“Residents are at the heart of those priorities, and this positive set of financial results are testament to that, highlighting record levels of investment in homes and services, and also demonstrating continued improvements in our operational performance, supported by the impact of our organisational transformation plans.
L&Q invested £371m in maintenance in the year, the third of its £3bn, 15-year Major Works Investment Programme. This figure was up 14% from £326m the year prior.
Farnsworth said that while “wider economic uncertainty remains”, this was “a period of significant opportunity for L&Q”, given the government’s support for the sector.
L&Q recorded turnover of £1.11bn, down £11m from £1.12bn.
The vast majority (70%) of turnover was generated from core social housing lettings, with a further 18% coming from market sales activity.
This was a drop from 27% in the year prior, which was “a result of a strategic decision to slow down development activities and reduce exposure to more volatile sales market activities”.
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Operating surplus was £377m, up from £333m. All of the increase in operating surplus was driven by social housing activities, with non-social housing activities suffering a £17m loss due to downward valuation of investment property and impairment costs relating to development schemes (£24m).
The provider’s operating surplus figure was substantially adjusted from the provisional estimate of £431m given for the year in an unaudited trading update at the end of Q4.
No provision was made for impairment in that trading update, but guidance had been given it would be in the range of £20m to £40m. In a statement to investors, L&Q set out nine separate adjustments made following the completion of the audit.
The most significant of these were non-sale operating costs being £39m higher and negative changes in the value of investment property being £15m higher than previously expected. There was also a £10m loss from joint ventures that was not recorded in the unaudited figures. These were partially offset by a £12m increase in other income.
Updated figures
Several of L&Q’s metrics have changed in their final audited accounts compared to an unaudited update earlier in the year
The changes had a knock-on effect for the overall surplus for the year, which stood at £33m compared with the previously estimated £88m.
Either way, this would have been a drop on the £117m recorded the year prior, with the figure hit by a £120m loss on disposal of the L&Q Estates group of entities to Urban & Civic.
Surplus for the year before taking the disposal into consideration was £153m, up from £117m.
EBITDA MRI interest cover was 156%, up from 142%, while net debt stayed level at £5.4bn.
In the chair’s statement, Liam Coleman, said: “the long-term certainty and support provided by the government means that we can look to the future with renewed optimism”.
He noted that 70% of the organisation’s repairs were now delivered in house and said the organisation was looking to increase that to 80% over the next 12 months.
Coleman added that the organisation was “well placed” to respond to Awaab’s Law, which will be phased in from October, having already fitted 19,000 humidity sensors and strengthened technical teams.
L&Q’s provisions dropped from £91m to £71m over the course of the year, with its £23m increase in provision more than compensated for by a £43m release.
Coleman said the provider expected to have either completed or begun remediation on all its 18m+ buildings by the end of March 2026.
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