BRADFORD - Incommunities Limited, a significant Registered Provider of social housing in Yorkshire, has disclosed its unaudited financial results for the half-year period ending September 30, 2024. The organization, which oversees 22,836 properties predominantly in Bradford and Huddersfield, announced a net surplus of $5.7 million, surpassing the projected budget by 36%.
The improved financial performance, according to Incommunities, is primarily due to lower interest costs, reduced bad debt expenses, and savings on salary costs, along with increased revenue from property sales. The company also highlighted its regulatory upgrade to a G1 rating, indicating the highest governance standard, and retention of its V1 viability rating, suggesting strong financial resilience.
Incommunities' Key Performance Indicators (KPIs) show positive trends, with actual figures generally outperforming annual targets. The company's investment program has seen a year-to-date (YTD) spend of $8.4 million, with a commitment to enhancing tenant living conditions. The development program reported a YTD expenditure of $15.4 million, generating income from sales and grant funding.
The organization's liquidity position remains robust with $8.9 million in cash and $195 million in undrawn facilities. All funder covenants have been met, and refinancing efforts have resulted in an increased bank facility amount to $255 million, with an extended liquidity runway to October 2027. The cost of capital has been lowered, and the weighted average margin on the total facility amount has been reduced by 28 basis points.
Looking ahead, Incommunities has outlined a cautiously optimistic business outlook, despite a challenging economic environment. The company's new Corporate Strategy, launched in April 2024, focuses on homes, services, and communities, with customer experience at the core. Efforts to address damp and mold have led to a reduction in cases from 30% to 3% of properties.
Incommunities anticipates delivering 248 new homes with a spend of $49.5 million in the year and has planned investments in damp and mold remediation, sustainability programs, and component replacements. Regulatory and ratings updates are expected in early 2025.
The UK Government's recent announcement to allow housing associations to increase rents and its commitment to bolster housebuilding and grant funding is seen as favorable for Incommunities' financial plans. However, the development of new social housing remains challenging in the current economic climate.
This report is based on a press release statement from Incommunities and does not constitute investment advice or an endorsement of the company's financial position.
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