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Ilke Homes’ losses widen to £41m as pandemic curtails growth
Modular housing specialist Ilke Homes has racked up another significant annual loss as it blamed the pandemic on hampering its growth.
Ilke Homes saw its losses widen to £41.3m in the year to 31 March 2021, compared with a loss of £34.6m in the previous year #UKhousingThe private equity-owned firm, trading as Ilke Homes Holdings, saw its losses widen to £41.3m in the year to 31 March 2021, compared with a loss of £34.6m the previous year.
However, the Yorkshire-based organisation said it expects to achieve a “positive EBITDA [earnings before interest, taxes, depreciation and amortisation] trajectory” in the current financial year and has a current order book worth around £300m.
Since its launch in 2016, Ilke has recorded losses of more than £100m as it dealt with significant start-up costs amid the fledgling offsite sector.
Other big offsite players such as Legal & General and Goldman Sachs-owned TopHat have also incurred major losses.
Last year, Ilke secured an extra £60m in funding, which included another £30m loan from Homes England. Giant housing associations Place for People and The Guinness Partnership have also invested in the firm by taking minority stakes.
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Places for People signed a £100m deal with Ilke in 2019 and Guinness has agreed two deals for 250 factory-built homes.
Ilke said its last full-year was “significantly impacted” by the effects of the pandemic, including a drop in demand. Despite this, its annual turnover more than doubled to £27.5m as the number of homes it delivered increased to 199.
Nearly half of the firm’s revenue came from its ‘Homes’ business, while a similar share (£12.2m) was from its ‘Land’ business.
A total of 518 staff were furloughed at the start of the pandemic and in the year Ilke received £3.77m from the government’s furlough scheme. Pay for its executives was cut by 20%.
A restructure last summer saw 122 workers made redundant, the company revealed in accounts filed at Companies House this week.
“As a result of this unprecedented interruption to the markets and operations of the business, the company’s progress in achieving the business scale that will drive manufacturing efficiencies and a recovery of overhead has been delayed,” Ilke said.
It said the losses were “as anticipated by management and shareholders”.
In the accounts, Ilke said its directors had “received confirmation” that its main owner, TDR Capital, intends to provide or arrange for the provision of financial support to the company “should it be so required in order to meet its reasonably incurred obligations”.
Ilke has 52 active sites and a pipeline of around 3,000 homes, according to a blog posted on its website last month.
The company has said it aims to be a top 10 house builder in the UK within the next five years.
An Ilke Homes spokesperson said: "Our results from March 2020 to March 2021 were impacted by the full force of the pandemic, including multiple lockdowns. Despite this, the business continued to grow on all metrics and by the end of March 2021 returned to full growth.
"Since the end of 2021’s financial year in March, Ilke Homes has achieved a contracted order book that exceeds £300m and a total pipeline of over 3,000 homes, putting the business on par with some of the UK’s largest developers."
Update: at 3.45pm, 6.01.22 This story was updated to include a comment from an Ilke Homes spokesperson and a latest order book figure.
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