L&Q turnover falls as sales market remains ‘challenging’

L&Q has reported an 8% drop in its turnover for the first half of the year.

The 106,000-home provider, in an unaudited trading update today, said its first half turnover is £469m, compared to £511m for the same period last year.

A large part of the fall was due to sales revenue move than halving, dropping by £35m to £31m.

It said: “The sales environment remains challenging and we continue to manage our exposure carefully.

“Sales accounted for 11% of turnover compared with 22% in the equivalent period last year. Maintaining this disciplined approach to sales, development and investment will be important as we continue to strengthen L&Q for the long term.”

The group completed 648 homes in the half-year, down on the 1,052 completed in the same period the previous year.

L&Q however increased its capitalised major repairs spend from £39m to £65m, while its maintenance costs rose from £130m to £144m.

The G15 landlord said the figures demonstrate L&Qs focus on “core social purpose, investing in the quality of existing homes and services while maintaining the financial strength to deliver more affordable housing over the long term.”

The group started work on 613 homes in the period, similar to last year’s half-year figure of 636.

L&Q’s half-year operating surplus fell 35% from £199m to £130m. It made an overall deficit of £191m, compared to a surplus of £93m the previous period, due largely to a one-off £232m deficit relating to a disposal of a business interest.

It also reported its interest cover and margins have fallen in the first half, year-on-year. EBITDA-MRI interest cover decined from 182% to 117%, while EBITDA-MRI margin fell from 40% to 23%.

The provider in September announced it missed its targets for operating margin and interest cover in 2025/26 but said short-term balance sheet pressure is acceptable in order to invest more in existing homes and support long-term outcomes.