Social housing contractor continues to turn around its loss-making property services division

Lakehouse posted a pre-tax loss of £3.6m for the six months to the end of March 2017, as the Essex-based social housing contractor attempted to reverse a decline in trading in its property services operation.

Group turnover fell 11% to £149.8m, with underlying group earnings before interest, depreciation and amortisation (Ebita) were down 49% at £2.6m. Overall first half losses before tax doubled from last year’s £1.8m.

Chairman Bob Holt, who came into the business in the summer of 2016 after a boardroom coup, said the core businesses of compliance, energy services and construction had all performed well, posting underlying double digit Ebita growth, up 13%, while the property services business made a loss as the group “continues to reshape the business into profitable workstreams”.

The division, which accounts for a fifth of its revenue, saw turnover fall 51% to £30.7m, with an underlying Ebita loss of £1.1m, compared with a £1.9m profit a year ago.

Holt said the losses reflected the closing out of “legacy contractual matters, as opposed to any significant underlying operational challenges”.

The division was expected to post a second half loss as the group undertook to reverse its fortunes, he added.

Holt said he was encouraged by new business wins during the period of £267m, bringing the total order book to £580m, up 7% since year end, and looking ahead expected trading for the full year will remain in line with management expectations, while finishing off the turnaround in the property services operation in the second half.

Last year Lakehouse posted a full-year pre-tax loss of £33.3m as it debuted on the stock market. It moved to Aim earlier this year, arguing it would reap “significant benefits” from the move.