L & Q’s investments in new housing are down 43% year over year in an attempt to save cash during the pandemic.
The housing association giant said in a statement to the stock exchange released yesterday along with its 2020/21 financial statements that it had spent £ 584 million on new homes in 2020/21, up from £ 1.02 billion the previous year.
Spending on new social housing fell 41% to £ 523 million, while investment in new private housing fell 56.6% to £ 38 million.
The group also announced that it completed 2,699 homes in 2020/21, nearly two-thirds of the 4,209 homes it had set for the year before the pandemic.
A spokesman said: “At the start of the pandemic, we took critical steps to conserve cash flow by reducing our capital and operating expenses while ensuring that we have met our commitments to our residents and customers.
“These short-term, prudent measures led to a reduction in investment in new housing, but they put us in a strong position to deal with the risks of an uncertain year.”
Despite the missed completion target, the value of 2,699 is still 11% above the previous year’s value. The take-offs decreased only slightly from 3,945 to 3,818 compared to the previous year.
“Our delivery of new apartments is behind the annual target mainly due to delays due to the lockdown of the coronavrius pandemic, when our construction sites were closed for most of the first quarter of the year and had to adjust capacities to enable safe operation.” within the state requirements ”, it says in the annual financial statements of L&Q.
L&Q has also previously revised down its longer-term development plans in light of increased property maintenance costs, including fire protection costs. New CEO Fiona Fletcher-Smith said in March that the group is now targeting 3,000 homes a year over the next five years. Before the pandemic, it had planned 100,000 apartments over 10 years.
“Growth will not come at the expense of investments in our existing homes and services,” states the balance sheet published today.
The group is investing £ 1.9 billion in upgrading existing homes over seven years, including £ 339 million in fire protection.
L&Q sales rose 14.9% to £ 1.05 billion while operating profit rose from £ 279 million to £ 307 million. Total surplus decreased from £ 414m to £ 208m, but this was due to a £ 235m donation related to the acquisition of the Trafford Housing Trust. Without this, the surplus would have increased by £ 29 million.
The group’s earnings before interest, taxes, depreciation and amortization (EBITDA) rose 23% year-over-year to £ 374 million, while net debt fell by £ 44 million to £ 5.3 billion
L&Q sold 1,681 homes, up from 1,463 a year earlier, despite profit from sales declining from £ 39 million to £ 36 million.
The financial statements were released a few hours after L&Q announced that it was revising its development and sales departments to allow for easier delivery of its 32,000 household pipeline.