East London association in talks to merge with non-compliant neighbour to create 13,000-home group

Poplar Harca holds compliant grades from the RSH, of G1/V2, with the viability score signalling that the association has “material financial risks that it needs to manage to maintain compliance”. 

With a credit rating of Baa2, and a negative outlook, it currently has the lowest Moody’s rating in the sector. This is one notch higher than the lowest rating – Baa3 – from the agency still considered to be ‘investment grade’. 

Social Housing has asked Moody’s whether it would consider the proposed merger to be credit positive or negative.

Poplar Harca, which manages around 10,100 homes, made the announcement last week that it was in discussion with its c.3,200-home neighbour over the potential partnership.

The group said: “By coming together, we want to create a better housing experience for residents and invest efficiency savings into new and existing homes, services and neighbourhoods.”

Residents are currently being asked their views as part of a six-week consultation, running until 7 August, and the boards of the respective organisations are expected make a final decision in the autumn.

Should the merger be agreed, Steve Stride, chief executive of Poplar Harca, would take up the role at the combined organisation, with THCH chief executive Anita Khan becoming deputy chief executive. 

THCH reported pre-tax surplus of £483,000 and operating surplus of £2.8m in 2022. Meanwhile, Poplar Harca reported pre-tax surplus of £6.4m and operating surplus of £37.3m – however the figures were impacted by a gain on disposal of fixed assets of £27m.