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L&Q announces record surplus after merger
In its first annual financial statement since a merger with East Thames, one of London’s biggest housing associations, L&Q, has announced a record surplus of £332m before tax.
The surplus was a record for the group and a £53m increase on the previous year. L&Q also, however, incurred more than half a billion pounds of refinancing costs as it moves to restructure its debt.
The release of the statement coincided with the board approving formal plans to integrate the operations of L&Q and East Thames and to create a new regional structure by April of next year.
The merger, according to the financial statement, will provide £38m of efficiencies by the end of the financial year 2020, allowing L&Q to set up an investment fund of £250m for “community investment”.
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This statement comes at the end of a financial year in which L&Q completed a merger, bought strategic land business Gallagher Estates, announced a joint venture with Trafford Housing Trust in Manchester, set up care and support arm L&Q Living and formed a 20,000-home partnership with City Hall.
Turnover in 2016/17 increased by 20% to £756m, while the company’s operating margin on social housing lettings increased to 50%. Total assets net of current liabilities rose to £10.8bn from the previous year’s £8bn. Current assets leapt to £1bn as a result of Gallagher’s land reserves.
Waqar Ahmed, group director of finance at L&Q, said: “Britain’s housing crisis will only be solved if organisations like L&Q forge relationships with like-minded partners and put forward bold, long-term plans.
“The strategic partnerships we formed during the year have significantly changed L&Q in terms of size, geography and customer profile, but we have reaffirmed our social mission to make sure that at least half of the new homes we build are genuinely affordable to people on low incomes.”
