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L&G’s modular business posts further £30m loss
Legal & General is “pleased” with its modular housing business despite the subsidiary posting a further £30m in losses for 2020 as it was hit by the pandemic.
The £30.2m pre-tax loss to 31 December 2020 was slightly less than the £30.6m loss for the year in 2019.
Like last year, no revenue was recorded and the combined losses for the division are now approximately £130m.
A spokesperson for the business said “true innovation doesn’t happen overnight”.
Other major off-site specialists, including Ilke Homes and Goldman Sachs-backed TopHat, have also continued to post significant losses as they deal with start-up costs.
Legal & General (L&G) said its modular business has been affected by the impact of the COVID-19 pandemic and pre-emptively closed its Yorkshire-based factory in March last year before the first national lockdown.
However, it said all staff continued to receive full pay and the government’s furlough scheme was not used.
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The shutdown allowed L&G to implement a new safety routine, with the factory reopening a month later, the firm said.
The annual statement noted that “employees in office-based roles switched seamlessly to working from home, allowing the company’s design and business development activities to continue. The shutdown period was also used to undertake a full risk assessment of production activities in the factory and plan new safety measures to make the facility ‘Covid secure’.”
L&G said the long-term impact of COVID-19 will be dependent on any fluctuations in house prices and demand.
The company did secure planning permission during the year for schemes in Selby and Bristol, with groundworks on the Selby scheme starting in December 2020.
L&G Modular Limited also increased its headcount during 2020. The number of staff rose to 269, compared with 180 in 2019.
It received £37m in funding from its parent company, Legal & General Homes Holdings Limited. The modular firm made a £20.7m loss in 2018, a £46.1m loss in 2017, and a £9.2m loss in 2016.
A spokesperson for L&G Modular Homes said: “Our modular housing business is designing and manufacturing homes in an innovative way which will transform the way homes are built.
“True innovation doesn’t happen overnight and, like most start-ups, our business plan anticipated a number of years of upfront investment to develop the products and processes required for the business to deliver profitably at scale.
“We are pleased with the positive progress that we have made this year, and are now active on site to deliver 450 homes across developments in Selby, Bristol and Broadstairs.”
The division announced in July this year that it was partnering with Town & Country Housing, part of Peabody, to deliver a 153-home scheme in Broadstairs, Kent.
The spokesperson added: “Planning approval is also being sought for further schemes, which will deliver an additional 300 homes. Our first scheme in Selby is now being marketed and we expect to complete the sale of the affordable housing to a local housing association in Q4 2021, closely followed by the Bristol development.”
