Leading residential developer London Square has delivered a strong performance and its best sales results so far in its latest annual results - 10 years on from the launch of the company in 2010.
London Square completed on 559 homes, up from 253 in 2019. Revenues rose to £272.4m (2019: £168.3m). Revenue under management increased to £314.2m (2019: £196.6m). Operating profit was up to £10.8m (2019: £6.5m).
Forward sales are £190m, up from £180m in 2019. The land pipeline of 2,353 homes represents £1.2bn in gross development value.
The Group delivered a strong operational performance, achieved despite the impact of the growing likelihood of the UK leaving the EU without a formal withdrawal agreement and the year-end being impacted by the effects of the COVID-19 pandemic. The Group continued to successfully implement its strategy and diversify the activities of the business, with the strongest year yet in residential sales, with 559 units delivered; London Square Partners, with significant contracts being achieved with Peabody and Clarion and post-year end with One Housing, improving the Group’s Land Bank. These achievements were backed by strong cash generation, successfully reducing the net gearing levels, finishing the year in a good liquidity position, with a solid forward sales position, setting the Group up well for the next financial year.
These are our best results since launching in 2010 at the height of the recession. This year has continued with uncertainty about the UK and its future on leaving the EU, plus the immediate impact of the Covid-19 pandemic. All our sites and sales offices had re-opened by May 2020 and although, with Government restrictions in place, we are operating at 80 per cent capacity, we are confident that delivery can be maintained.
We continue to have a complicated planning process despite the Government’s desire for more housing and its recent announcements on planning reform. We have invested in four new sites, including one in Greenwich for over 700 homes. However, difficulties with achieving planning continues to restrict activity. Three new planning consents added 221 homes, up from 104 in 2019.
We now need to see the Government showing leadership and clarity on our future outside the EU to improve consumer confidence. We also need more support from the Government on extending Help to Buy beyond its current deadline of 31stMarch next year, and to make it easier for buyers purchasing outside London using Help to Buy by lifting the restrictive caps which will be in place from 1 April 2021.