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Profits rise 16% at house builder Lovell amid partnerships push
Profits have risen 16% at Lovell Partnerships as the total number of homes built through its partnership model rose 19%.
The developer, which is owned by the Morgan Sindall Group, posted half-year profits of £11.7m, according to its results.
The total number of homes built through the partnership model rose 19%, to 1,584, up from 1,328 in the first half of 2023.
An improved performance for the partnership business is expected in the second half of the year, based on the “slightly improving housing market” and secured contracting work in the order book.
Lovell said it was delivering “significant affordable housing” through its partnership model, which includes multi-tenure development of open market and affordable homes, as well as delivering new-build homes for housing providers as a design-and-build contractor.
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Mixed-tenure revenue fell 23% to £123m compared with the previous year. At the end of the period, Lovell had 63 active mixed-tenure sites at various stages of construction and sales, down from 69 the year before. It completed a total of 784 mixed-tenure units across open market sales and social housing, including through joint ventures, compared with 805 in the first half of 2023.
Total revenue was £381m for the first half of 2024, up 2% from £373m in the first half of 2023. Revenue was driven by contracting, including planned maintenance and refurbishment, which was up 21% to £258m compared with the previous year.
Recent affordable schemes completed by Lovell include 71 homes at Cookley Works in Dudley for Platform Housing Group, and 39 social rented homes in Midlothian for Melville Housing Association.
The house builder has started on site for the latest phase of the 158-home Ringland scheme in Newport with Newport City Homes and recently completed a land deal with housing association EMH Group for 70 affordable homes in Desborough, East Midlands.
Across the Morgan Sindall Group, revenue rose 14%, to £2.2bn, while adjusted operating profit before tax was up 17%, to £70.1m. The group has net cash of £351m and a secured order book of £8.7bn.
Steve Coleby, managing director of Lovell, said: “Our partnership housing model, which focuses on long-term partnerships with the public sector, has provided resilience against a softer housing market, and demand for contracting has remained strong throughout the first half of the year.”
He said the government’s pledge to free up “planning restrictions” will unlock “a large number of regeneration schemes” and “pave the way for further investment”.
“Lovell is very well placed to support the government’s national targets and we are ready to deliver,” he added.
In its most recent full-year results, published in February, Lovell reported a slowdown in the sale of private homes on mixed-tenure sites due to the cost of living crisis and mortgage rates. Despite this, revenue rose 20% across the year, to £838m, with operating profit of £30.5m, due to the focus on affordable housing partnerships.
Partnership working has increased across the sector of late, with Vistry Group reporting an 8% increase in completions for the first half of the year in July, as its partnerships-only model gets underway.
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