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L&Q posts record surplus for 2017/18
London’s largest housing association has posted a record surplus for 2017/18, as the first annual reports in the housing sector are published.
L&Q posted a surplus of £348m for the year after tax, up from £220m in the previous year. That year’s results were skewed by refinancing costs and the merger with East Thames.
Excluding those, L&Q’s 2016/17 surplus was £327m, meaning the 2017/18 figure is still the highest ever for the association.
Meanwhile, the association’s turnover cleared £1bn for the first time, a significant increase from the previous year’s figure of £756m.
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It said this was driven by the delivery of additional homes and the first full year of land sales by Gallagher Estates, which delivered a turnover of £243m.
60% of overall turnover was from social housing, 36% was from market sales and 4% was from market rent. L&Q’s revenue from social housing was £521m, up from £459m, while its property sales revenue was £200m, a slight decrease from £214m.
Waqar Ahmed, group finance director at L&Q, said: “L&Q has delivered record results under exceptional circumstances, and this gives us the platform to make our biggest ever investment in our social purpose and transform the business for the benefit of our residents, colleagues and stakeholders.”
These figures stand in contrast to fellow London association Metropolitan, which in its annual report reported a decreased operating surplus, blaming this on the cost of post-Grenfell safety work.
L&Q said it spent £35m on fire safety in the year, including replacing cladding made from aluminium composite material, the same kind as that used on Grenfell Tower. This leaves £15m in the fund set aside to cover fire safety works over three years.
It expects to finish all work on cladding by the end of December 2018 and has started a five-year programme to provide smoke alarms.
Despite this work, L&Q missed its target of 75% resident satisfaction with repairs and maintenance, achieving 70%.
The annual report stated: “We recognise a need to shift emphasis back to our social purpose.”
Mr Ahmed added: “It is clear to our leadership team that we have some work to do to improve the services we offer to our residents, and our new corporate plan establishes exactly how we will do that. We are determined to provide the resources necessary to achieve swift improvement.”
