L&Q reports trebling of surplus – but this could be reduced by impairment charges

L&Q’s has reported a post-tax surplus of £147m for the year to 31 March.

The housing association giant, in a trading update today, said its surplus has more than trebled from the previous year’s figure of £40m. Its operating surplus - which excludes certain one-off payments- more than doubled from £162m to £366m.

However, this figure could be reduced by between £25m and £65m due to unspecified impairment charges that will be included in the association’s full audited accounts published in the summer. L&Q said its EBITDA at £349m was up on the £313m reported last year but lower than expected due to “development defects” and “prolonged cost inflation”.

L&Q’s sales income fell from £431m to £294m year-on-year, however this was largely offset by an increase in rental income from £746m to £825m.

The provider in its statement described sales as “subdued”, but said demand remained stable for shared ownership, with the average sale price increasing from £397,000 to £412,000. Overall turnover was broadly unchanged at around £1.1bn.

L&Q - which has announced it is dialling down its development since building more than 4,000 homes in the previous two financial years - completed 2,955 homes in 2023/24. This is down on its target of 3,209 for the year. L&Q also said that it is forecasting 2,600 completions in 2024/25, of which 80% will be for social housing tenures (up from 68% in 2023/24)

L&Q said it invested £328m in its maintenance programme (down on £378m last year) and began its £3bn, 15-year major works programme.

Waqar Ahmed, group director, finance at L&Q said: “This programme will improve the safety, comfort and environmental performance of our resident’s homes, maintaining all our homes to the Decent Homes Standard and bringing up all homes to a minimum Energy Performance Certificate (EPC) C status.

“As part of our transformation programme, we entered into contracts for new housing and finance management systems which will enhance operational efficiency and the service we offer to our residents”