Turnover of Northern Ireland’s housing association sector has grown by 10% to nearly £283m in the past year, as revealed in the sector’s global accounts. The 2016 Sector Global Accounts review the financial performance of the 20 registered housing associations in Northern Ireland.
The figures, which reflect the impact of FRS 102 and the new Housing Statement of Recommended Practice (SORP) 2015, were unveiled by PwC at the Northern Ireland Federation of Housing Associations (NIFHA) Housing Finance Conference.
Financial headlines for 2015/16
- £283m turnover (up by 10%)
- £67m operating surplus (up 15%)
- £3.3bn asset base (increase of 7%)
- £769m cumulative private finance (up by 11% on 2014/15)
- Over £60m direct investment in local economy through wages
The global accounts highlighted that housing associations in Northern Ireland have increased turnover and operating surpluses in 2015/16. There was over £197m of housing capital additions in 2015/16 and a 4% increase in stock, with nearly 48,000 homes owned and managed by housing associations.
Operating costs have also increased, by 8%, making the positive turnover and operating surplus particularly encouraging as an indicator of the underlying strength of housing associations’ balance sheet. The sector’s growth set against these increased costs also points to greater operating efficiencies.
Turnover and operating surplus are above the sector average in Great Britain, with operating costs slightly lower.
Jennie Donald, Deputy Chief Executive of NIFHA, commented: “As social enterprises, housing associations reinvest surpluses back into the business. Therefore continued growth in operating surplus in 2015/16 means more money for key areas of activity such as the development of new social and affordable housing.
The significant additional borrowing by the sector reinforces those surpluses and adds to the funding available for new homes. Government wants to see 8,000 new social and 2,600 new affordable homes delivered by 2020; the positive financial position of housing associations, reflected in the global accounts, will support them in meeting those ambitious targets.”
Martin Pitt, Audit and Assurance partner at PwC, noted: “This has been another successful year for the housing association sector, but there are significant challenges on the horizon. The impact of Brexit, potential reclassification of the housing association sector and the implementation of welfare changes pose significant financial risk and a very different operating context.
However, the profitability margins of local housing associations are strong both at operating and net profit levels and this should place them in a good position to navigate some of the challenges ahead. The key financial ratios tell a positive story about the financial management and resilience of the sector and the sector’s growth looks to be sustainable.”