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L&Q generates record £274m surplus
L&Q has generated a surplus of £274m for the 2015/16 financial year, breaking its own record for the sector.
The surplus was 27% up on last year’s £215m, while turnover was up 8% to £720m. Of that figure, £484m was classified as revenue from social housing activities, with £235m coming from non-social housing activities.
The 73,000-home landlord completed 2,500 new homes during the year, while its development pipeline has trebled from 13,500 to 40,000 homes.
It comes just a year after the association set out ambitious plans to scale up development to 5,000 homes a year, and build 50,000 homes over 10 years.
In accordance with these plans, just over half of the new homes built (55%) by L&Q in 2015/16 were for social housing or shared ownership, with the remaining 45% offered for sale or market rent.
The organisation is in the advanced stages of a merger with fellow London landlords East Thames and Hyde, which it hopes will double this output to 10,000 homes per year.
Finance director Waqar Ahmed told Inside Housing the plan was not affected by last month’s vote to leave the EU. He said as its for-sale homes were outside prime central London areas, he was confident they would be able to cope with a potential slow-down in the market.
The record surplus allowed the association to invest £277m in building social rent and shared ownership homes, while a further £303m was sent on outright sale and private rent homes, and £45m towards improving the landlord’s existing stock.
Operating costs rose by 4% from £243m to £253m, although staff costs were 19% up, rising from £67m to £80m over the year.
The number of employees earning at least £60,000 rose from 120 to 161 in 2015/16, while the number earning more than £100,000 grew from 17 to 25 over the same period.
On the Brexit vote, Mr Ahmed added: “We have shown that we can respond to significant challenges over the past year.
“Our balance sheet remains resilient, our people are skilled and we can adapt to changing market conditions, so we are confident of delivering our objectives despite any challenges ahead.
“Indeed, while we will not place our social housing assets at risk, we are also alert to opportunities that may now arise.”
