Mid Suffolk and Babergh district council-owned CIFCO reports £6m profit in 2021/22
A commercial property business owned by two local authorities made a £6 million profit last year, it has been revealed.
CIFCO, which is owned by Mid Suffolk and Babergh district councils, generated £3.75 million net income for the authorities.
Since CIFCO Capital Ltd was established in 2017 it has maintained its debt repayments in full and generated an additional £9 million in net income for the authorities.
In a report going before the councils’ joint overview and scrutiny committee next week, the company’s draft accounts for 2021/22 also show a £10 million increase in the value of company’s portfolio of properties – more than £3 million above their original net purchase price.
The last financial year marks the first full year of trading for CIFCO since completing the acquisition phase of the portfolio, which now comprises 21 properties split across industrial, retail and office sectors and based in the eastern region and beyond.
Despite fears the pandemic would leave CIFCO exposed, the company cites rigorous risk management and a diverse portfolio for helping it to weather the impact of Covid and collect a higher proportion of rent from tenants than the current industry average.
Sir Christopher Haworth, CIFCO chairman, said: “The last financial year has seen the beginning of the return to normality, following the unprecedented conditions of the previous year due to the pandemic.
"We have continued to work with our tenants to ease any ongoing problems and this has been reflected in strong quarterly rental recovery, well in excess of the market norm."
“A key focus for the board during the year has been to identify opportunities to improve the quality of our properties, to create rental income growth but particularly to improve the sustainability credentials of the portfolio.”
This has included the £460,000 refurbishment of units at an industrial estate in Harlow, including the installation of solar panels.
The board’s focus for the coming year is on increasing rental income and further improvements to properties within the portfolio.
Cllr Peter Gould, Mid Suffolk cabinet member for assets and investments, said: “It’s great to see CIFCO bringing in valuable, regular income to the council which, in turn, helps us to support our residents – enabling us to invest in local regeneration, economic growth and community support.”
Cllr David Busby, Babergh cabinet member for assets and investments, said: “CIFCO continues to generate money for the councils – providing steady and much-needed income for the benefit of both councils and our residents.
“Our communities are facing a cost-of-living crisis and need our services and help now more than ever. CIFCO is bringing in millions to help us deliver our services without reductions or cuts and without putting any further financial burden on our residents. The councils showed courage and ambition in creating CIFCO in the first place – and our faith in the expertise and prudency of the CIFCO board is now paying dividends.”
Following joint overview and scrutiny, CIFCO’s draft business trading and performance report will go before both full councils in July.