Legal & General is strategically winding down its modular business amidst financial challenges.
- The company reported a reduced pre-tax loss of £61.1m for 2023, contrasting the previous year’s £120.8m loss.
- Turnover sharply declined from £40.0m to £12.4m, attributed to ongoing operational wind-downs.
- Despite cessation plans, a £39.5m investment was necessary to execute their remaining business strategy.
- Integra Buildings, unlike L&G Modular, achieved significant financial growth amid sector-wide challenges.
Legal & General is methodically phasing out its modular business operations, as evidenced by its latest financial accounts which showcase a pre-tax loss of £61.1m for the year ending 31 December 2023. This loss marks an improvement from the previous year’s £120.8m deficit, predominantly due to balance sheet impairments identified in 2022 following the strategic decision to close its factory operations.
Turnover has seen a substantial reduction from £40.0m to £12.4m, a clear indicator of the ongoing downsizing of business activities. The impending closure of L&G Modular has been attributed to long-standing planning delays and the financial impact of the Covid pandemic, which hindered its ability to become profitable.
The closure process is being implemented on a phased basis, with the aim of finalising operations by 2025. This transition has already seen the completion of projects at two out of three remaining sites, and a significant reduction in workforce from 549 to 312 employees in 2023.
Even as L&G Modular winds down, it still required an injection of £39.5m from Legal & General to support the execution of its remaining strategies. This investment underscores the complex nature of winding down operations whilst maintaining commitments to existing housing developments and ensuring the continued delivery of high-quality modular housing at its Bristol site.
In stark contrast, another modular construction firm, Integra Buildings, achieved a record turnover of £50.4m, more than doubling the previous year’s figure despite adverse market conditions. They reported a pre-tax profit tripling to £6.6m, signalling robust growth and a positive outlook despite sector challenges.
Legal & General continues to navigate the strategic closure of its modular business, balancing financial losses with necessary investments.
