London Square expansion delivers stellar annual results
Leading residential developer London Square has delivered a strong performance in its latest annual results – demonstrating the results of expansion with its strongest year ever in private sales and more than doubling of its forward sales driven by the success of its expansion into affordable housing and Build to Rent.
The latest results, year ended 31st March 2022, show a significant increase in operating profits, forward sales more than doubled and its land pipeline up to 4,897 homes homes, worth £2.5bn in gross development value.
Operating profit increased to £30.7m (2021: £17.0m), with a gross profit margin of 20.5% (2021: £21.3%). The gross tangible asset value was up - £263.0m (2021: £226.3m) and the net tangible asset value increased to £169.5m (2021: £148m), with the Group maintaining a high level of liquidity, finishing the year with £48.2m of cash on the balance sheet.
The number of homes completed was 502 (2021: 328). Forward sales increased to £456.2m, up from £195.4m in 2021
Mark Pain, Chairman, London Square, commented in his statement that despite a challenging economic background with the lingering impact of the pandemic, ongoing Brexit uncertainty and the Russian invasion of Ukraine all pushing costs upwards: “Encouragingly, the business continued to deliver on its strategy to expand into partnerships-based business lines with Square Roots and London Square Living both growing significantly during the year, contributing to a more diverse and robust business.”
Developed Affordable Housing Initiative through Square Roots
In construction on four sites with our partner, Federated Hermes, and achieved registered provider status. Further sites are in the pipeline.
Developed Build to Rent partnership through London Square Living – contracted on the Nine Elms scheme, the largest single development undertaken by the Group with 756 homes, 467 are Build to Rent, and with offers accepted on two further BTR schemes.
Grow Partnerships – during the year the Group continued to build on its Partnership strategy – being selected as preferred bidder for the regeneration of Brixton Recreation Centre with Lambeth Council for a 240 unit scheme, of which 49% are affordable.
Delivered growth – increasing gross tangible asset value by 16.2% (12.8%), which is reflected in the land bank increasing by 38.2% to 4,897 units (2021: 3,543).
Delivering Sustainability Platform – tangible impact has been achieved through various initiatives implemented from significant social impact, through the delivery of affordable housing to the doubling of our efficiency in reducing our carbon footprint.
Adam Lawrence, Chief Executive, London Square, said: “Despite the uncertainty of the economic environment, for the housing market the demand supply imbalance appears to be here to stay. The current trading activity of the Group has been positive, and the Group remains on track for delivery of its planned residential unit sales. The significant forward order book position of £497m provides a solid underwriting of the outlook, especially with £235m already contracted for the next financial year. There is some exposure to the commercial property market where investor appetite remains to be proven during this period of uncertainty. The economic backdrop has also brought about cost pressures, particularly on material prices. Processes put in place continue to prove effective at managing these increases in the current market. We are very excited about the prospect of the coming year.”