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Post-tax losses at failed L&G modular builder top £279m
Post-tax losses at Legal & General (L&G)’s failed modular house builder have topped £279m, new accounts have shown.
L&G Modular Homes posted a post-tax loss of £44.3m in the year to December 2023, within which it decided to stop production at its factory near Leeds and wind down the business.
Losses at the volumetric developer were down on the previous year, when it posted its highest post-tax loss in history at £93.9m.
The latest figure means that total post-tax losses over L&G Modular’s eight-year history add up to £279.2m.
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It admitted that the lower losses for 2023 were largely because impairment charges around the closure of its factory had been booked the previous year.
During 2023, L&G Modular completed sites in Broadstairs, Kent and Selby in North Yorkshire and handed over 138 new homes. It posted revenue of £12.4m, down from £39.9m in 2022.
The accounts said the company is “continuing its activities” at its final live site in Bristol.
As of December 2023, it held net liabilities of £6.1m, up from £1.4m the previous year.
Losses incurred in 2023 included £37m on administrative expenses, £166,300 on disposal of fixed assets and £17m of impairment charges.
In May 2023, the firm announced it was halting production at its factory in Sherburn-in-Elmet, North Yorkshire, and making most of its 475 staff redundant. The winding-up process is expected to complete by June 2025.
L&G Modular has sustained losses every year since its foundation in 2016 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.
Alongside L&G Modular’s collapse, last year the Category 1 modular sector was rocked by the demise of Ilke Homes. House by Urban Splash, a joint venture between developer Urban Splash, Japanese builder Sekisui House and Homes England, also went into administration in 2022.
The biggest remaining modular house builder is Goldman Sachs-backed TopHat, which in August settled a dispute with one of its creditors out of court.
Post-tax losses at L&G Homes Modular
- 2023 – £44.3m
- 2022 – £93.9m
- 2021 – £29m
- 2020 – £25.4m
- 2019 – £24.4m
- 2018 – £16.8m
- 2017 – £37.9m
- 2016 – £7.5m
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