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Summary
The Shareholder Committee of Hounslow Council met to discuss the performance of the Hounslow wholly owned companies, known as the Lampton Group, and to note their financial position. The meeting was also scheduled to cover the minutes of the previous meeting and any urgent business.
Lampton Group Performance
The committee was scheduled to note the Quarter 3 (Q3) 2024/25 financial and performance summary of the Lampton Group of companies. According to the report pack, the Lampton Group includes:
- Lampton Services
- Lampton Investment
- Coalo
- Lampton Greenspace
- Lampton Recycle
- Lampton Leisure
- Lampton Development 360 LLP
The report pack stated that the companies provide front-line services on behalf of the council and play a key role in helping the council achieve its corporate priorities.
The report pack noted some performance highlights including:
- The delivery of 176 new homes, providing 124 homes to the HRA and 52 homes to Lampton Investment 360 Limited for private rental.
- An improving working relationship between Coalo and the council, with collaboration in developing a new operating model.
- Winter works undertaken by Lampton Greenspace, and the support of nearly 5,000 hours of volunteering in parks.
- An extremely successful Christmas and New Year collection period for Recycle, with adjusted schedules and minimal service failures.
- Continued strong growth in January for Leisure, with a net gain in fitness memberships and swim school enrolments.
The report pack also included a table showing the actual financial performance for the year to date (YTD) and full year forecast as reported by Lampton Group for the end of December 2024.
| Q3 YTD 2024/25 | Full Year 2024/25 | |||||
|---|---|---|---|---|---|---|
| Profit / (Loss) £'m | Q3 Actual | Budget Variance | Forecast | Budget Variance | ||
| Lampton Services * | (0.8) | (0.8) | (1.2) | (1.1) | ||
| Lampton Investment ** | (2.5) | 0.0 | (2.6) | 0.0 | ||
| Total underlying contribution | (3.4) | (0.7) | (3.8) | (1.0) | ||
| Group | (0.6) | 0.3 | (0.2) | 1.0 | ||
| Group underlying surplus/(loss) | (4.0) | (0.5) | (4.0) | 0.0 | ||
| Coalo voluntary redundancy | (1.3) | 0.0 | (1.3) | 0.0 | ||
| Transformational spend | (0.4) | (0.4) | (0.9) | (1.2) | ||
| Adjusted Performance | (5.8) | (0.9) | (6.2) | (1.2) |
* Excludes Coalo VR loss ** Excludes revaluation losses
The report pack stated that Lampton Group made a loss of £5.8m at the end of Q3, which is £4.8m behind budget. The Q3 year to date results include one-off costs of £0.4m of transformational costs and £1.3m of voluntary redundancy costs incurred by Coalo Ltd. Further one off costs of £0.9m for Lampton Investment related to Westward House.
The full year forecast as at Q3 for Lampton group is largely stable from Q2, presenting a forecast loss of £6.2m. The budget assumed a loss of £1.2m from transformational spending, so the forecast for year-end is an adverse position against budget of £5m.
The report pack stated that the 2025/26 business plan full-year forecast loss of £0.8m across the Group is an improvement on the 2024/25 position, having moved away from one-off cost impacts in 2024/25 into a more stable position.
The report pack also provided an update on the 2023/24 financial performance, with the position reported to Shareholder Committee on 19 December 2024 having been revised as the intercompany reconciliation and audit of the companies’ accounts is reaching its conclusion.
The report pack stated that Lampton Development 360 LLP completed the New Road Triangle development, disposing of units on the site to Lampton Investment 360 Ltd and the Council. This is the only significant activity during 2024/25 and is expected to result in the business delivering a loss of £0.1m for the 2024/25 subject to the final account for New Road Triangle. This loss reflects the small profit being achieved from the completion of New Road Triangle offset by costs incurred on early stage feasibility work for a potential development at Gunnersbury Triangle which is not being progressed.
The report pack noted that the Hounslow corporate risk register included the risk “FR0004 Financial exposure to Lampton Group of companies”, which is recorded as Medium High Risk.
The report pack stated that continued trading losses are likely to require additional cash flow support from London Borough of Hounslow. The council will continue to review the provision it needs to make to mitigate any losses that the Group is recording.
The report pack stated that the Executive Director of Finance and Resources had agreed to extend cash flow support to the Group to ensure that its staff and creditors can be paid and that vital services are not interrupted. At the time of writing the report, the council had received an updated report on the future cash flow needs of the companies, this indicates that Lampton Group will need an additional cash advance of £4.6m to support its activities in 2025/26.
The report pack stated that the companies require cash flow support due to the brought forward and continuing losses. The council is committed to supporting the companies but will need them to provide additional detail about the timing of the required support. It also needs commitment to developing a medium-term financial plan for the business which demonstrates the companies will become profit making.
The report pack stated that the Shareholder Committee will expect to receive regular updates on both company and cash flow position performance. The full implications of the council providing additional cash advances for delivery of services will need further professional advice to ensure the council does not breach the provisions of the Subsidy Control Act 2022 or pay more to the companies than the amounts agreed for the services it will receive.
The report pack stated that Lampton Development 360 LLP is carrying c£2m of feasibility costs on 4 sites that have not yet secured planning permission. To progress these sites further the council would need to provide financial support through a new loan or other arrangement.
Minutes of the Previous Meeting
The committee was scheduled to approve the minutes of the meeting held on 11 February 2025 as an accurate record, subject to the amendment of Robert Graves' name to Robert Overall in the list of attendees.
Attendees
