Southern boss to step down after Optivo merger completes

Optivo’s chief executive Paul Hackett, who will lead the new group, said: “I’m very sorry to see Alan go but understand his reasons for wanting to move on at this stage.

“We’ve shared a vision of what the new organisation should look like from our very first conversation together and his drive, knowledge and leadership will be missed. Alan has a wealth of experience and I’m pleased he’s agreed to remain in post until we merge.”

The proposed make-up of the executive team for the merged group was announced in June. However following today’s news about Mr Townshend, Southern said changes to its new executive team will be “announced shortly”.

It came as the groups confirmed that both boards have approved the merger. 

The tie-up is expected to complete in “early 2023”, subject to lender consents, the groups said. The organisations had previously said they hoped to complete the deal by December. 

The new entity will be called Southern Housing despite the fact that the original Southern group has fewer homes than its fellow G15 partner. Optivo has around 45,000 homes.

In its last full year, Southern reported a 62 per cent drop in group post-tax surplus to £31m, despite a rise in revenue. However the figure was skewered by a £58.8m gain it made the previous year from its acquisition of Surrey-based housing association Crown Simmons. On an operating basis its surplus rose to £71.2m, compared to £61m the year before. 

Writing in its annual report, prior to his announced departure, Mr Townshend said the merger would give it “more financial resilience and improved local services for residents”.

Meanwhile, Optivo posted a 20 per cent jump in surplus to £108.3m off an increased turnover of £340m in the year to March 2022. 

In its annual report Optivo’s chair Sir Peter Dixon, who will hold the same post at the new group, wrote: “This is a different type of merger focused on impact, rather than expansion.”

He added today: “We believe in these very challenging economic times, we will be more financially resilient by joining forces."

The merger is Southern’s second attempt at a major tie-up in the space of 18 months. It announced plans to merge with Sanctuary in February last year, but the proposal was abandoned two months later.  

Last week it emerged that Sanctuary has stepped in to pursue a merger with troubled Essex-based housing association Swan. It came after Orbit’s planned merger with Swan collapsed.