Finance

2007/08 was a very successful financial year for the L&Q Group with the accounts reflecting our continued financial strength.

We achieved strong financial performance in the same year that we took on Ujima Housing Association. Despite operating in a harsher economic environment we’ve met our financial targets and shown our lenders that we can meet our future loan repayments and contractual commitments.

Some key figures

• Annual surplus: £44 million (down slightly from £46 million last year)
• Turnover: £244 million (up from £193 million)
• Operating cost per home: £3,006 (down from £3,098)
• Housing management cost per home (general needs): £496 (down from £521)
• Spend on routine, planned and major repairs: £86 million (up from £70 million)
• The Group now owns and manages over 56,000 homes
• The vacant possession value of our housing portfolio has reached £8.8 billion

Our average cost of debt has reduced from 6.38% to 5.94%. We now have a loan book of £1.3 billion

The increase in turnover reflects both organic growth and Threshold, which joined the Group on 31 March 2007, being reflected in the accounts for the first time.

The financial effects of Ujima aren’t yet fully impacting on the accounts although we have reflected their results since they joined the L&Q Group in January 2008. Meanwhile, Ujima’s own separate accounts for the last two financial years will be released soon.

L&Q is now the largest developer in London and the South East with over 8,000 homes in the pipeline and our strong financial results support our appetite for continued growth.

The future

We face pressure on our cost base in the future – delivering continued efficiency, bringing properties up to Decent Homes standards, addressing the sustainability agenda and supporting the switch to digital TV.

In addition the creation of a new regulator and the Homes and Communities Agency will change how we do business.
The credit crunch, which had minimal impact on the 2007/08 accounts, could affect us in the future.

The biggest risk for us is the lack of liquidity in the market and the impact this will have on future pricing at a time when volatility in the housing market is at its highest.

The good news is that we have sufficient cash facilities three years ahead of needing it, so the impact will be less immediate.

The outlook is certainly challenging, but L&Q is perfectly placed to rise out these pressures due to its financial strength, its people and its size.

Our management team will continue to keep a close eye on our budgets and finances throughout the year to ensure we have the resources available to continue creating places where people want to live.

Further information

For further information download our financial statements from the publications page.

Should you need a copy of the accounts for one of our subsidaries, please contact us at financeadmin@lqgroup.org.uk.

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