Modular housebuilder Ilke Homes is up for sale, pausing production at their Knaresborough factory with an estimated 4,200 affordable homes yet to be delivered
Ilke Homes is up for sale, seeking a buyer for the £28m firm after filing its accounts over two months late on the advice of auditors.
Ilke Homes commented that without investment, their £1bn order book of majority affordable homes could not be delivered. This amounts to roughly 4,200 units.
The North Yorkshire-based firm, which has a workforce of around 1,000, halted work at the 250,000 sq ft Knaresborough factory site whilst it awaits a buyer.
Rising costs and planning policy complications have been blamed
Ilke Homes said its “turnkey” development offering, where the company acquires land, secures planning permission and develops the site before selling the unit to a client, has been “complicated by uncertainty over planning policy and rising build costs”.
It added: “While having delivered strong contribution margins, Ilke Homes now requires new investment to meet overheads, achieve further scale and become cash flow positive.”
Chief financial officer at Ilke Patrick Bergin commented that the firm has been hoping to close an additional funding deal- on top of £100m in funds raised last year- but the proposed partner pulled out.
Auditors advised that Ilke delay filing accounts in hopes of more funding, but were ultimately unsuccessful.
Ilke Homes is also considering alternative funding options
The firm, owned by private equity firm TDR Capital, is also considering the alternative of selling a non-controlling stake in the business as well.
This option would see the stakes of existing shareholders such as Sun Capital, Guinness and Places for People, and Fortress Investment Group reduced.
Last year’s £100m investment was hoped to fund a new manufacturing facility and increase the company’s output to 4,000 homes a year, with 1,000 new jobs created.
Outstanding developments from Ilke Homes include projects in Southend, Milton Keynes and Kent.
This is sad news but not surprising. Having worked closely with them, the leadership team were continually sweeping problems under the rug or throwing money at them rather than fixing the root cause.
Using the production line model as they do, if you ignore a problem at the start, it will snowball until the end. The manufacturing Executive had zero interest in listening or fixing this, just getting it off the line and out of his hands regardless of the issues.
An upsetting time for all the colleagues involved but undoubtedly a result of the weak exec team.