L&Q: £95 million surplus down to 'more commercial approach'

Published by Jon Land for 24dash.com in Housing

London & Quadrant Group, the largest housing provider in London and the South East, has announced a £95 million surplus for the last financial year - underpinned by a "more commercial approach".

L&Q says the "solid" set of financial results for 2011/12, achieved despite a struggling economy and reduced capital grant, will lead to increased investment in homes, services and communities.

Last year L&Q completed 1,620 homes, started work on another 1,384, and increased their development pipeline of much-needed new homes from 8,000 to 10,300.

At the same time L&Q boosted its investment in their portfolio of 68,600 homes across London and the South East. Resident satisfaction increased for the fourth year in succession to 82.9%.

Waqar Ahmed, Group Director of Finance at L&Q, said: “L&Q has responded to the extremely difficult economic environment by driving efficiencies and taking measured commercial risks to deliver our social mission.

“We are acutely aware that there is a chronic shortage of good quality, affordable housing across London and the South East and the surplus we have generated will help us to increase our development pipeline from 8,900 to over 10,000 new homes.”

He added: “At the same time, we are absolutely committed to our existing residents. This means investing in their homes, services and communities, and helping them cope with the challenges of welfare reform, rising energy bills, high inflation and unemployment.”

L&Q says its annual surplus was achieved through a dual strategy of driving efficiencies and a more commercial approach.

In a statement issued today, L&Q said: "Every penny of the surplus supports L&Q’s social mission. £60 million supported the development of new homes, £25 million was used to improve L&Q’s existing 68,600 homes and £10m supported L&Q’s move into the market rented sector.

"L&Q’s move into the market rented sector will help the increasing number of families who are not eligible for Affordable Rent, and are unable to access mortgages either. The average price of a property in London is now £408,384, while the average salary is just £27,128.

"L&Q aims to offer homes within the market rented sector which are affordable, good quality and secure for low to middle income working families."

L&Q has also set aside £100m of its internal capacity to invest in grass-roots community projects and infrastructure through the L&Q Foundation. The aims of the Foundation are supporting younger people, creating employment and training opportunities for residents, community development and tackling financial exclusion.

In addition to the surplus, L&Q took advantage of the low interest-rate environment to secure £250 million worth of private finance through an Aa2/AA- rated 21.5-year bond issue priced at just 4.625%.

Mr Ahmed added: “Looking ahead we know that there are going to be more obstacles and we will increasingly need to take responsibility for our own future.

“However, L&Q is a social enterprise and this is a powerful model which can drive economic growth. We are committed to using our strengths to benefit the communities we support, and in an era of global austerity and uncertainty we are open for business.

“The greater our surplus the more we can invest, and we have an engaged workforce of 1,200 dedicated staff who are passionate about delivering our goals.

“By continuing to forge strong relationships with our local authority partners and carefully using every penny of our surplus to achieve best value, we face the year ahead with optimism and will do everything we can to meet the diverse needs of people and create places where people want to live.”