The 109,000-home housing association has reduced its development target to focus on investing in existing stock
L&Q’s completions during the current financial year have fallen by more than a third.
The housing association giant, in an unaudited trading update, said it completed 1,902 homes in the nine months to 31 December, compared to 3,007 in the same period last year.
The figures consist of 1,236 completions for social housing tenures and 666 completions for market sale.
Starts also fell from 1,974 to 351 year-on-year.
In the period from 31 March to 31 December 2023, L&Q completed 351 new build homes .
The housing association now owns and manages a total of 109,349 homes, up from 108,326 homes as at 31 March 2023.
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The update also showed L&Q’s turnover has dipped slightly from £793m in 2022 to £761m in 2023.
Its earnings before interest, taxes, depreciation and amortisation (EBITDA) margin, excluding sales, increased from 33% during the same period in 2022 to 39% in this financial year.
Its unaudited operating surplus has also increased from £241m in 2022 to £268m in 2023.
In terms of its future development pipeline, along with joint ventures, L&Q is currently active on 144 operational sites, a decrease from 182 in the previous financial year.
The association previously announced it intends to reduce its annual development from more than 4,000 to around 3,000 homes in the coming years as it focuses more spend on existing stock.
Waqar Ahmed, group director of finance at L&Q, said: “L&Q’s Q3 trading results are broadly in line with themes set out in our Q2 trading statement. We are investing in our maintenance programme to address damp and mould, fire safety, energy efficiency and wide-ranging estate improvements. We are also progressing our multi-year transformation programme to deliver a simplified target operating model and improve the service we deliver to our residents.”
Ahmed added: “Market conditions continues to impact sales across all tenures. However, with the end of help to buy, demand for shared ownership remains strong and we have maintained first tranche sales at 32% despite higher interest rates impacting affordability for purchasers. Whilst the outright sales market remains subdued, our exposure continues to decline. On a look-forward basis, capital expenditure is expected to peak this financial year and fall thereafter. This means that risk and future earnings volatility within the development pipeline continues to be substantially absorbed.”
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