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Modular homes specialist Ilke Homes posts £22m loss
Start-up modular homes builder Ilke Homes has reported a £22.3m loss for the year to March 2019 in its latest financial accounts.
The Yorkshire-based company, which has become a poster child for modern methods of construction, made less than £2.7m of revenue during the 12 month period, £2m of which came from a sale to housing contractor Keepmoat.
The latest loss follows a loss of £7.7m for the previous eight months, meaning since the company was formed as a collaboration between Keepmoat and steel-frame offsite specialist Elliott Group in 2017, it has racked up losses of more than £30m.
The accounts attribute £16.1m of the costs in the year to “administrative expenses”, without giving further details. During the period, Ilke was mostly developing its product rather than selling homes.
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However, since March, the company’s fortunes have improved. Last month it secured £30m of investment from Homes England’s Home Building Fund, which will help boost the capacity of its factory to 5,000 homes per year within the next five years.
The factory is expected to deliver 2,000 homes next year.
It also won a contract to provide 750 homes for housing association Places for People earlier this year.
Ilke is backed by UK private equity firm TDR Capital and the accounts include a statement confirming that TDR had agreed to “provide or arrange for the provision of financial support” if required.
A spokesperson for Ilke Homes said: “Investing upfront in capital intensive manufacturing capability will help address growing skills shortages in construction, and we are proud of the training and employment opportunities now being provided at our Yorkshire facilities. Without the kind of investment we are making, Britain will not be able to achieve the capacity needed to tackle the housing crisis.
"Offsite manufacturing will help us create better quality, sustainable housing vital to meeting the UK’s climate obligations. A well-capitalised business with a growing pipeline of work as well as having backing from central government, we are highly positive about the year ahead and steadfast in our desire to invest private capital to help alleviate the UK’s housing challenges.”
Ilke’s report follows the news that insurer Legal & General (L&G) is to move away from using timber as a structural material for its modular apartments, allowing it to circumvent the government’s ban on combustible materials, as it seeks to shore up its own modular plans.
The latest figures for subsidiary L&G Modular Homes showed it suffered a loss of more than £20m last year, although that was less than the £46.15m loss reported in 2017. L&G invested £23.2m into the division during the year.
