Firm considering launching new funding model for eco-friendly retrofit of homes
Contractor and developer United House is looking to take advantage of the government’s Green Deal retrofitting programme as the repairs and maintenance market becomes increasingly competitive.
The firm, which reported an £11.6m pre-tax profit for 2010 on Monday, is considering launching a new funding model for eco-friendly retrofit of homes early next year.
Jeffrey Adams, United House chief executive, said the firm is looking to form a partnership with suppliers and social landlords to retrofit homes in the public and private sectors. Under the plan, the partnership will borrow against future income from the government’s feed-in tariff given to householders generating green electricity, in order to fund Green Deal improvements to homes.
Adams said: “It is a partnership; we both put cash into the deal, they collect cash and we do the work,” he said. “We have had quite serious discussions with the banks about how we structure this.”
However, he said the move needed a change in legislation, thought to be to regulations surrounding the 2008 Energy Act, to allow the feed-in tariff to be paid into the fund rather than to the householder.
Adams said the move came as traditional markets had weakened: “In a lot of the traditional markets we were in [such as social housing repairs and maintenance] prices have dropped dramatically and people tender below costs. It is an area where we are very careful about how much we get involved. We have to add value and one way to do that is to finance it.”
Adams said that the outlook for the social housing sector is “uncertain” in the face of severe government funding cuts. But he said the cuts would create opportunities for his business to build homes through deals with councils where local authorities offered free land.
Results for 2010 showed a drop from £15.1m to £11.6m in profit before tax. Investment in new sites and a competitive market pushed down profits, the firm said.
Turnover rose by over £9m in the 10-month period reported on.
United House in numbers
Group turnover £168.8m (2010) ; £159.6m (2009)
Profit on ordinary activities before taxation £11.6m (2010); £15.1m (2009)
Net cash/debt £8.9m (2010); -£24m (2009)
Net operating cashflow £31.5m (2010); £16.9m (2009)
Secured work pipeline approx £250m for 2012-2013; over £200m for 2010 -2011