Lovell announces record profits in latest financial results

With profits totalling £37.4m, partnership housing specialist Lovell has announced another record performance in year-end figures published today. Up 12.7% compared with last year, these results have made a significant contribution to the overall performance of parent company Morgan Sindall Group plc, whose impressive year-end financial results were also unveiled earlier this morning.

The Group delivered a strong performance in 2022, with significant strategic and operational progress made across the business despite the market headwinds. The results were another record for the Group and reflected the high quality of the Group’s operations and the talent and commitment of its people.

Group revenue increased by 12% up to £3,612m while adjusted* profit before tax increased 7% to £136.2m.  The Group’s balance sheet remains strong with net cash of £355m, and with a high-quality secured workload of £8.5bn, the Group is looking forward with optimism.

*Before exceptional building safety charge of £48.9m and intangible amortisation of £2.0m

Lovell has achieved significantly strong financial results with revenue up 22% to nearly £700m (FY 2021: £572m).  Operating profit of £37.4m was up 12.7% on the prior year (FY 2021: £33.2m), along with an excellent Return on Capital Employed of 19%.  The secured order book at the year-end was £3.4bn, representing a 23% improvement on last year’s position and a clear reflection of the successful strategic growth and partnership model.

Lovell regional managing director, James Duffett says: “2022 has seen us deliver record financial results with strong growth achieved in revenue and profits across the board. Throughout both mixed tenure and contracting activities, we’ve increased the volume of units completed to almost 4,000 (YE 2021: 3,000) whilst also increasing our ongoing portfolio of long-term joint ventures and contracting schemes.

“The year end results are fantastic, especially given the continued turbulence in the UK economy and the wider landscape of construction material shortages, inflationary cost increases and slow planning progression in parts of the UK.  Our success is undoubtedly testament to the ongoing strength and commitment of the entire Lovell team, our supply chain and our partners who work relentlessly to achieve our ambitions.

“As we enter an even more challenging time for the housing industry, it is pleasing to know that our partnership model offers us some protection from projected market conditions.”

Lovell is working on key projects including:

  1. The Mill, Cardiff – Work is well underway on the final phase of the affordable homes programme, which will see a further 262 affordable homes delivered for rent through Tirion Homes and Cadwyn, as well as five retail units. The final phase, Phase D, commenced piling operations in February 2022, and will be completed in autumn 2024. As Wales’ largest regeneration project, the development is delivering 800 mixed-tenure homes in total.
  2. Foxglove Meadows, Weston-super-Mare – This £32m development, adjacent to Woodside Avenue, is due to complete in April 2023. The development is delivering 81 open market homes and 49 affordable homes for rent and shared ownership with Abri.
  3. Royal Victoria Court, Newport – This regeneration scheme on the former Whiteheads steelworks is well underway, delivering 528 properties, in partnership with Tirion Homes, Melin Homes and Welsh Government. The development consists of 264 open market homes, 234 affordable homes for rent and shared ownership, and an additional 30 homes for low cost home ownership. The three showhomes at the £85m development opened in November 2022, and the first residents have already moved in.
  4. Drummond Park, Ludgershall – Three showhomes at this £110m former Defence Medical Equipment Depot development are officially open, following a launch event in August 2022. The site, which is being delivered in partnership with Homes England and Stonewater, will provide 412 homes, including 309 for open market sale and 103 affordable homes. At the development, Lovell is running a Veteran Community Build scheme with Stonewater, Alabaré and Wiltshire Council, which is providing ex-military personnel with work, mentoring and the opportunity to secure a new affordable home.
  5. Locke Gardens, Llanwern – This £105m development delivering 500 new homes is underway. The site is part of the wider Glan Llyn development by St Modwen, and will bring 285 open market sale homes and 215 affordable homes in partnership with Pobl. The development, and its two showhomes, launched in November 2022.
  6. Chartist Garden Village, Pontllanfraith – Work on this design and build scheme for Pobl and Caerphilly County Borough Council is underway. The site will deliver 123 homes, including 40 for open market sale and 83 affordable homes for rent and shared ownership, and is expected to be completed in summer 2024.
  7. Elderwood Parc, Crick Road, Portskewett – Construction work is underway on this design and build project for Melin Homes, Candleston Homes and Monmouthshire County Council. The £45m development will create 201 open market homes and 68 affordable homes. A £7m 32-bedroom care home, called Severn View Park, is also being delivered and will be managed by Monmouthshire County Council. The project will take approximately four and a half years to complete.
  8. Lansdowne Hospital site, Cardiff – A building contract has been awarded for this design and build scheme to deliver 106 new homes, including 68 properties managed by Hafod and 38 properties managed by Cardiff Council. Remediation work on the £24m project commenced in November 2022, with construction work due to commence in March 2023.
  9. Ringland Regeneration, Newport – Construction work on the next phase of the “Ringland Regeneration” project for Newport City Homes is due to commence in May 2023. The £34m project is set to be delivered over four phases, and provide 158 new homes and the relocation of the Ringland shopping centre.
  10. Oakfield, Swindon – Lovell has begun work on this design and build scheme for Nationwide Building Society to deliver 239 mixed-tenure homes. Work on the site commenced in August 2022 and is expected to be completed in summer 2024.

To view the Morgan Sindall Group plc year end results video, click