The directors present the strategic report for the year ended 31 March 2024.
Nuplace Limited was incorporated on 1 April 2015. Nuplace is a wholly owned subsidiary of Telford and Wrekin Council, limited by shares.
The principal activity of the company is the procurement of the construction and management of private and affordable residential property for rent, responding to the Borough’s housing needs including the availability of accessible and adaptable housing. In addition, the company aims to:
Raise the standard of rental provision, both in terms of the quality of the rental homes and the landlord service.
Deliver added value and stimulate local economic growth through supply chain engagement, offering skills and employment opportunities and working with the community.
Develop brownfield and stalled sites in order to deliver widespread regeneration benefits.
Telford & Wrekin homes, a sub brand of Nuplace, focusses on refurbishment and aims to invest in and protect existing housing stock through high quality renovations, which help to address issues of poor housing in communities.
Raise standards in the private rented sector across the Borough of Telford and Wrekin through demonstrating high quality property and tenancy management on a broader geographic scale.
Provide a “home for life” for tenants with a focus on providing housing options for a range of priority client groups, including for example care leavers and people providing low level care, key workers, young people and veterans.
The company is financed by Telford and Wrekin Council, through a combination of equity in the form of share capital and debt finance.
Nuplace’s housing portfolio now comprises of 500 homes of which 65 are available to let at affordable rents, 19 are built to accessible standards, and 52 have been built to meet the new Building Regulation requirements regarding low carbon design with Nuplace also now having completed their first 4 properties to Future Homes Standards.
The programme has resulted in over 23 acres of brownfield land being regenerated, addressing sites that might otherwise blight communities, with a further 37.66 acres currently being regenerated at Wild Walk, Donnington. The programme is also delivering added value in terms of local employment, apprenticeships, supply chain development and the delivery of a range of community projects.
Nuplace’s growing portfolio now provides a range of homes across the Borough with houses available within North and South of Telford, including properties in Newport, with circa 1,350 people living in properties across the eleven sites.
During the year, works progressed on the scheme at The Gower, St Georges, with the construction of 10 new build properties alongside the creation of 3 converted dwellings within the grade 2 listed building, now well underway. Works have also continued at Wild Walk, Donnington, with 10 of the 66 plots now having been tenanted with the remaining plots to be handed over in phases throughout the next financial year. Works also commenced on 20 dwellings at the former New College site in Wellington, with these being developed alongside designated older people’s housing being delivered by the Wrekin Housing Group.
Works also commenced to create 10, one and two bedroom apartments through the conversion of redundant first floor ancillary space above commercial units, as part of a wider regeneration scheme in Oakengates.
Funding was secured from the West Midlands Combined Authority to support the delivery of 28 homes, at a site in Ketley Bank, Telford including 7 converted dwellings alongside 21 new build. This project is set to start on site in April 2024 and will help safeguard a building of historical significance on a prominent site within the locality.
Planning consent was granted for a mixed use scheme within the Station Quarter area of Telford Town Centre which will see the delivery of 117 town houses and apartments for Nuplace, kick-starting the creation of a “city living” offer within Nuplace’s predominantly suburban portfolio. Works on this scheme are set to start on site in July 2024 and continue until early 2026 and will be delivered alongside 72 dwellings for affordable rent and shared ownership.
A planning application has also been submitted to convert redundant space within a historic building in Wellington into 9, one and two bedroom dwellings with works due to start on site late in the year. In addition, there is a strong pipeline of properties at feasibility stage as part of the ongoing Telford and Wrekin Homes Programme with Nuplace completing the acquisition and refurbishment of 5 additional properties within the year.
Rental income for the year totalled £4.1m (£3.9m; 2022/23), the increase representing the rental incomes from the Telford and Wrekin Homes portfolio. Rent levels increased across the portfolio in February 2024. Void levels reduced to 1.42%, (1.91%; 2022/23). Consistently high levels of customer satisfaction were demonstrated in the Nuplace tenancy survey completed in December 2023, with 96% of respondents confirming they would recommend Nuplace to friends and family.
The Company has continued to work with its tenants to offer support where there may be difficulties in making rent payments, and has closely monitored overdue debt and ensured appropriate payment plans are in place. Despite this bad debt has risen within the year with legal action now being taken in order to secure recovery wherever possible. The cost of managing the growing portfolio has increased in the year due to inflationary pressures in the economy.
Securing viability for schemes at the pre-construction stage has continued to be challenging given cost escalation for construction works coupled with high interest rates. This has however been compensated to a certain extent through rental increases and grant secured against schemes, enabling a number of projects to move into the construction phase. Viability appraisals for future sites will continue to be reviewed over the forthcoming year.
The Directors acknowledge that ongoing asset maintenance will be required to the investment properties, however, a provision in the financial statements has not been possible due to accounting standards requirements. The cost of asset and site maintenance in the year increased to £527,000 (£407,000; 2022/23) which is included in the cost of sales in the financial statements. A large proportion of this increase was attributed to one-off planned maintenance required to remediate gardens to rectify issues associated with drainage, works to remove damaged trees and those affected by ash dieback as well as other identified planned maintenance including door painting, carpet replacement, redecoration and statutory gas and electrical inspections. The Directors will ensure suitable reserves are held in order to meet asset maintenance obligations.
In accordance with the company’s accounting policy, the housing portfolio was revalued at the year end, with a net increase in value of £4.7m or 5.41% across completed units. The company has reported an operating profit before interest and taxation for the year ended 31 March 2024 of £2,717,169 (2022/23: £2,762,409). The company capitalises interest on loan finance during the site’s construction period, following which, interest is charged to the profit and loss account upon practical completion. In line with this policy, the company has incurred interest charges on the year’s profit of £2,371,394 (2022/23: £2,235.453). The company reported an operating profit after interest and taxation of £256,487 (after allowing for the increased rate of Corporation Tax) for the year (2022/23: £315,923). During the year the directors declared a final dividend of £0.0115p per ordinary share registered on 1st March 2024 totalling £253,300.
The investment outlined in this report will require additional funding to be drawn down from the shareholder in the form of further loans and equity. Nuplace continues to explore opportunities for further expansion with a number of pipeline sites currently under review.
On behalf of the board
Nuplace Limited is a private company limited by shares incorporated in England and Wales. The registered office is Legal Services, Darby House, Lawn Central, Telford, Shropshire, TF3 4JA.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Investment properties are valued by MRICS Registered Valuers and is an estimate of market value at 31 March 2024. Other estimates have been identified in the forms of accruals, prepayments and bad debt provisions. These are not classed as significant.
Directors of the company received no remuneration or benefit over the year 2024 - £nil (2023 - £nil).
The Directors are employees of the parent organisation.
Included in additions is capitalised interest of £127,227 (2023: £85,434) on the cost of construction. The total value of capitalised interest included within tangible fixed assets and investment properties at the year end is £1,966,094 (2023: £1,838,867).
Nuplace Limited's property assets were valued on 31 March 2024 by internal valuers, Dawn Toy MRICS and David Scrimgeour MRICS, both Registered Valuers of Telford & Wrekin Council.
The valuations were carried out in accordance with the Standard terms of Engagement, detailed in Appendix 2 of the valuation report, CIPFA and the RICS Valuation - Global Standards and RICS Global Standards - UK National Supplement (the Red Book) and the International Valuation Standards (IVS), applicable at the valuation date. The valuation of each property was on the bases of Fair Value, which equates to Market Value and assumes that they would be sold subject to the Special Assumptions listed below. The valuer's opinion of Market Value was primarily derived using the comparables method as there was good evidence of previous sales on arm's-length terms.
Special Assumptions:
There would be no bids from Special Purchasers.
It is assumed that the interests being valued can be offered freely and openly in the market for non-specialist property, and based on existing use for specialist property.
There are no past changes in the physical aspects of the property or asset where the valuer has to assume those changes have not taken place.
All impending or proposed changes in the physical circumstances of the property, for example a new building to be constructed, were ignored.
There were no anticipated change in the mode of occupation or trade at the property:
- Planning consent has been, or will be, granted for development (including a change in use) at the property. The impact of any conditions which may be imposed have also been considered.
- A building or other proposed development has been completed in accordance with a defined plan and specification.
- The property has been changed in a defined way (e.g. removal of process equipment)
- The property is vacant when, in reality, at date of valuation it is occupied.
- That a specific contract was in existence on the valuation date which had not actually been completed.
- It is let on defined terms when, in reality, at the date of valuation it is vacant.
- The exchange takes place between parties where one or more has a special interest and that additional value, or synergistic value, is created as a result of the merger of the interests.
Damaged property:
- Treating the property as having been re-instated when it has not;
- Valuing as a cleared site with development permission assumed for the existing use; or
- Refurbishment or re-development for a different use reflecting the prospects of obtaining the necessary development permissions.
It is assumed that there were no alterations and improvements to be carried out under the terms of a lease.
Details of actual or anticipated market constraints were agreed and included in Standard Terms of Engagement.
If a property cannot be freely or adequately presented to the market, the price is likely to be adversely affected.
If an inherent constraint exists at the valuation date, it is normally possible to assess its impact on value.
For inherent constraints that did not exist at valuation date, but is a foreseeable consequence of a specified event, will be treated as arising on valuation date.
Any Special Assumption that specifies a time limit on disposal must state the reason for the time limit.
A financial instrument is valued using a yield curve that is different from that which would be used by a market participant.
Projected values rely wholly on Special Assumptions and may include assumptions such as the state of the market in the future, yields, rental growth, interest rates etc. The assumptions must be:
- In accordance with any applicable national or jurisdictional standard;
- Realistic and credible; and
- Cleary and comprehensively set out in the report.
Lotting Assumptions:
It is assumed that there are no physically separate properties that are occupied by the client where there is a functional dependence between the properties.
No account made where ownership of a number separate properties would be of particular advantage to them as a single owner.
Where physically adjoining properties that have been acquired separately by the entity for site assembly for future development/regeneration purposes, the proposed development scheme will be used as the basis of valuation for the assembled site(s).
No account made where individual properties are used collectively or are an essential component of the entity's operation.
No record of any groups of properties that should not be valued together.
Properties valued as individual dwellings, with the assumption that any sales would not flood the market.
No account taken of other facilities related to site, such as attenuation features.
Included in other creditors are secured loan facilities with Telford and Wrekin Council. These facilities are secured by the investment properties per note 5.
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
A grant of £1,008,336 was received from Telford and Wrekin Council in 2017/18 for the construction of 33 affordable units for rent at Springfields, Newport. The terms of this require Nuplace to hold the units as affordable, subject to repayment should the units cease to be held as such. The grant is released to the profit and loss account over the useful life of the units.
An additional grant of £460,000 was received in 2022/23 from the West Midlands Combined Authority for the construction of 46 units including 11 affordable units at Southwater Way. The terms of this required completion of the units by 31 December 2022 and this condition was met. The grant is released to profit and loss over the useful life of the units.
At 31 March 2023 the company entered into a number of contracts for the development and acquisition of fixed assets estimated to cost £7,842,510 (2023: £10,746,790).
The company has previously entered into loan agreements for secured loan facilities of up to £40,000,000 and up to £5,000,000 respectively with Telford and Wrekin Council. In the previous year, the Telford and Wrekin Council extended a further £10,000,000 secured facility. At the year end the company had drawn down £50,175,742 (2023: £44,832,334). Interest of £2,371,394 (2023: £2,320,886) had been charged by Telford and Wrekin Council. The loans are interest only and repayable at the end of their term.
The company purchased £1,078,994 (2023: £980,328) of services and acquired properties to the value of £Nil (2023: £2,028,000) from the Telford and Wrekin Council.
The total amount due to Telford and Wrekin Council at the balance sheet date is £51,274,601 (2023: £45,265,070).