Decision

Current regulatory judgement: Curo Group (Albion) Limited (15 November 2023)

Updated 15 November 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Curo Group (Albion) Limited
• Regulatory code: LH4336
• Publication date: 15 November 2023
• Governance grade: G1
• Viability grade: V2
• Reason for publication: Viability regrade
• Regulatory route: Stability Check and Reactive Engagement

Regulatory judgement

This regulatory judgement regrades our previous published assessment of Curo Group (Albion) Limited’s financial viability from V1 to V2 and confirms its existing G1 grade for governance.

The regulator has assurance that Curo Group (Albion) Limited (Curo) continues to comply with the financial viability elements of the Governance and Financial Viability Standard and that its financial plans are consistent with, and support, its financial strategy. Curo has an adequately funded business plan, sufficient security, and is forecast to continue to meet its financial covenants.

Curo is increasing investment in existing homes which is weakening its interest cover and reducing headroom on funder covenants. Curo’s development programme includes receipts from outright sale which exposes it to housing market risks. These factors, set in the context of economic pressures including inflation and interest rates, impact on Curo’s capacity to respond to adverse events.

The regulator’s assessment of Curo’s compliance with the governance elements of the Governance and Financial Viability Standard remains unchanged. On the basis of the Stability Check, the regulator has concluded that there is no evidence to indicate a change to Curo’s current governance grading.

Other providers included in the judgement

Curo Places Limited

About the provider

Origins

Curo is a community benefit society and provides affordable homes and support services.

Registered Entities

Curo is the registered parent of the group. It has one registered subsidiary, Curo Places Limited, which holds the group’s stock.

Unregistered Entities

There are five unregistered entities in the group:

• Curo Enterprise Limited, a development company building homes for the group and for open market sale;

• Curo Choice Limited, a specialist support business;

• Curo Market Rented Services, a company holding a small portfolio of properties for market rent;

• Curo Finance Limited, a company undertaking commercial activity, primarily property development; and

• Mulberry Park CBS, a community benefit society providing estate management services for recreational and community purposes.

Geographic Spread and Scale

Curo is based in Bath and owns or manages around 13,000 homes across the West of England.

Staffing and Turnover

The group employs 566 full-time equivalent staff. Group turnover for the year ended 31 March 2023 was £141.7m.

Development

Curo plans to develop around 1,700 homes between 2023 and 2028, including homes for affordable rent, shared ownership and outright sale.

About our judgements

Key to Grades

Governance:

	Compliant
G1	The provider meets our governance requirements.
G2	The provider meets our governance requirements but needs to improve some aspects of its governance arrangements to support continued compliance.

	Non-compliant
G3	The provider does not meet our governance requirements. There are issues of serious regulatory concern and in agreement with us the provider is working to improve its position.
G4	The provider does not meet our governance requirements. There are issues of serious regulatory concern, and the provider is subject to regulatory intervention or enforcement action.

Viability:

	Compliant
V1	The provider meets our viability requirements and has the financial capacity to deal with a wide range of adverse scenarios.
V2	The provider meets our viability requirements. It has the financial capacity to deal with a reasonable range of adverse scenarios but needs to manage material risks to ensure continued compliance.

	Non-compliant
V3	The provider does not meet our viability requirements. There are issues of serious regulatory concern and, in agreement with us, the provider is working to improve its position.
V4	The provider does not meet our viability requirements. There are issues of serious regulatory concern, and the provider is subject to regulatory intervention or enforcement action.

Note: The use of an asterisk (*) against a grade indicates that the assessment refers to a provider that is designated as being for-profit.

Definitions of Regulatory Routes

In Depth Assessment (IDA): An IDA is a bespoke assessment of a provider’s viability and governance, including its approach to value for money. It involves on-site work and considers in detail a provider’s ability to meet its financial obligations and the effectiveness of its governance structures and processes.

Stability Checks: Based primarily on information supplied through regulatory returns, a Stability Check is an annual review of a provider’s financial position and its latest business plan. The review is focused on determining if there is evidence to indicate a provider’s current judgements merit reconsideration.

Reactive Engagement: Reactive engagement is unplanned work which is triggered by new information or a developing situation which may have implications for a provider’s current regulatory judgement.

Stability Checks and Reactive Engagement: In some cases, we will publish narrative regulatory judgements which combine evidence gained from both Stability Checks and Reactive Engagement.

For further details about these processes, please see Regulating the Standards.