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HOUSING NEWS REGIONAL INNOVATIONS ROUND-UP
10 September 2010
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LOVELL SECURES CONNAUGHT HOUSING CONTRACTS
10 September 2010
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Construction and regeneration group Morgan Sindall, has announced that its affordable housing division, Lovell Partnerships, has reached agreement to acquire the majority of the ongoing contracts and related assets of the social housing division of Connaught, which went into administration this week.
The acquisition, which allows essential maintenance services to continue without interruption, will see around 2,500 employees connected with the ongoing contracts transfer to Lovell as part of the agreement.
A total cash consideration of £28m has been paid for the assets, which represents a discount to their net book value. The payment has been made from the group’s existing cash resources.
At June 30, 2010, Morgan Sindall had net cash of £138m and the group will continue to have a strong financial position following the acquisition.
The acquisition is consistent with Morgan Sindall's long-term strategy to achieve leading positions in its chosen markets.
The acquisition will significantly enhance Lovell's market leading position in the affordable housing sector and creates a national, full-service business delivering planned and reactive maintenance as well as new-build social and open market affordable housing.
The new contracts are expected to generate approximately £200m of additional annual revenue, split broadly between response maintenance contracts and Decent Homes, planned maintenance contracts.
Commenting on the acquisition, John Morgan, executive chairman, Morgan Sindall Group plc, said: "This is a step change for Lovell. The acquisition significantly increases the scope and scale of our planned and reactive maintenance activities and further develops our market leading position.
"Our focus now will be to ensure a smooth handover of the contracts and to minimise disruption to essential maintenance services. We look forward to working with our new and existing clients and to provide them with a high level of service, as well as protecting jobs on the contracts we are acquiring.
"Through the experience built up at Lovell over many years, we are happy with the terms on which we are acquiring these contracts. The board believes that this acquisition represents excellent value for our shareholders."
Lovell managing director, Stewart Davenport added: “This acquisition not only saves several thousand jobs but also significantly enhances our existing social housing provision, opening up huge growth opportunities for us in the responsive and planned maintenance markets.
“Lovell is a robust, financially strong business and our new local authority and housing association customers can be confident that their projects will be transferred seamlessly and completed successfully as planned.”
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ROGUE LANDLORDS MAKE TENANTS’ LIVES A MISERY
10 September 2010
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Many tenants continue to have their lives blighted by rogue landlords despite laws designed to protect them, according to a housing charity.
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Shelter said it found evidence that a minority of landlords in the private rented sector were mistreating their tenants, or letting out properties unfit to live in.
It said 90 per cent of environmental health officers who dealt directly with private tenants had encountered landlords who harassed or illegally evicted their tenants.
Nearly all of the environmental health officers said they came across landlords who persistently ignored their responsibilities, while 90 per cent encountered cases of severe damp or mould in properties in the past year, or electrical or fire safety hazards.
Half of the officers questioned said they thought the main reason private landlords let unsafe properties was to make as much money as possible, while the same proportion believed problems in the sector would get worse next year.
Six out of 10 environmental health officers also said more than half of the cases they dealt with involving rogue landlords also involved people from vulnerable groups.
One officer said he visited a property which had no heating, hot water or electricity.
Another officer was involved in a case where a mother and her young child lived in a property with no kitchen facilities, no fire precautions and only a halogen heater to heat the whole property.
But despite the problems they encountered, 51 per cent of environmental health officers said a lack of staff was preventing them from prosecuting more rogue landlords.
Campbell Robb, chief executive of Shelter, said: "It is simply not acceptable that people are handing over their hard earned cash to live in houses that are run-down, squalid and in some cases even dangerous.
"With more and more people set to become private tenants in the future, it is absolutely vital that we expose and drive out the worst offenders in the private rented sector.
"Government needs to wake up to the reality of the problem and work with councils to develop a tough programme of action to root out rogue landlords."
He said the minority of landlords who broke the rules should be prosecuted and struck off immediately to prevent anyone else being exploited in the future.
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BARRATT WARNS OF MORTGAGE SHORTAGE THREAT TO HOUSEBUILDING
10 September 2010
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Housebuilder Barratt Developments has warned a lack of mortgage finance available to would-be homeowners continued to threaten the industry.
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While the group said conditions in the housing market have steadily improved over the year, it added the number of buyers and sellers was still "extremely low" by historical standards.
Barratt, the UK's largest house builder by volume, said market conditions forced it to build fewer sites, which would do "little to address the nation's fundamental housing shortage".
The warning came as the firm posted a pre-exceptionals loss of £33 million in the year ending June 30, up from a £144 million loss last year, and marginally up on analyst expectations for a £38 million loss.
The company, which trades as Barratt and David Wilson homes, said it benefited from a 10.9 per cent rise in its average selling price to £174,300 over the financial year, primarily due to a move away from flats to houses.
But the firm also reported a slow down in trade in the 10 weeks since the end of the financial year, with net private reservations down - though this is in line with seasonal trends.
Looking ahead, chairman Bob Lawson said economic uncertainty may influence the company's future.
He said: "The key restriction on the industry remains the availability of mortgage finance.
"Whilst there was some improvement during the year, the lack of availability of suitable higher loan to value products continued to restrict the new build sector where customer deposits have traditionally been lower.
"With demand continuing to be constrained, the industry responded by opening fewer sites and controlling stock better.
"Whilst the improved balance between supply and demand has stabilised prices, it has done little to address the nation's fundamental housing shortage which in the longer term will underpin the sector's growth."
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RIXONWAY KITCHENS COOKS UP POSITIVE RESULTS
10 September 2010
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In a challenging year for companies working in the social housing sector, Rixonway Kitchens has bucked the trend to report a record financial performance.
Dewsbury-based Rixonway, the only UK kitchen manufacturer working solely in the affordable and social housing sector, has seen its revenues increase by 23 per cent in 2009/10 to £29m, and EBITDA (Earnings before interest, tax, depreciation and amortisation) rose by more than 30 per cent from the previous year’s record performance of £4.2m.
Paul Rose, chief executive, said that continuous investment in technology to drive efficiency and enhance service delivery is among the key ingredients of the company’s success.
He explained: “Our customers expect high quality products and service and we constantly review our offer to ensure we remain ahead of our competitors. A key factor in our growth is our ability to react quickly to customer requests and market changes; we have been successful in finding differentiators to set us apart from the competition.
“Despite undeniably tough times in the economy in early 2010, we have continued to grow the business over the first and second quarters securing a significant number of new long term contracts particularly in London and the South East.
“Clearly we will have to wait and see the full details and extent of 'austerity measures' in the public sector but we have factored reductions in spending into our forecasts for the business and believe we are well placed to continue to grow our market share.”
Formed in 1978, Rixonway manufactures in excess of 12,000 rigid kitchen units per week, from its 170,000 sq ft, modern manufacturing facility in Dewsbury. Over the last two years the business has continued to recruit more staff and currently employs in excess of 400 people with a nationwide team of 40 on site designers.
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ALMOST ONE IN FIVE HOUSEHOLDS IS WORKLESS
10 September 2010
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No-one works in almost one out of five households across the UK, according to new figures published by the Office for National Statistics.
The latest work and worklessness figures reveal that there are 3.9 million UK households where no adults work, an increase of 148,000 on last year, with 1.9 million children living in workless households.
The North East has the highest percentage of workless households with 24.3 per cent of homes in the region; this is closely followed by Inner London and Wales at 22.9 per cent. The South East has the lowest number of homes where no one works at 14.2 per cent.
Minister for Employment, Chris Grayling said: “These figures are a further indictment of how the current system is failing families and is a shocking reflection of the scale of worklessness across the UK that this Government has inherited.
“Some areas of Britain are suffering from intergenerational worklessness, which is why we must act now to ensure that children living in workless households are not left behind like their parents have been.
“This is why we are pushing ahead with our Work Programme, which will give people who are out of work and need a job the right support at the right time so that they can get into employment.”
The Work Programme will offer personalised support to people on a range of benefits, including Jobseeker’s Allowance, Income Support, Incapacity Benefits and Employment and Support Allowance.
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