Luminus and Derwent Living takeovers drive Places for People growth

The unaudited figures for the six-month period to 30 September 2018 show a 20 per cent rise in operating ‘profits’ to £105.1m, from £87m in the same period in 2017, which the group attributes to its takeover of Luminus in March 2018.

Turnover – including joint ventures – rose from £396m to £422m and fixed assets increased from £4bn to £4.4bn.

Profits on sales of fixed assets – which includes items such as shared ownership staircasing and Right to Buy – increased from £8.4m to £16.2m.

Interest payable increased from £58m to £74m, with pre-tax profits seeing a 10 per cent increase to £49.7m.

The PfP group owns and manages more than 198,000 homes.

Organisations joining PfP typically become subsidiaries, retaining their brand and identity, with their treasury function transferred to the group. Both Luminus and Derwent Living were deemed non-compliant by the Regulator of Social Housing at the point of takeover.

After bringing 7,600-home Luminus into the group, PfP has streamlined the smaller association’s structure and paid down an existing loan with Nationwide, for which break costs were not disclosed at the time. Derwent Living, which manages 8,750 homes and is based in the Midlands, joined the group in December 2016.

PfP’s half-year statement to the London Stock Exchange said: “The group’s half‐year results show a year‐on‐year growth in operating profit driven by the introduction of Luminus to the group in March 2018. The group’s continued targeting of service and asset management costs has improved the operating margins year on year.

“The group’s strong results demonstrate the success of our integration of Derwent Living into the group, and the continued drive for efficiency and focus on operating margins.”

PfP is one of a number of housing associations with listed bonds that posts interim updates to the financial markets. PfP refers to profit rather than surplus in its financial reporting.