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07
May
Council housing company set to report £3 million loss
North Yorkshire Council’s housing company is set to report a loss of £3 million for the last financial year.
Brierley Homes, which was founded in 2017, is part of the Brierley Group of 12 companies owned by the council.
The company has built homes in locations including Woodfield Square in Harrogate, North Road in Ripon, The Paddocks in Great Ouseburn and Yew Tree Farm in Marton-cum-Grafton.
However, according to a council report on the firm’s finances, Brierley Homes is set to report a loss of £3 million for the 2024/25 financial year.
The report, which is due before the authority’s shareholder committee on May 13, reports that the company recorded a loss of £2.1 million for the third quarter of last year.
It said the figure was largely driven by “delays in the receipt of sales income” and “associated increases in the company’s financing costs”.
The report adds that the company’s outturn for the year is now expected to see an additional loss of around £1 million due to delays in sales income — which is partly due to issues at sites in the Harrogate district.
It said:
The delayed sales are in part due to extended defect works on three plots at the Marton Cum Grafton development and extended design issues at The Paddocks, Great Ouseburn site.
It comes as the council approved an extension of a loan facility to £25 million for Brierley Homes in April.
The loan facility was introduced in March 2018 as a means of funding the firm to construct and sell homes.
In February 2020, the company exercised its ability to draw upon the loan facility and was approved £22.9 million to construct and sell homes.
But, in April this year, the council made a decision to extend the facility to £25 million.
In a decision notice, the authority said it had “become necessary” for the maximum loan amid delays in the firm’s construction process.
In its report to the shareholder committee, the council said the company was “refining the profile of sales and construction” while trying to stay within the agreed limits of the loan facility.
It said:
Brierley Homes are investing significant time into refining the profile of sales and construction at new sites in order to determine the optimum level of shareholder value and wider shareholder benefits; whilst staying within the agreed NYC loan facility and ensuring profiling is realistic in terms of project delivery and cashflows.
The Brierley Group as a whole is projected to record a pre-tax profit of £2.63 million for the year.
The Stray Ferret will provide more details of the group's overall performance in a separate article soon.
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