Aster posts half-year profit driven by strong sales

This came after Aster’s 2022-23 financial results showed a strong sales performance, with sales of shared ownership homes and open market homes rising from 540 in 2021-22 to 560 in the year to 31 March.

In its half-year update, the housing association said it continues to see “high demand” for shared ownership properties, with first tranche sales of £28m for 215 units in the six-month period at an average sales percentage of 42 per cent.

“Other asset sales are performing slightly behind budget for the period due to a budgeted acceleration in our void disposal programme, which we should see catch up in the next six months,” Aster said in its results.

“We have seen a slight downturn in staircasing sales, with levels back to those seen before the COVID-19 pandemic.”

Despite posting a surplus, Aster has increased its level of repairs and maintenance spend and still developed 533 homes.

“During the last six months of the March 2023 year we saw additional investment in our stock following the initial outcome from our stock condition survey, as well as from investment in Enham Trust post-acquisition, and the usual increase in demand for response repairs throughout the winter months,” Aster said.

“We will continue to face cost challenges across the business, with an increased level of maintenance and repair spend expected throughout the winter, as well as an uptick in the planned investment programme in the second half of the year.”

Development

In the first half of 2023-24, Aster completed 533 homes, comprising 496 affordable homes and 37 homes developed with its joint venture partner. This was a drop from 685 affordable homes in the same period last year.

Aster said it has a “strong pipeline” of schemes and has been successful securing both land-led and developer-led opportunities, adding to its contracted pipeline of 3,069 homes.

As at 30 September, the group had also completed 94 shared ownership homes, available for sale, of which 49 were reserved.

Aster said there has been a “strong start” to the year with 45 per cent of homes completed at this mid-point of the financial year, having completed on its first affordable homes funded through the Homes England strategic partnership programme.

Aster has renegotiated this partnership delivery with Homes England, resulting in an increase of grant, totalling £127m, to deliver 1,500 affordable homes up to March 2028, the landlord added.

“Development delivery continues to be challenged through planning delays including water neutrality solutions and a slow-down in build on house builder sites to reflect sales,” Aster said.

“Aster’s contractor framework will be announced shortly to support our land-led delivery across our programme.”

This comes after the group delivered a record 1,312 homes in 2022-23.

Elsewhere, the results showed that net debt during the period increased from £1.03bn in the first half of 2021-22 to £1.16bn in the six months to 30 September 2023.

Over the same period, liquidity rose from £396.8m to £608m and gearing increased from 48.6 to 51.8 per cent.

There were no changes to the board during the six-month period to 30 September 2023 but, from October, new hires Stephen Trusler and Mehul Desai became non-executive directors.

Mr Desai, who is currently chief of staff to HSBC’s UK chief operating officer, has replaced Andrew Kluth, who stepped down at the end of his nine-year term.

Meanwhile, Mr Trusler, who has more than 40 years of experience in the housing sector at an executive and non-executive level, also took over as chair on 3 November. He replaced Mike Biles, who stood down at the end of his term.

Mr Trusler has previously been one of Aster’s non-executive members, and formerly chaired its remunerations and nominations committee.