Guinness pays £10m for stake in offsite specialist Ilke Homes
The Guinness Partnership has become the latest large housing association to take a stake in offsite specialist Ilke Homes by paying £10m for a minority shareholding, it has emerged.
Guinness Developments Limited, a subsidiary of the 64,000-home landlord, has taken a 4.3% stake in private equity-owned Ilke.
Guinness, which last week reported a near doubling of its surplus, has signed two deals with Ilke in the past year for 250 factory-built homes.
Catriona Simons, chief executive of Guinness, said: “Our investment in Ilke Homes demonstrates our continued commitment to delivering high-quality, energy-efficient homes as quickly as possible, to those who need them most.”
Guinness joins Places for People in becoming an investor in the modular homes specialist, after placing orders with the Yorkshire-based firm. In 2019 Places for People signed a £100m deal with Ilke.
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In June this year it emerged in Ilke’s accounts that Places for People had invested £10m in the firm. Places for People’s accounts last week revealed that it has an 8% stake in the offsite specialist.
Former Crest Nicholson boss Stephen Stone, who joined Ilke’s board in March, said: “The fact that our own clients continue to either invest or increase their stakes in the company is testament to the dynamic approach Ilke Homes has taken to housebuilding in the last three years.”
Overall Ilke Homes has secured £60m in fundraising in the past few months as it aims to deliver around 10,000 homes over the next five years.
The fresh round of funding has included a new £30m loan from Homes England, which was revealed in the company’s delayed accounts published in June.
The loan comes on top of the same amount Ilke borrowed from the government agency in 2019. Both loans are through Homes England’s Home Building Fund.
TDR Capital and Sun Capital Partners, the private equity backers of Ilke, have also injected an undisclosed amount of extra capital into the firm.
Ilke has racked up losses of more than £100m since its launch in 2016. In its last reported full-year accounts to the end of March 2020, it posted a loss of £34.6m on turnover of £12.7m.
Other major firms operating in the space have also struggled as start-up costs weigh down the bottom line. Legal & General Modular Homes revealed earlier this month a further £30m annual loss, while reporting zero revenue.
The government continues to talk up and support the fledging sector. Under the government’s new £8.6bn Affordable Homes Programme, 40% of homes are expected to be built using modern methods of construction.
UPDATE: This story was updated at 14.30 on 27 September to include the size of shareholding and the amount Guinness paid for it.
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