A2Dominion has seen its surplus tumble by more than 40% in the first half of 2020/21 compared with the same period last year.
A2Dominion’s surplus dropped from £20.3m in the first six months of 2019/20 to £11.8m in the same period of 2020/21 (picture: Getty)
The 38,000-home landlord, which is part of the G15 group of London’s 12 largest housing associations, said it took a financial hit due to declining private sale completions and its student rental operation being behind budget.
Overall, the group’s surplus dropped from £20.3m in the first six months of 2019/20 to £11.8m in the same period of 2020/21 – a fall of 41.8%.
A2Dominion said a drop in turnover from £168.7m to £151.3m was primarily due to lower sales volumes, which reduced from £40.5m to £16.1m.
Sales were budgeted to be lower than last year, it added, but this side of the business “has been further impacted by the pandemic, with some schemes’ build programmes extended out until later in the financial year or next financial year”.
A2Dominion noted its rental income remained steady and increased 1.7% year on year but is below budget due to waived rents at its student accommodation during the first quarter of the year as a result of the pandemic.
In April, following a backlash, the association backed down over its plan to continue charging rents for its student blocks despite universities closing their doors because of COVID-19.
The pandemic also hit A2Dominion’s development pipeline, it said, although it still expects to complete 1,122 homes by the end of the year, a marked increase on the 415 completed in 2019/20.
The results come just days after ratings agency Fitch Ratings downgraded the landlord, citing a “deterioration of A2Dominion’s financial profile”.
A2Dominion said: “The coronavirus pandemic has made the past six months a challenging environment in which to operate.
“The group has felt an impact from the pandemic on the financial performance of some areas of the business; private sale completions and student rent in particular being behind budget expectation for the six-month period, which has impacted the group’s overall financial performance.
“Sale reservations have remained strong, but sales have been affected by some delays in the practical completion of homes in development.”