Social housing servicing group Connaught 'nears administration'

blueboy43

Really2 wrote: »

Falling asset prices + increases in debtors through recession = HA failing over.

It will be interesting how this pans out, I dare say some on here would like to see a fire sale. My money would be on another HA buying their assets off the administrators (providing the administrators can't sort it out before).

But it is interesting that this model for social housing is failing, are there many more like it in the same position.
Was right to buy & selling of housing stock actually the right thing to do to lower councils exposure to costs after all?

1) Its not a housing association.
2) A housing association is highly unlikely to wish to buy them.
3) Its not a model for social housing failing
4) Its nothing to do with right to buy or its legacy.

The real reasons.

1) Its accounting practices were highly aggressive. It booked profits faster than rivals would have done on long term contracts.
2) Likewise it deferred contract aquisition costs.

But most importantly.

On 8th July it predicted its year end debt would be £120m.
By the end of July it was forecasting that it would be materially above this number. It had bank facilities of £200m, and it is safe to say that it exceed these as well.

Financial management ineptitude on an epic scale

Generali

lynzpower wrote: »

If they go down, how much money wil the taxpayer lose in failed maintainence contracts? anyone know

Does the taxpayer pay in advance or arrears for such contracts? I would have thought that you'd get the work done first then pay for it. If so then losses should be only the cost of putting out some of the contracts for tender.

Presumably some of the contracts can be sold on by the receiver to other companies as assets.

Really2

blueboy43 wrote: »

1) Its not a housing association.
2) A housing association is highly unlikely to wish to buy them.
3) Its not a model for social housing failing
4) Its nothing to do with right to buy or its legacy.

The real reasons.

Yes I noted that 10 mins ago on post 9, but kind of you to point it out again.
But if it was, (like the article lead me to believe until further examination) the points may have been valid.

ILW

Generali wrote: »

That explains how they can have such a ratio of assets:workers!

The ratiok appears to be approx 1 worker per dwelling. !!!!!!?

Generali

ILW wrote: »

The ratiok appears to be approx 1 worker per dwelling. !!!!!!?

It's because they're not a HA at all but provide maintenance services to HAs. They don't own the houses.

julieq

On the other hand, the bubble in white van prices is about to UTTERLY COLLAPSE

blueboy43

Generali wrote: »

Unfortunately there will be a lot more companies going bust over the next few months and years due to budget cuts.

Fortunately the assets aren't destroyed when a company goes bust. The properties will be sold to maximise the return to creditors.

Maybe so, but this company is really nothing to do with budget cuts and is a pretty poor example to use.

Its "assets" (in a financial accounting sense) will be largely made up of goodwill and trade recievables.

It will have next to nothing in the way of property, land, vehicles, or stock.

The directors did manage to trousers a £300k bonus each on top of their £400k pay package last year.

I wonder what they would have got if they had been doing well.

Really2

Generali wrote: »

It's because they're not a HA at all but provide maintenance services to HAs. They don't own the houses.

I have changed the headline for the tread to include service. TBF as you can see from my thread I took it to mean they were a HA (even though I though it was odd that a HA was listed as they are usually non for profit).
On further inspection that is not the case, they are a service company.

Generali

blueboy43 wrote: »

Its "assets" (in a financial accounting sense) will be largely made up of goodwill and trade recievables.

It will have next to nothing in the way of property, land, vehicles, or stock.

Do the contracts to provide services have a value? Can they be sold on or do they lapse when the company goes bust and the HAs concerned do a new tendering process.

ILW

Generali wrote: »

It's because they're not a HA at all but provide maintenance services to HAs. They don't own the houses.

Even so, one worker per dwelling sounds rediculous. Why not just supply each tenant with a private handyman who doubles as a butler when no maintenance needs doing.