Urban Splash has reported a loss following its modular spin-off went into administration last year.
The company posted a pre-tax loss of £2.9m in its most recent accounts, from 1 October 2021 to 31 December 2022, compared with a profit of £6m pounds during the year until the end of September 2021.
Turnover fell by 40% during the same period. Urban Splash reported global turnover of £40.1m between 1 October 2021 and 31 December 2022, compared to £66.5m in its previous accounts. The construction turnover figures were £24m and £38.1m respectively.
The firm said the collapse of the modular business had “adversely impacted the group’s results”.
The administration led to a loss of negotiation with the spin-off business and a consequent re-evaluation of Urban Splash’s construction approach.
The firm’s strategic report said its directors decided to “reduce in-house construction activity and move towards contracting third-party main contractors as the preferred route for construction projects”.
This change, which applies to both Urban Splash-owned developments and joint ventures, resulted in a “significant reduction” in construction turnover.
The company made a number of redundancies as a result of the administration, with headcount down to 89 from 128 in 2021.
Urban Splash said despite the administration it was able to refinance £38.3m of debt in three separate facilities with a single new lender, Aviva. The new £40.3 million facility covers an eight-year period.
The company also secured a £10m loan over four years with Grosvenor Developments in February, to support early-stage projects and land acquisition.
Due to the change in strategic direction, Urban Splash extended its accounting close until December to “better align” it with the new economic cycle.
The latest loss figure was hit by a £1.6m revaluation of the company’s commercial properties down and a £2m drop in profits from joint ventures.
Urban Splash said the year had been “a period of consolidation”, but added that it was “well positioned to weather the uncertain outlook currently being experienced in the wider economy”.
