strong” and its net assets rose by nearly £17m, according to the report.

It recorded an overall customer satisfaction with services of 85.7%, above its target of 84%.

Jonathan Layzell, chief executive of Stonewater, said: “In a year marked by economic pressures, regulatory change and greater scrutiny across the sector, we’ve responded with focus and resilience.

“Strong governance, sound financial management and a deep commitment to our customers have underpinned everything we’ve done.

“We continue to reinvest our surplus into improving existing homes, building new ones and supporting customers to thrive.

“Our ambition to grow to 50,000 homes by 2030 is well under way, supported by strong partnerships such as those with Mount Green and Greenoak, the latter of which helped establish our centre of excellence for zero-carbon innovation.”

Last November, S&P Global downgraded Stonewater’s credit rating from A to A-, though its outlook remained stable.

In July, it secured a £75m loan from the Royal Bank of Scotland to meet its goal of building 1,500 new homes per year.