News12.09.22by James WilmoreFor-profit Sage Homes, owned by private equity giant Blackstone, has reported annual losses at both its entities despite an 85% jump in the number of shared ownership properties sold. Picture: Getty SharelinesFor-profit provider Sage Homes has reported annual losses at both its entities despite an 85% jump in the number of shared ownership properties sold #UKhousing One entity, Sage Housing, which takes most of its income from shared ownership, recorded a loss of £17.1m compared with a loss of £26m the previous year. Turnover in the year to the end of December 2021 jumped 85% to £174.3m.
However, operating costs rose 38% to £40m as the group took on more staff and invested in improving customer service. Cost of sales nearly doubled to £125.9m.
Writing in the provider’s annual report, John Goodey, chief financial officer at Sage, said the latest loss was smaller than planned, without offering more detail.
Of its turnover, £158.8m was from shared ownership first tranche sales, with 1,404 homes sold compared with 758 last year. Costs meant the operating profit from sales was £32.9m. Sage Housing also operates 1,051 social and affordable rent homes. These recorded revenue of £15.6m, but produced an operating loss of £7.9m due to costs. On an operating basis, Sage Housing’s profit was £9m compared with a loss of £1m the previous year.
Mr Goodey said this “reinforces Sage’s near-term path to future net profitability”.
Its overall operating margin was 5.1%, but is targeting a margin of 16.5% in the current year.
Mr Goodey added: “As Sage grows, we are focused on increasing our operational efficiency.”
Overall, Sage Housing said it delivered 3,287 new homes last year – up 52% on the previous year. It has delivered 7,294 homes so far. A separate entity, Sage Rented, which operates 3,321 affordable and social rent homes, saw its loss widen to £4.4m on a revenue of £13.4m as interest costs from loans increased.
“We anticipate this to improve next year with a larger rental base in place for the full year,” said Mr Goodey.
Sage Rented acquired 1,712 homes from Sage Housing last November.
Sage secured £73.5m in grant funding last year through the government’s Affordable Homes Programme.
The group, which was launched in 2017, had been looking to partner with housing associations, and last year signed a £107m deal with G15 landlord Optivo. It also struck a deal with housebuiding giant Taylor Wimpey in July.
Sage aims to deliver 30,000 new homes by 2030.
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