L&Q sees completions drop a quarter amid focus on existing stock

News13 May 2024Michael Lloyd

L&Q has reported a 27 per cent drop in annual completions as it continues to focus on spending on its existing stock.

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L&Q has seen its completions fall by almost 27 per cent year-on-year in 2023-24 as the G15 landlord continued to focus on spending on its existing stock #UKhousing #SocialHousingFinance

The G15 landlord handed over 2,955 homes in the year to the end of March 2024, a drop from 4,047 the previous year, according to its unaudited accounts published late last week.

The 2,955 total consisted of 2,017 homes for “social housing” tenures (68 per cent) and 938 for “market” tenures (32 per cent), L&Q said.

It comes after L&Q revealed in 2021 that it was reducing its housebuilding target by 70 per cent, partly due to fire safety costs.

In its most recent year, starts also fell sharply, down to 813 compared to 2,760 in 2022/23.

Looking ahead, L&Q said it expects to deliver about 2,600 new homes in the current year.

Waqar Ahmed, group director of finance at L&Q, said: “L&Q’s preliminary unaudited results continue to reflect our stated objectives to divert a greater level of expenditure towards our residents’ existing homes to address our strategic priorities of health and safety, quality of homes and improving services.”

Sales

Mr Ahmed said that “due to higher mortgage rates, sales were subdued, though demand remained stable for shared ownership”.

Turnover from sales fell by 32 per cent to £294m.

As a result, L&Q’s overall turnover, including income from rent, slid by five per cent to £1.12bn.

The group’s unaudited post-tax surplus figure for the latest year was £147m. This compared to an unaudited post-tax surplus figure of £164m for the 2022-23 year.

However the final audited post-tax surplus figure was £40m, which included an £84m impairment on fixed assets and a £15m increase in provision for build defect liabilities.

In the most recent year, L&Q said that provisions for impairments will be between £25m and £65m.

Net debt and liquidity

Mr Ahmed said that L&Q has a “well-capitalised balance sheet with net debt broadly stable” at £5.5bn, up from £5.3bn, and available liquidity of £1bn, a fall from £1.2bn.

“We remain committed to lower our risk profile,” he said. “The projected cost to complete our development pipeline continues to reduce and stands at £2.5bn (2023: £3.1bn).

“We are also lowering risk and improving our ability to offer more focused customer service by divesting of some homes outside our core strategic areas of London and Manchester via our stock rationalisation programme.”

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