TIDM44EB
RNS Number : 0437J
London & Quadrant Housing Trust
18 August 2021
London & Quadrant Housing Trust ('L&Q') - Publication of
Financial Statements
L&Q today announces the publication of its consolidated
audited financial statements for the financial year ended 31 March
2021 which show how it has performed strongly throughout the
pandemic and laid the foundations for a record GBP1.9 billion
investment in homes and services.
All comparatives are to L&Q's consolidated audited financial
statements for the year ended 31 March 2020 ('2020').
The financial statements can be accessed via the following
link:
https://www.lqgroup.org.uk/investors/financial-performance
A copy of this document has been filed with the National Storage
Mechanism.
Highlights
For the year ended 31st March 2021, L&Q achieved turnover of
GBP1,052m (2020: GBP915m), EBITDA of GBP374m (2020: GBP303m) and an
underlying surplus of GBP208m (2020: GBP179m).
L&Q has delivered a material improvement in EBITDA margins,
interest coverage and debt metrics that are ahead of previous
guidance and reflect stronger than expected financial performance
during the pandemic, particularly in relation to completions, sales
and rent arrears. Available liquidity at greater than GBP1.1bn
demonstrates that L&Q has also been successful in implementing
prudent measures to conserve cash flows.
-- Turnover increased by GBP137m to GBP 1,052m (2020: GBP915m), the highest L&Q has ever achieved. Of this, 57% was
generated from core social housing lettings activities (2020: 62%). A further 35% (2020: 30%) of turnover was
from market sales activity, 4% (2020: 5%) from market rents and 4% other (2020: 3%).
-- EBITDA increased by 23% in the year to GBP374m (2020: GBP303m), EBITDA margin was 30% (2020: 26%) and EBITDA
interest cover was 254% (2020: 193%). The year-on-year improvement in EBITDA reflects the prudent financial
measures that L&Q implemented during the pandemic.
-- Surplus after tax was GBP208m, which was GBP29m ahead of like for like performance in the previous year (2020:
GBP414m, which included the GBP235m gift on acquisition of Trafford Housing Trust). L&Q's surpluses will be
re-invested back into ensuring the safety of residents, the quality of homes and services, supporting communities,
and increasing the supply of new social housing.
-- Net debt reduced to GBP5,327m (2020: GBP5,371m) through careful cash conservation and management.
-- The Group continues to maintain a strong financial position with net assets increasing by GBP186m to GBP5,413m in
the year (2020: GBP5,227m). The housing properties portfolio grew by GBP351m to GBP10,906m (2020: GBP10,555m)
with the additions from a mix of capital maintenance works and continued growth from the development programme.
Total reserves stand at GBP5,413m (2020: GBP5,227m).
-- Despite the on-set of the pandemic and temporary closure of construction sites last year, housing completions at
2,699 (2020: 2,439) are up 11% year-on-year, of which 58% (2020: 49%) are for social housing tenures. This shift
in the balance of tenure further demonstrates L&Q's commitment to maximising its social purpose, while
simultaneously, lowering its risk profile for commercial activity.
-- During the year L&Q invested GBP523m (2020: GBP882m) in new social housing, as we make progress with our ambition
to tackle the housing crisis. We also invested a further GBP38m (2020: GBP86m) in private housing we develop
ourselves and GBP23m (2020: GBP55m) in partnerships through joint ventures to generate profits to re-invest in
the delivery of social housing.
-- While the pandemic has impacted L&Q's repairs and maintenance service, GBP190m (2020: GBP231m) was invested in
residents' homes, which includes investment in fire safety works. The safety of residents and staff is L&Q's
number one priority, and it is delivering one of the UK's largest building inspection programmes. Since the
Grenfell tragedy L&Q has already spent over GBP100m on building safety. More than GBP20m has been spent on the
installation of Waking Watches or temporary fire alarm systems where necessary, which has not been recharged to
residents.
-- Over the next seven years, GBP1.9 billion will be invested to transform existing homes and neighbourhoods, in
what is believed to be the largest housing investment programme ever undertaken by the sector. Of this, GBP339m
has been committed to fire safety works, with further substantial investment to maintain Decent Homes standards,
major internal and external works, estate improvements, and energy works to reduce carbon emissions. This
investment will be in addition to spending on routine repairs and servicing, works to enable the re-letting of
empty homes and overhead costs.
-- A commitment to supporting communities has also continued with another GBP8 million invested in the L&Q
Foundation. For every GBP1 invested L&Q has created over GBP3 of social value, and supported thousands of people
throughout the pandemic - helping people lead independent lives, secure employment and transforming the fabric of
neighbourhoods to create thriving and sustainable communities.
-- The last year has also seen L&Q Living providing care and support services to people with a wide range of needs
throughout the pandemic. This includes older people, people with learning difficulties and mental health needs,
and people affected by homelessness. The CQC rated 100% of care schemes as outstanding or good.
-- Despite operational challenges as a result of the pandemic, customer satisfaction with maintenance services
remained unchanged at 71%.
-- Top tier regulatory ratings were retained, with a G1 for governance and a V1 for viability.
Commenting on the results Waqar Ahmed, Group Director, Finance
said:
"Despite the extraordinary operating environment of the past
year, L&Q's flexibility, agility, discipline, strong governance
and the ongoing support of our lenders and investors demonstrates
how financially robust the L&Q Group is.
Earlier this year, we launched a new five-year strategy which
prioritises investment in safety and the quality of existing homes
and services. Because of our strong financial performance, we are
able to commit to a landmark GBP1.9bn housing investment programme.
This will enable us to make substantial improvements to L&Q
homes and neighbourhoods across the country."
Mr Ahmed added: "This renewed focus on existing homes and
services will not diminish L&Q's commitment to tackling the UK
housing crisis through investment in new homes and Modern Methods
of Construction with an annual programme of at least 3,000
completions projected for the medium term. We will also continue
supporting vulnerable residents and awarding grants to causes that
promote aspiration, confidence and opportunity through the L&Q
Foundation, which is now in its tenth year."
ENDS
This update may contain certain forward-looking statements
reflecting, among other things, our current views on markets,
activities and prospects. Actual outcomes may differ materially.
Such statements are a correct reflection of our views only on the
publication date and no representation or warranty is given in
relation to them, including as to their completeness or accuracy or
the basis on which they were prepared.
For further information, please contact:
investors@lqgroup.org.uk
James Howell, Head of External Affairs 020 8189 1596
www.lqgroup.org.uk
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END
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