Owner L&G reportedly looking for buyer for housebuilder

Turnover and profit dropped at Cala Homes in 2023, the firm’s financial report has revealed amid rumours it is set to be sold by owner L&G. 

The housebuilder’s results for the year to 31 December showed a 33.6% drop in pre-tax profit, from £169m to £112m. 

Cala Homes - Fernleigh Park, Long Marston, Cotswolds

Source: Cala Homes

Cala Homes’ Fernleigh Park scheme in the Cotswolds

Meanwhile, turnover stood at £1.26bn, down 7.3% on the prior year. 

The business completed 2,917 homes in the year, a 3.6% decline on the 3,027 posted in 2022. 

Insurance giant L&G is reportedly exploring a sale of its subsidiary and has been shopping the business to volume housebuilders ahead of a formal sale process. 

According to a Sky News report, the business is lining up Rothschild to run the auction of Cala, which it said could be worth up to £750m. 

L&G last year ceased production at its modular housing factory outside Leeds after racking up £174m of losses. 

A spokesperson from Legal & General said: “Legal & General regularly review and conduct conversations about the future of all our various investments and subsidiary businesses as we seek to maximise value for our shareholders.” 

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Cala Homes chief executive Kevin Whitaker said the sales rate of 0.63, which was in line with the 0.62 recorded the year before, was a sign of strength. 

“This consistent delivery has given us confidence to execute our strategy to invest in land for future years,” he said.  

“In 2023, Cala contracted 24 new sites, capable of delivering over 4,300 new homes. These sites have a gross development value (GDV) of £2.1 billion with the average selling price of around £500,000.” 

Whitaker said the business was actively seeking further opportunities to invest. 

As of 10 March 2024, the group’s sales rate had ticked up to 0.71 sales per site per week and Whitaker reported “encouraging levels of enquiries”. 

“Whilst still early to predict, this positive start to the year alongside improving economic fundamentals are reasons for optimism that the market could return to more normal conditions during 2024,” he said.