Large landlord sees surplus more than double after merger gain

Stonewater is in the process of taking on another small Surrey-based landlord, Mount Green Housing Association, as a subsidiary.

In its previous financial year, Stonewater reported a halving of its surplus, due to extra spending on maintaining and operating homes.

The group was also hit by increased maintenance and management costs in its latest year, which caused its overall operating costs to rise to £157.3m from £139.6m.

However, this was offset by a six per cent increase in turnover, to £239m, mostly due to higher rental income. 

Stonewater, which has homes in the South, Midlands and Yorkshire, reported a slip in its operating margin, excluding surplus on disposal of fixed assets, to 22% from 24%. This was due to higher operating costs, the landlord said.

The group completed 963 homes, up from 836 the year before. Among this, Stonewater completed its 5,000th home since it was formed in 2015.

Total debt – including loan facilities and bond debt – rose to £1.9bn, up from £1.7bn. Of this, £477m is undrawn debt.

Last month, Stonewater agreed a new £200m sustainability-linked loan.

In April, the group secured an extra £100m through a bank revolving credit facility and £71m from the Affordable Homes Guarantee Scheme.

In February, Standard & Poor’s downgraded Stonewater’s credit rating to A, with a negative outlook, based on its increasing investment in its existing stock and development.

The landlord retained a G1/V1 rating from the Regulator of Social Housing after a stability check last November.