Housing association spends £112m on capital works as it shifts expenditure towards existing homes
L&Q has almost trebled its surplus for the 2023/24 financial year.
The 109,000-home housing association, in its financial statement for the 2023/24 financial year, reported an overall surplus of £117m, up from £40m the previous year.
The increase was due mainly to a reduction in operating costs from £1.1bn to £891m. The group said its headline operating cost per social housing unit decreased by 17%.
It said: “The improved performance compared to the previous year was primarily due to significant one-off costs such as temporary accommodation, impairment and latent defect issues which occurred in 2022/23.” The figure was also helped by a £55m reduction in balance sheet losses due to the revaluation of investment properties.
The surplus was however £30m lower than the £147m trailed back in May, although L&Q warned at the time that this figure would be reduced due to impairment charges.
The 105,000-home housing association’s operating surplus, which excludes one-off costs including some financing costs, doubled from £162m to £333m.
Of this, a £304m surplus was generated from all social housing activities, up from £188m, while non-social housing activities generated a surplus of £29m, compared to a deficit of £27m in the previous year.
>> See also: L&Q increases operating surplus by 60% in first quarter while completions halve
>> See also: L&Q sells strategic land business to Urban and Civic
This year, impairment costs totalled £18m, which is “materially lower” than the £103m in impairment costs L&Q incurred the previous year.
L&Q’s turnover declined very slightly from £1.18m in 2022/23, o £1.12m at 31 March 2024. The main reason for this decrease was a reduction in open market and land sales activities.
L&Q said this reduction was part of a strategic decision to slow down development activities and reduce exposure to “more volatile” market activities.
In 2023, L&Q’s market sales activities accounted for £433m of its turnover, whereas in 2024, turnover from market sales dropped to £298m.
As L&Q announced it May, it delivered 2,955 new homes in the 2023/24 financial year, down on its target of 3,209.During the year to 31 March 2024, L&Q started 813 new homes, a decrease from 2,760 in 2022/23.
In September last year, L&Q announced that it would be reducing its annual development to around 3,000 homes in the coming years as it focuses on spending more on existing stock.
The group spent £326m on existing homes in total in 2023/24, down slightly on the £347m spent the previous year, but higher than £262m two years ago.
Housing association financial statements 2023/24
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