Legal & General (L&G) is closing its 550,000 sq ft modular manufacturing facility in Selby, North Yorkshire, with more than 450 jobs potentially at risk.
According to Sky News, which broke the news, the pandemic and planning delays had been “major factors” in the inability of Legal & General Modular Homes to deliver sufficient orders to become profitable.
L&G launched its modular homes division in 2016 and in its first set of full-year accounts it made a loss of £7,487,312. The following year (2017) it made a loss of £39,949,175. In 2018, it recorded a loss of £16,753,023, for the year ended 31 December 2019 it made a loss of £24,419,859 and in 2020 it made a loss of £25,387,990.
In its latest accounts for the financial year ended 31 December 2021 it made a loss of £29,000,475. In the same year it generated revenue for the first time of £12,192,478.
In its accounts for 2021 the company said it had achieved a “significant milestone . . . recognising revenue for the first time in respect of development sites in Broadstairs, Kent, Selby, North Yorkshire and North Horsham, West Sussex”.
The accounts also stated that the company had “continued to make significant progress adding further projects to an already strong sales pipeline, making further enhancements to our production lines, development partnerships with key suppliers and driving further product development of our EPC-A rated dwellings”.
It added “interest from existing and potential customers remains strong and the directors believe that the company is well placed to adapt to any changes in market conditions”.
In a statement the company confirmed it was “reviewing and assessing potential future strategic options for the business”. It said that as a start-up business with a “significant fixed cost base, a strong and predictable site pipeline is required to make L&G Modular Homes a successful sustainable business”.
Bill Hughes, chair of Legal & General Modular Homes’ board, said: “Legal & General is proud of what we have achieved in bringing forward a new approach to construction through our factory. However, without the necessary scale of pipeline it is not sustainable to continue producing more modules. We are therefore reluctantly proposing to reduce business activity and cease production of new modules at the factory.
“Regrettably, this includes commencing consultation with all employees around the proposal to make the majority of Modular Homes roles redundant. We recognise this will be a challenging and uncertain period for our staff and we will be actively exploring redeployment opportunities and supporting them during this difficult time.
“Legal & General remains deeply committed to the UK housing sector, where we have delivered 15,000 homes over the last three years, and to our valued industry partners and customers. As such, we are continuing to actively explore all options available to us and will retain a select workforce to ensure high quality delivery and aftercare services for our existing customers, whilst engaging with each of our partners regarding ongoing modular projects.”
