TIDM44EB
RNS Number : 7018I
London & Quadrant Housing Trust
12 August 2019
London & Quadrant Housing Trust Trading Update for the
period ending 30 June 2019
London & Quadrant Housing Trust ('L&Q') is today issuing
its consolidated trading update for the three months ended 30 June
2019 ('2019 Q1').
All statement of comprehensive income comparatives are to
L&Q's consolidated unaudited prior year equivalent period being
the three months ended 30 June 2018 ('2018 Q1').
Highlights:
-- The proposed acquisition of Trafford Housing Trust ('THT') is
set to complete on or about 1 October 2019
-- There are 104,400 units in management (as at 31 March 2019: 103,917)
-- L&Q has completed 691 residential units (2018 Q1: 684)
-- Turnover was GBP178m (2018 Q1: GBP229m)
-- Operating surplus was GBP58m (2018 Q1: GBP78m)
-- EBITDA(1) was GBP55m (2018 Q1: GBP75m)
-- EBITDA margin(2) was 21% (2018 Q1: 31%)
-- EBITDA margin (excluding sales)(3) was 35% (2018 Q1: 44%)
-- Gross sales margin(4) was 10% (2018 Q1: 12%)
-- Net sales margin(5) was 4% (2018 Q1: 8%)
-- EBITDA / interest cover(6) was 144% (2018 Q1: 215%)
-- EBITDA social housing lettings interest cover(7) was 118% (2018 Q1: 175%)
Commenting on the results Waqar Ahmed, Group Director, Finance
said:
"L&Q expects challenging conditions to persist throughout
the financial year to 31 March 2020 as we balance our key
priorities against political and economic uncertainty. However, we
continue to remain confident in our future prospects as we scale
back development of outright sales for alternative tenures and only
seek to approve longer term strategic sites that require minimal
initial capital outlay.
This view is supported by cost flexibility, strength of balance
sheet, geographical expansion, ability to service debt and a strong
liquidity position. The forward guidance disclosed within this
trading update further demonstrates our commitment to provide a
greater level of transparency to our stakeholders.
The operating expenditure disclosed in our Q1 results reiterates
our strategic decision to tackle social stigma by improving the
quality of our homes and implementing the recommendations of Dame
Judith Hackitt's review of building regulations ahead of
legislation as we confirm our commitment to sharing best practice
and encourage culture change and leadership across the
industry."
Forward Guidance to the year ending 31 March 2020
We project EBITDA to be in the range of GBP325m to GBP345m. We
have revised our guidance on projected surplus after tax to be at
the lower end of the range of GBP250m to GBP270m announced in our
last trading statement and expect net debt to be at GBP5.3bn to
GBP5.4bn.
Financial Metrics Forward Guidance to 31 March 2020
-------------------------------------------------- ----------------------------------
EBITDA margin(2) 28%
EBITDA margin (excluding sales)(3) 46%
Net sales margin(5) 10%
EBITDA interest cover(6) 211%
Social housing lettings EBITDA interest Cover(7) 124%
Debt to assets(8) 42%
Gross debt to EBITDA (9) 16.1x
Sales as a % of turnover(10) 50%
-------------------------------------------------- ----------------------------------
Trafford Housing Trust
On 2 April 2019, L&Q announced the proposed acquisition of
THT which was anticipated to complete in June 2019 subject to
customary closing conditions, including but not limited to: due
diligence, customer consultation, lender consents and regulatory
approvals. The boards of L&Q and THT have unanimously approved
to delay the proposed acquisition until October 2019 as customary
closing conditions are completed.
Housing Completions
L&Q, including joint ventures, has completed 691 (2018 Q1:
684) residential units in the financial year to date comprising of
345 (Q1 2018: 314) completions for social housing tenures and 346
(2018 Q1: 370) completions for market tenures. During that same
time, 1,409 new build residential units commenced on site (2018 Q1:
2,099).
Development Pipeline
L&Q, including joint ventures, is operating from 173 (as at
31 March 2019: 157) active sites. L&Q has approved an
additional 1,214 residential units during the financial year to
date bringing total units in the approved development pipeline to
51,700 (as at 31 March 2019: 50,400). Some 36% of the approved
pipeline (18,587 units) is on site.
The future projected cost of the entire development pipeline
(including work in progress and developments not yet committed or
on site) that extends until the financial year ending 31 March 2040
is estimated at GBP7.0bn (as at 31 March 2019: GBP6.8bn) of which
GBP4.9bn (70%) is currently committed. L&Q holds a further
potential 47,100 (as at 31 March 2019: 46,800) strategic land
plots.
Unaudited Financials
The unaudited financials exclude further adjustments that are
subject to audit review.
The year-on-year fall in surplus reflects lower turnover in the
form of land sales, a low volume but high income generating
activity against an increase in rental income and higher operating
costs based on our commitment to deliver our key priorities.
Statement of Comprehensive Income 2019 Q1 2018 Q1 Change
(GBPm) (GBPm)
----------------------------------------------------- --------- --------- -------
Turnover
Non-sales 151 147
Sales 27 82
----------------------------------------------------- --------- --------- -------
178 229 (22%)
Operating costs and cost of sales
Non-sales (107) (84)
Sales (27) (76)
(134) (160) (16%)
Surplus on disposal of fixed assets and investments 9 7
Share of profits from joint ventures 5 2
Change in value of investment property - -
----------------------------------------------------- --------- --------- -------
Operating surplus 58 78 (26%)
Net interest charge and other finance costs (29) (27)
Other finance costs 2 -
Taxation - (1)
----------------------------------------------------- --------- --------- -------
Surplus for the period after tax 31 50 (38%)
----------------------------------------------------- --------- --------- -------
Capitalised Interest (9) (7) (2)
---------------------- ---- ---- ----
Statement of Financial Position 2019 Q1 31 March 2019 Change (GBPm)
(GBPm) (GBPm)
-------------------------------------------- -------- -------------- --------------
Housing properties 9,585 9,469 116
Other tangible fixed assets 69 69 -
Investments 1,654 1,649 5
Net current assets 1,035 966 69
-------------------------------------------- -------- -------------- --------------
Total assets less current liabilities 12,343 12,153 190
-------------------------------------------- -------- -------------- --------------
Loans due > one year 5,162 5,011 151
Unamortised grant liability 2,047 2,039 8
Other long term liabilities 327 327 -
Capital and reserves 4,807 4,776 31
-------------------------------------------- -------- -------------- --------------
Total non-current liabilities and reserves 12,343 12,153 190
-------------------------------------------- -------- -------------- --------------
Non-Sales Activities
Activity 2019 Q1 2018 Q1 Change
(GBPm) (GBPm) (GBPm)
Net rents receivable 140 136 4
Charges for support services 2 2 -
Amortised government grant 6 6 -
Other income 3 3 -
------------------------------------- -------- -------- --------
Turnover 151 147 4
------------------------------------- -------- -------- --------
Management Costs (12) (14) 2
Service Costs (18) (15) (3)
Maintenance Costs (41) (27) (14)
Support Costs (2) (2) -
Depreciation & Impairment (19) (18) (1)
Other costs (15) (8) (7)
------------------------------------- -------- -------- --------
Operating Costs (107) (84) (23)
------------------------------------- -------- -------- --------
Surplus on disposal of fixed assets 9 7 2
------------------------------------- -------- -------- --------
Operating Surplus 53 70 (16)
------------------------------------- -------- -------- --------
Capitalised Major Repairs (16) (16) -
--------------------------- ----- -----
Sales Activities
The cost of sales is inclusive of capitalised interest and
overhead costs:
Activity 2019 Q1 2018 Q1 Change
(GBPm) (GBPm) (GBPm)
Property sales income 25 41 (16)
Land sales income 2 41 (39)
-------------------------------------- -------- -------- --------
Turnover from sales (excluding JV's) 27 82 (55)
Cost of property sales (20) (40) 20
Cost of land sales (1) (32) 31
Operating costs (6) (4) (2)
-------------------------------------- -------- -------- --------
Total cost of sales (excluding JV's) (27) (76) 49
Operating Surplus (excluding JV's) - 6 (6)
-------------------------------------- -------- -------- --------
Joint venture turnover 87 19 68
Joint venture cost of sales (82) (17) (65)
-------------------------------------- -------- -------- --------
Share of profits from joint ventures 5 2 3
-------------------------------------- -------- -------- --------
Average Selling Price
The average selling price, including JV's, for outright market
sales during the financial year to date was GBP494k of which 95%
were conducted under Help to Buy. The average selling price of
first tranche shared ownership sales during the financial year to
date was GBP440k with an average first tranche sale of 38%.
Sales Margins
The cost of sales is inclusive of capitalised interest and
overhead costs:
Activity Shared Outright Land Sales Outright 2019 Q1 2018 Q1 Change
Owner-ship Sales (GBPm) Sales (JV's) (GBPm) (GBPm)
(GBPm) (Non-JV) (GBPm)
(GBPm)
Turnover 18 7 2 87 114 101 13
Cost of Sales (16) (6) (1) (80) (103) (89) (14)
--------------- -------------- ------------- -------------- ------------- -------------- -------------- -------
Gross Profit 2 1 1 7 11 12 (1)
--------------- -------------- ------------- -------------- ------------- -------------- -------------- -------
Gross Sales
Margin 11% 14% 50% 8% 10% 12% (2%)
--------------- -------------- ------------- -------------- ------------- -------------- -------------- -------
Operating
Costs - - (4) (2) (6) (4) (2)
Operating
Surplus 2 1 (3) 5 5 8 (3)
--------------- -------------- ------------- -------------- ------------- -------------- -------------- -------
Net Sales
Margins 11% 14% (200%) 6% 4% 8% (4%)
--------------- -------------- ------------- -------------- ------------- -------------- -------------- -------
Unsold Stock
As at 30 June 2019, L&Q, including joint ventures, held 479
completed units as unsold stock with a projected value of GBP176m.
Of these, 36% have been held as stock for less than one month.
L&Q's forward order book excluding joint ventures consists of
86 exchanged units with projected revenue of GBP17m and 167
reservations with a projected revenue of GBP37m.
Tenure Projected Revenue No. of Units <1 Month 1-3 Months 3-6 Months 6-12 Months >12 Months
(GBPm)
------------------- ------------------ ------------- --------- ----------- ----------- ------------ -----------
Shared Ownership 18 157 78 4 52 23 -
Outright Sale
(non-JV's) 75 156 34 30 38 52 2
Commercial 3 1 1 - - - -
------------------- ------------------ ------------- --------- ----------- ----------- ------------ -----------
Total excluding
Joint Ventures 96 314 113 34 90 75 2
Shared Ownership
(JV's) 2 44 4 18 21 1 -
Outright Sale
(JV's) 78 121 54 18 17 26 6
------------------- ------------------ ------------- --------- ----------- ----------- ------------ -----------
Total Joint
Ventures 80 165 58 36 38 27 6
------------------- ------------------ ------------- --------- ----------- ----------- ------------ -----------
Total Unsold Stock 176 479 171 70 128 102 8
------------------- ------------------ ------------- --------- ----------- ----------- ------------ -----------
Net Debt and Liquidity
As at 30 June 2019, net debt (excluding derivative financial
liabilities) was GBP5,081m (as at 31 March 2019: GBP4,886m) and
available liquidity within the group in the form of committed
un-drawn revolving credit facilities and non-restricted cash was at
GBP655m (as at 31 March 2019: GBP751m). Approximately 50% of
L&Q's loan facilities and 56% of drawn loan facilities are at a
fixed cost.
Unencumbered Assets
2019 Q1 31 March 2019
No. of units under management 104,400 103,917
No. of social housing units provided as collateral against debt facilities (48,623) (48,993)
No. of private rented units provided as collateral against debt facilities (1,107) (1,107)
---------------------------------------------------------------------------- --------- --------------
Total no. of unencumbered units under management 54,670 53,817
% of units under management held as collateral against debt facilities 48% 48%
Unencumbered asset ratio(11) 42% 42%
---------------------------------------------------------------------------- --------- --------------
L&Q Credit Ratings - as at date of trading statement
release
Rating Agency S&P Moody's Fitch
Long-term credit ratings A-/Stable A3/Stable A+/Stable
------------------------- ---------- ---------- ----------
Notes:
(1) Operating surplus + depreciation and impairment - amortised
government grant - capitalised major repairs +/- actuarial
losses/gains in pension schemes
(2) EBITDA / (turnover + turnover from joint ventures -
amortised government grant)
(3) EBITDA from non-sales activities / turnover from non-sales
activities
(4) Gross profit from sales / turnover from sales including
joint ventures
(5) Operating surplus from sales / turnover from sales including
joint ventures
(6) EBITDA / net cash interest paid
(7) EBITDA from social housing lettings / net cash interest
paid
(8) Net debt (excluding derivative financial liabilities) /
total assets less current liabilities
(9) Gross debt / EBITDA
(10) Sales turnover (including joint ventures) / (turnover plus
turnover from joint ventures)
(11) 100% less (loans due after more than 1 year + derivative
liabilities + unamortised grant liability) / total assets less
current liabilities
This trading update contains certain forward looking statements
about the future outlook for L&Q. Although the Directors
believe that these statements are based upon reasonable
assumptions, any such statements should be treated with caution as
future outlook may be influenced by factors that could cause actual
outcomes and results to be materially different.
For further information, please contact:
Martin Watts, Director of Treasury 0300 456 9998
For media enquiries, please contact:
James Howell, Head of External Affairs 0300 456 9998
Cathryn Rowley, Assistant Director,
Communications 0300 456 9998
www.lqgroup.org.uk
END
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
QRFGRGDIUUBBGCD
(END) Dow Jones Newswires
August 12, 2019 04:03 ET (08:03 GMT)
London Quad5.5% (LSE:44EB)
Graphique Historique de l'Action
De Fév 2025 à Mar 2025
London Quad5.5% (LSE:44EB)
Graphique Historique de l'Action
De Mar 2024 à Mar 2025
