CBRE-owned London housebuilder racks up second consecutive loss
London-focused build to rent housebuilder Telford Homes has fallen to a 拢193m pre-tax loss compounded by building safety writedowns and losses on its conversion of the grade-II* listed Balfron Tower in east London.
The CBRE-owned housebuilder said turnover in the 2022 calendar year increased by 5% to 拢296m, but that it nevertheless fell to an 拢18.4m pre-tax loss, even prior to the impact of exceptional items. This compared to a 拢7.8m pre-exceptional profit in 2021.
However, the firm, which was bought by US-based real estate giant CBRE in 2019, said it was also hit by further exceptional losses which took the total pre-tax loss to 拢193m. This compares to a pre-tax loss of 拢14.2m in 2021.
Telford did not detail the full reasons for the writedown, or for the pre-exceptional loss, however, it said it had been hit by 鈥渂uilding safety provisions, onerous build to rent contracts and the refurbishment of a listed residential tower鈥�, understood to be the delayed refurbishment of the Erno Goldfinger social housing block in Poplar.
The Balfron tower features 146 apartments and a further six 鈥榟eritage鈥� flats updated by Ab Rogers Design Studio and Studio Egret West.
The pre-tax loss is Telford鈥檚 third in the last four years, with the firm having only reported one pre-tax profit, of 拢1.7m in 2020, since having been taken over by CBRE. In that time, it has now racked up over 拢205m of losses.
The firm said that total 鈥渂uilding safety costs鈥� incurred by the firm in the year were 拢143m, with 拢99.9m incurred as an exceptional 鈥渂uilding safety provision鈥� as a result of signing the government鈥檚 building safety contract in March this year. Telford also reported a 拢21.5m 鈥渋mpairment鈥� charge on its work in progress.
Telford is understood to have been hit by a subcontractor failure on its flagship Balfron Tower scheme.
The housebuilder recorded 拢169m of equity on the balance sheet but its 鈥済oing concern鈥� statement in the accounts said Telford was 鈥渄ependent on CBRE Group providing additional financial support鈥�. Staff numbers reduced in the year by 15% to 285, the accounts showed.
A spokesperson for Telford declined to answer further specific questions on the cause of the 2022 loss but said in a statement: 鈥淭elford Homes鈥� financial performance in 2022 was impacted by the macro-economic environment, particularly elevated inflation, and reserves taken on future remediation work associated with the government鈥檚 黑洞社区 Safety Pledge.
鈥淲e continue to see long-term secular trends that benefit the build-to-rent market in the UK and are also exploring other attractive residential sector growth opportunities.鈥�
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