Developer says underlying business is strong despite £28m pre-tax loss
Revenue and profit were down at London Square last year as the developer battled tough economic conditions.
In the year ended 31 March 2023, the group reported revenue of £252m, down from £278m, and suffered a pre-tax loss of £28m - a significant fall from the £22m profit recorded the previous year.
Chief executive Adam Lawrence, a former Barratt director who co-founded the London-focused firm with Mark Pain in 2010, said inflation and interest rate volatility had impacted the business during the financial year.
He added: “Uncertainties around the introduction of building rRegulations and removal of planning requirements from the government contributed additional costs but also has caused significant delays in planning approvals and the ability for our operations to start on new sites”.
These three factors, he explained, had forced the group to “reassess its priorities, cost base and sources of capital”, which included a redundancy round in December 2022 of 10% of the workforce.
Despite this, the average number of people employed monthly across the financial year was up to 194 from 163.
Lawrence said adjustments made by the firms had caused a “distorting impact upon the reported results” and claimed that, after adding back costs relating to one-off items such as land write downs, redundancy costs and aborted re-financing costs, the group had an underlying profit at £16m.
Revenue was comprised of a greater proportion of private residential (58%) in the most recent results, although the trend is expected to show a growing proportion of affordable residential, which stood at 21% in the year to 31 March 2023. Build to Rent declined as a proportion of sales from 29% to 17%.
The business, which was bought last month by Abu Dhabi’s largest real estate group, built a total of 452 units last year, down from the 502 the year prior.
London Square was Aldar Properties’ first acquisition outside the Middle East and North Africa region, with the deal worth £230m.