Lovell has contributed to preliminary results for the year ended 31 December 2016, released today (23 February 2017) by parent company Morgan Sindall Group plc, the construction and regeneration group.
The Group’s adjusted operating profit was up 26 per cent to £48.8 million (FY 2015: £38.8 million) on revenues of £2,562 million which rose 7 per cent on the previous year (FY 2015: £2,385 million). The reported operating profit for the year was £47.4 million (FY 2015: £10.3 million loss). The Group finished the year with a significantly improved net cash position of £209 million (FY 2015: £58 million). Adjusted earnings per share were up 34 per cent on last year at 84.7p (FY 2015: 63.0p). The dividend for the year is 35.0p, a 21% increase from 2015’s 29.0p per share. The Group’s order book was also up 29% to £3.6 billion.
Nationally, Lovell delivered over 2,000 new-build homes in 2016 across a range of tenures creating homes for open market sale and for rent. Through long-term partnerships with housing association and local authority partners, the company undertakes new housing developments for both open market and rental accommodation, major home refurbishment schemes and large-scale housing renewal programmes.
Key projects include:
• Trinity Woolwich: a £394 million regeneration programme for three Woolwich council estates in partnership with the Royal Borough of Greenwich and asra Housing Group. The redevelopment will deliver 1,500 homes including 1,000 properties for open market sale and 500 affordable homes for asra. Lovell has just launched Trinity Walk, the development’s first collection of houses and apartments for sale.
• Lovell has been selected by the Defence Infrastructure Organisation as preferred bidder to develop around 900 homes on three sites on Salisbury Plain which will house service families returning from Germany. The contract sum will be around £200 million with the construction work taking two-and-a-half years to complete. The award follows the successful project at MOD Stafford where Lovell delivered 346 homes for service families in just over a year.
• An innovative partnership 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 by 2020. The new housing will be entirely funded by the Council with Lovell designing and selling the homes through a development management agreement, as well as building them. Lovell has just started building Orchard Place, a development of 130 homes (110 for open market sale and 20 affordable properties) at Marsh Lane, King’s Lynn, which make up the first tranche of new housing.
• Lovell recently began construction work at The Mill, Canton: an 800-home, £100 million urban village at the 53-acre former Arjo Wiggins Paper Mill site in west Cardiff. One of Wales’ largest regeneration programmes, The Mill will be a brand-new sustainable community featuring houses and apartments in a riverside setting, as well as providing new business, commercial and recreational space. The scheme is being delivered by a partnership of not-for-profit residential developer, investor and estate manager Tirion Group, Principality Building Society, partnership housing developer Lovell and Cadwyn Housing Association. The development will provide 358 homes for open market sale by Lovell and 442 homes for rent for the Tirion Group. The homes for Tirion – which will be managed by Cadwyn – are made up of 325 properties for discounted rent, 42 homes for open market rent and 75 homes for social rent. Tirion acquired and cleaned up the long-derelict paper mill site with a commercial loan from the Welsh Government and financial backing from Principality Building Society, and is developing it in partnership with Lovell.
• A £19 million, 166-home development for Birmingham Municipal Housing Trust in Perry Common, Birmingham, where construction began last autumn.
• A £16.6 million regeneration scheme in Hull which will deliver nearly 800 new homes. As part of Compendium Living, Lovell is currently building 83 affordable homes at The Leeway, Hull, with work on a further 68 homes about to start.
• £67 million of work through West Lothian Council’s new-build social housing programme. Lovell is currently working on more than 300 homes through the scheme which will ultimately create 775 new homes across 17 sites.
• The 99-home second phase of the £22 million redevelopment of the Queens Park estate in Blackpool for Blackpool Council. The overall scheme – which involved the demolition of the estate’s last three tower blocks in July 2016 – will deliver 191 new affordable rented houses and apartments.
Lovell managing director Jonathan Goring comments: “In 2016 our partnerships with housing associations and local authorities continued to grow. We are particularly well placed to obtain work through these long-term relationships as we are able to provide partners with expertise in developing homes for a variety of tenures. Working with our partners, we provide homes for sale on the open market alongside homes for affordable rent, shared ownership and other forms of low-cost home ownership. We expect these partnerships to increase in number over the next few years.
“During the year, we saw the housing market continue to improve and we have maintained investment in new mixed tenure regeneration projects leaving us in a strong position to grow the business in the future. There is now agreement across the political spectrum that we need more housing in the UK. We expect much of these new homes to be developed through the use of public sector land as a way of increasing supply. Our experience of delivering in partnership with the public sector means we have a solid base for growth over the coming years.”