L&Q reports major investment in homes as it publishes financial results for 2023/24

L&Q today publishes its annual statements demonstrating how a clear strategy and ability to adapt has enabled ongoing major investment in homes and services whilst delivering robust financial results with strong year-on-year performance.

The flagship £3 billion Major Works Investment Programme is already improving the safety, comfort and environmental performance of residents’ homes. L&Q invested £326m (2023: £347m) last year, which includes critical fire safety works. Through L&Q’s ten major works partners, improvement has been carried out on 1,595 kitchens, 1,543 bathrooms, 1,519 windows and 175 roofs. L&Q residents have played a pivotal role in shaping the programme and how it is delivered.

Building safety remains a priority, with L&Q continuing the delivery of one of the largest inspection and remediation programmes in the country, covering over 2,000 buildings (low rise and high rise) containing over 32,000 homes. By April 2024, L&Q had completed inspections on 1,467 buildings with 218 buildings requiring remediation. Of these, remediation had started at 60 buildings with a further 47 buildings already complete.  Work is continuing at pace on the programme, with our current progress detailed in the notes below.

Major works partners have also delivered more than £24 million in additional social value. This has included creating job opportunities and apprenticeships, revamping community spaces and running classes for residents. So far, the programme has created 27 full-time jobs and delivered 860 weeks of apprenticeships – many of these have been for L&Q residents.

Underpinning this work is a £45 million investment into the way L&Q operates and provides services to residents, supported by technology. New housing and finance management systems will create operational efficiencies, improve how data and information are managed, and how residents are communicated with, particularly vulnerable residents who may need different types of support.

While the focus is on investment in existing homes and services, the nation’s housing crisis will ultimately only be solved by increasing supply. In the last year, L&Q completed almost 3,000 new residential homes, of which 68% are for social housing tenures. This made it the biggest builder of new social housing in England last year.

L&Q remains committed to building more affordable homes, but future growth will be concentrated in its core areas of Greater London and Greater Manchester. In line with this strategy, L&Q completed the sale of its strategic land business L&Q Estates to Urban&Civic on 6th August 2024. The deal will help to further simplify L&Q’s business while generating additional revenue that will be reinvested into existing homes and services.

L&Q’s financial results have been delivered against a backdrop of high interest rates and inflation, a 7% rent cap, political and regulatory change, and broader skills and materials shortages in our supply chains. Despite the challenges faced, EBITDA increased to £343m (2023: £313m). In the year ended 31 March 2024, L&Q achieved an operating surplus of £333m (2023: £162m) with a marginal increase in net debt to £5.4bn (2023: £5.2bn). Available liquidity at £1bn (2023: £1.2bn) demonstrates that L&Q has a well-capitalised balance sheet that can absorb risk.

Waqar Ahmed, L&Q’s Group Director of Finance, said:

“In recent years our sector has faced unprecedented economic volatility, policy shifts and funding uncertainties, but we cannot and will not shy away from these challenges because the first responsibility of any housing association is to provide safe and affordable homes in which people can live comfortable, healthy lives. It is a shocking fact that one in 23 children in London is homeless, and there is an urgent need for more high-quality social housing to meet the scale of this crisis.

“L&Q has a very clear strategy, but we retain the ability to adapt our business to respond to challenges whilst delivering robust financial results with strong year-on-year performance. Working in partnership with residents, we have simplified and adapted our business and carried out a major balance sheet review over the past year. This has enabled us to achieve our primary aims of maintaining financial viability whilst ensuring residents receive the quality homes and services they deserve.”

Read L&Q's full financial statements.

Highlights:

• For the year ended 31st March 2024, L&Q achieved turnover of £1,122m (2023: £1,176m), EBITDA of £343m (2023: £313m) and an underlying surplus after tax of £117m (2023: £40m)
• Turnover decreased by 5% to £1,122m (2023: £1,176m). Of turnover, 63% (2023: 56%) was generated from core social housing lettings activities. A further 27% (2023: 37%) was from market sales activity (including shared ownership first tranche sales), 5% (2023: 4%) from market rents and 5% from other activities (2023: 3%)
• EBITDA increased by 10% to £343m (2023: £313m), EBITDA margin was 28% (2023: 22%) and EBITDA interest cover was 142% (2023: 169%). The year-on-year increase in EBITDA reflects our focus on delivering our strategic objectives and provisions for build defect liabilities
• Surplus after tax was £117m (2023: £40m). The improved performance is primarily due to a materially lower net impairment charge of £18m (2023: £109m) and lower downward valuation of investment properties of £30m (2023: £85m). 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 increased by £169m to £5,413m (2023: £5,244m) and available liquidity at just over £1bn was broadly stable (2023: £1.2bn) demonstrating continued success to conserve cash flows
• L&Q continues to maintain a strong financial position with total assets less current liabilities at £13,667m (2023: £13,185m) and net assets at £5,721m (2023: £5,615m). The housing properties portfolio grew by 2% to £11,617m (2023: £11,354m)
• Housing completions at 2,955 (2023: 4,047) of which 68% (2023: 71%) were for social housing tenures. This further demonstrates L&Q’s commitment to maximising its social purpose, while simultaneously, lowering its risk profile for commercial activity
• L&Q invested £424m (2023: £598m) in new social housing, demonstrating continued progress against our ambition to tackle the housing crisis and £2m (2023: £11m) in new market rent properties. A further £123m (2023: £51m) was invested in private housing for sale we develop ourselves and £24m (2023: £62m) in joint venture partnerships. Profits generated from non-social housing activities are re-invested in the delivery of social housing
• The charitable L&Q Foundation has played a vital role in continuing to support those who need it with L&Q investing £8m (2023: £10m) into the L&Q Foundation. A core service offered is Pound Advice, which works with a network of providers to give tailored support to people on a range of financial advice and debt management issues. In 2024, Pound Advice has helped more than 2,700 residents secure over £8 million. The gains made for residents have ranged from small one-off grants to large payments of benefits and everything in between. Additionally, L&Q’s in-house tenancy sustainment advisors supported 421 residents to manage their tenancies more successfully. Alongside financial inclusion support, L&Q’s employment service helps people increase their incomes by finding paid work. The team has helped 224 people start work in the last year
• Regulatory ratings are at G1 for governance and V2 for viability
• Building safety progress is continuing, as detailed in L&Q’s Building Compliance monthly data return for August 2024. L&Q has now completed inspections on 1,486 buildings, with 220 requiring remediation. Remediation is currently in progress on 47 buildings, with a further 63 buildings now complete