Legal & General trimmed its losses as it prepares to wind down its modular business in 2025, its latest annual accounts show.
L&G Modular reported a pre-tax loss of £61.1m for the year to 31 December 2023, which it blamed on “balance sheet impairments [from 2022] following the decision to close the factory and reduce business operations”. That is in comparison to the £120.8m loss from the year prior. Turnover was also down, from £40.0m to £12.4m.
L&G is set to close its modular business by 2025 and has started to wind down its operations.
In the accounts, the firm, which announced its modular factories would shut after long planning delays and Covid meant they failed to become profitable, confirmed closure was now planned on a “phased basis” and “expected to be completed in 2025” .
It has completed jobs on two of its three remaining sites and reduced its average monthly number of employees from 549 to 312 in 2023, its accounts revealed. They are the first accounts published since L&G announced its intention to close L&G Modular Homes.
L&G Modular is one of a number of modular firms that have struggled to make a profit. Companies including Ilke Homes, Modulous and Caledonian Modular have already gone out of business.
Despite L&G Modular winding down its business, it still required an investment of £39.5m from L&G to “allow it to execute its strategy” over the course of the year.
During 2023, it completed work at two sites in Broadstairs, Kent, and Selby in Yorkshire, handing over 138 homes. L&G added it was continuing to deliver “high-quality modular housing” at its final live site in Bristol.
It added: “Following the decision made in 2023 to cease production and reduce business operations, the principal activity of the company is to close the factory, complete existing housing developments and wind down the business once all these activities are complete.”
The firm also made provisions to cover “factory dilapidation” totalling £4.2m, plus £2m for “project losses”. It also expects to spend around £370,000 closing its factories.
Despite the struggles incurred at a number of modular firms, Integra Buildings, a modular specialist based in Paull, East Yorkshire, revealed a turnover that topped £50m for the first time.
Turnover came in at £50.4m, in comparison to £24.7m, while cash rose to £12.6m from £4.4m. Integra also more than tripled its pre-tax profit to £6.6m in the year to 31 December 2023, though its prior £2m profit was for a six-month period, rather than a year.
Integra estimated that its turnover was up around 18 per cent on the full prior year, and reported an “equally encouraging” outlook for 2024. Looking ahead, it projected a similar turnover and level of gross profit “despite the challenging economic and market conditions” affecting the construction industry.
