Losses have been scaled back at Legal & General’s modular business as the firm continues to wind down.
According to newly released financial information, it recorded a loss before taxation last year of £9.4m as operating costs diminished in the wake of the decision two years ago to cease production.
In the previous year, losses topped £44m, following a record loss of over £120m in 2022.
The firm’s annual report and financial statements for the year ended 31 December 2024 also showed that turnover fell from £12.4m to £5.3m while net liabilities stayed steady at just over £6m.
L&G opted to exit the modular market and reduce operations on a phased basis after its factory in Selby, Yorkshire, failed to become profitable after struggling during Covid and suffering long planning delays.
At that point, it had posted losses for six consecutive years.
The firm said a “strong and predictable site pipeline” was needed to keep the business afloat, but delays had made it impossible to build a business that could sustain the costs of the factory.
In a report accompanying the financial statements, the directors said two of its three planned developments had now been completed while its Bristol site was due to be delivered next year.
“During the year the company continued to progress in the wind down of business operations, with activities continuing to deliver high quality modular housing at its final live site in Bristol, and sales completion of final properties from previously completed sites,” it said.
Over that time, more than 20 new homes had been delivered, generating revenue of £5.3m.
“Losses have reduced in the period to £9.4m ─ this is due to reducing operational costs as the business continues to wind down following the decision to close the factory and reduce business operations,” it said.
The winding down of the factory is expected to take until 2026, while the obligations of the business as a whole are likely to continue until 2028.
“Accordingly, the directors have not prepared the financial statements on a going concern,” it said.
The firm, which has no bank loans, recorded cash in bank at £5.2m up from £3.8m.
Its number of employees reduced from 312 to 53, this saw its wages bill drop from £20.5m to £5.5m.
Last month, Midlands housing association GreenSquareAccord became the latest to leave the modular building market as it put its offsite housing subsidiary up for sale.
Signalling its intention to offload its LoCaL Homes brand to focus on its core social landlord services, it said the landscape had “changed significantly”.