Housebuilder and brownfield developer Inland Homes is to appoint administrators as continued uncertainty related to regulatory failures means it cannot publish audited accounts for the past two financial years.
Inland filed a notice of intention to appoint administrators yesterday (September 27), with directors selecting David Hudson and Phil Armstrong of FRP Advisory to oversee the process.
FRP has been working with the Buckinghamshire-based company to investigate regulatory breaches that arose earlier this year.
From the inside chairman and two non-executive directors resigned in March as the firm admitted it may have breached rules for listed companies, saying it had become aware of “certain related-party issues […] of which the board was not informed at the relevant times”.
Companies listed on AIM, a stock market for small and medium-sized companies overseen by the London Stock Exchange, must immediately disclose the terms of a transaction with “related parties” such as shareholders, directors or family members.
In April, trading in Inland’s shares was suspended after it missed the deadline to publish its audited accounts for the financial year ending September 30, 2022.
Inland initially appointed FRP (overseen by auditor PwC) to investigate related-party issues and “any other relevant matters”. In July, Inland said FRP had found “significant and repeated failings in corporate governance at board level” as well as “failures in internal control” in some areas of the business.
The company then asked FRP to conduct a further review to assess whether “the control violations or incomplete disclosures affected other areas of corporate governance and financial reporting.”
This most recent investigation concluded that “further work is still required on material judgments and estimates” before Inland can release audited financial statements for the period from October 1, 2020 to September 30, 2022.
Inland announced yesterday that “at this stage the scope of the additional work and cost required to complete the preparation of the financial statements and the audit for the financial year 22 cannot be assured, and the time frame in which this it might be doable.”
After reviewing its options, the firm concluded that administration would be “in the best interests of all stakeholders.”
AIM rules provide that trading in the company’s shares will cease on October 4 following the six-month suspension.
The firm announced on September 11 that it had also defaulted on a loan agreement with HSBC from which it had drawn around £11m. It claimed that “active discussions” were taking place with HSBC about resignations over the breaches. Inland added that it was “likely to breach covenants with other lenders” and that it had begun discussions with them.
Inland’s announcement ends an attempted rescue strategy that would have involved the £4m takeover of Wakefield-based NorthCountry Homes.
Jolyon Harrison, NorthCountry’s executive chairman and former Gleeson chief executive, was appointed Inland’s new chief executive in July and terms for the takeover were agreed. But the move was dependent on conditions, such as the restoration of Inland’s stock trading, which has not been possible.
In January, Inland said it expected losses of around £91m in its next accounts, worse than it had previously forecast.
FRP declined to comment.
