L&Q projects £150m surplus shortfall
London & Quadrant Housing Trust has projected a surplus of £190m, just 56% of its target for the period ending 31 March 2019.
In a trading update for the period ended 31 December, the housing association said it would fall £150m short of its £340m target.
Waqar Ahmed, group director for finance, said: “The ongoing political and economic uncertainty continues to weigh on consumer sentiment, particularly in the London sales market where confidence remains a constraint and is contributing to downward pressure on pricing.
London & Quadrant Housing Trust has projected a surplus of £190m, just 56% of its target for the period ending 31 March 2019.
In a trading update for the period ended 31 December, the housing association said it would fall £150m short of its £340m target.
Waqar Ahmed, group director for finance, said: “The ongoing political and economic uncertainty continues to weigh on consumer sentiment, particularly in the London sales market where confidence remains a constraint and is contributing to downward pressure on pricing.
“This unprecedented period of uncertainty combined with our deliberate, and what we feel is necessary, short-term decision to increase investment in our immediate priorities of health and safety and the quality of our homes has led to reduced year-on-year operating performance.”
“This is a trend that we forecast to continue in the immediate short-term.”
L&Q reported a £40m increase in maintenance expenditure, a £50m reduction in sales profits and a £10m increase in net interest costs, all negatively impacting cashflow.
It said the decline in surplus was also a result of a £20m increase in operating costs and £30m of project interest costs, both of which were previously forecasted to be capitalised.
For the quarter ending 31 December, L&Q reported a surplus of £142m, down 46% from £262m for the same period in 2017.
Ahmed said: “Despite the challenges presented to us, we are confident that the excellent progress that we have made against our current priorities, our ability to adapt where necessary and to act prudently will ensure that our long-term corporate objectives remain achievable.
“While market conditions remain tough and we continue to be more selective about new business opportunities, the strength of our balance sheet and our ability to service debt means that our long-term ambitions are unchanged.”
At 31 December 2018, L&Q held 246 completed market-sale units outside of joint ventures. It said 75% of these had been held as stock for less than one month. The average selling price for market sales was £593,000, 51% of purchases were conducted under Help to Buy. The average selling price of first-tranche shared-ownership sales was £398,000, with an average sale of 35%.
To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette
