Partnership housing specialist Lovell has contributed to half year results released today (2 August 2016) for the six months to 30 June 2016, by parent company Morgan Sindall Group plc, the construction and regeneration group.
The Group has delivered strong profit growth in the first half of this year with operating profit before amortisation and exceptional operating items up 17% to £18.2 million (HY 2015: £15.5 million) on revenue of £1,148 million (HY 2015: £1,152 million). The Group reports an order book of £3,148 million, an 11% increase from £2,826 million, supported by a £3.2 billion pipeline of regeneration schemes, up 1% on the previous year-end position. Adjusted earnings per share saw a 22% rise for the period to 29.8p (HY 2015: 24.5p). The interim dividend has been increased by 8% to 13p per share (HY 2015: 12.0p) with the Group on track to deliver a full year result slightly above previous expectations.
During the first six months of this year Lovell has been working with housing associations and local authorities on new affordable housing developments, major housing refurbishment schemes and regeneration programmes across the UK.
Key projects include:
- The Mill: the company has been appointed by the Tirion Group to deliver one of Wales’ largest city regeneration programmes which will create an 800-home, £100 million urban village at the 53-acre former Arjo Wiggins Paper Mill site in Canton, Cardiff. Work on the new homes is set to start in autumn 2016. The flagship scheme will create 358 homes for open market sale by Lovell and 442 homes for Tirion which will be for rent through Cadwyn Housing Association.
- A £384 million regeneration programme for three council estates in Woolwich, south-east London, in partnership with the Royal Borough of Greenwich and asra Housing Group. Construction began in June on the first homes to be built through the redevelopment which will deliver 1,500 homes including 1,000 properties for open market sale and 500 affordable homes for asra.
- £67 million of work through West Lothian Council’s new-build social housing programme in Scotland’s central belt. Lovell is building developments across 17 sites creating 757 new council homes. Eight of the projects are currently on site including Redhouse which consists of 100 homes and Kirkhill where 230 homes will be built.
- A development management agreement with the Borough Council of King’s Lynn and West Norfolk which will see Lovell build up to 600 homes with a potential value of up to £80 million in the King’s Lynn area over the next five years. Lovell is set to start work this month on 130 homes at Marsh Lane, King’s Lynn, which make up the first tranche of new housing.
- As part of Compendium Living, Lovell is building The Leeway, a £7 million development of 65 homes in the Ings area of Hull. The scheme will create 39 homes for open market sale by Lovell and 26 homes for the Together Housing Group for shared ownership.
- In Telford, Lovell is working on a £40 million design-and build contract to deliver 134 homes in Telford for Telford and Wrekin Council. Later this year, Lovell is set to start construction on a further 145 homes at two sites as part of the ongoing relationship with Telford and Wrekin Council.
- Lovell is building East Avenue, a £22 million regeneration development of 164 homes at Toxteth Street, Openshaw, Manchester in partnership with Manchester City Council.
Lovell managing director Jonathan Goring says: “The housing market has continued to thrive through 2016, with values holding well and demand strengthening for the Lovell offer to local authorities and housing associations. Demand is supported by the increased appetite for central and local government to release land and encourage a collaborative approach to planning, in order to promote development of new homes and generate land receipts and income.
“The result of the EU referendum has thus far had no effect on house sales and levels of activity in our main areas of operation. We continue to insulate ourselves from the political and local effects by focusing on long-term partnerships and strategic land assembly and we avoid reliance on lower margin contracting in favour of longer term, secure pipeline work. Refurbishment remains core to our business and we continue to deliver strong performance in partnership with local authorities.
“Our avoidance of the over-heated central London residential market has paid off, as has our focus on outer city regeneration schemes, such as our 1,500-home development in Woolwich, which recently began on site and The Mill in Cardiff, where work starts later this year.”