Yahoo Finance L&G’s modular homes venture reports £94m loss as it winds down business
Legal & General’s modular homes subsidiary reported losses of almost £94m last year as the insurance giant moved to close its factory and run down the pet project of outgoing chief executive Sir Nigel Wilson.
In May L&G announced the builder would cease manufacturing at its plant in Leeds and wind down the business after completing its existing housing developments at Broadstairs, Kent, Selby, North Yorkshire, and Bristol – the flagship development where homes had to be removed after it uncovered problems with the foundations.
In accounts filed at the weekend, Legal & General Homes Modular (LGHM) reported a loss after tax of £93.9m in the year to the end of last December, against a loss of £29m a year earlier.
LGHM has reported losses of almost £235 million since its creation in 2016.
The company, which employed 549 staff last year, said in the accounts: “This is largely the result of increased costs to deliver at each of the existing sites, additional overhead costs incurred in support of business growth objectives and balance sheet impairment impacts following the decision to close the factory and reduce business operations.”
LGHM also revealed that the company would cease operations by June 2025.
Revenues for LGMH grew to £39.9m, against £12.2m in 2021. But L&G was forced to plough in £51.6m, against £34.8m in 2021, “to allow it to execute its strategy”.
The highest paid director, who was not identified and works across the L&G Group, received £552,855 last year in total, made up of £334,743 in “short-term employee benefits” and £218,112 in share-based incentive awards.
Rosie Toogood, the chief executive, stepped down in June after six years at the helm.
The modular homes business was part of a push to build 10,000 homes a year by L&G chief executive Wilson, who announced his decision to step down in January after more than a decade leading the insurer.
“Modular housebuilding is exactly the sort of inventive, forward-thinking solution that’s needed for the UK to fix its property crisis and deliver a housing market that caters equally to all members of society,” L&G states on its website.
Last year Wilson, 66, blamed the planning system for hindering the modular homes subsidiary’s growth. “The challenge is the speed of planning in the UK, and the interaction between planning and manufacturing isn’t great,” Wilson told Housing Today.
L&G is not alone in losing its bet on modular housing. In June builder Ilke Homes collapsed into administration under debts of £368m, with government agency Homes England to lose much of the £68m it is owed. Last year Manchester-based Urban Splash House went under with debts of more than £20m.
