You are viewing 1 of your 1 free articles
L&G sees post-tax modular losses soar to £94m after writedown of assets
Legal & General’s (L&G) modular housing arm, which is currently being wound down, has reported annual losses of nearly £94m.
The subsidiary recorded a post-tax loss of £93.9m in the year to the end of December 2022, its highest loss in its seven-year history. On an operating basis, the loss was £119m.
It comes after L&G announced in May that it was halting production at its factory near Leeds and reducing business operations, including making the majority of its 475 staff redundant.
Newly filed accounts at Companies House said this process is now due to complete by June 2025.
READ MORE
The latest loss has come after the firm booked impairment charges of £76.7m related to the decision to close its factory. This included a £39.7m impairment on property, plant and equipment, plus a £36.7m writedown on stock.
L&G also blamed “increased costs” to deliver projects and extra “overhead costs” to support it “business growth objectives”.
L&G Modular, whose clients include housing associations and councils, has racked up around £234m of losses since its launch in 2017 and only recorded its first revenue in 2021.
The firm admitted it had been unable to secure a big enough pipeline of work to sustain the business.
The subsidiary has also faced technical problems with its homes and been forced to dismantle some due to issues with the foundations.
The 2022 loss came despite the firm more than tripling its revenue to £39.9m.
It comes amid a difficult time for the image of the modular housing sector following the collapse of Ilke Homes this summer and the demise of House by Urban Splash last year.
However, the chair of Goldman Sachs-backed TopHat told a parliamentary inquiry last month that there was “zero chance” of the government’s 300,000 homes a year target being hit without modular housing.
Sign up for our development and finance newsletter
Already have an account? Click here to manage your newsletters
