Laing O’Rourke mothballs house building arm

Aaron Morby 13 years ago

Laing O’Rourke is running down its housing arm Explore Living for at least two years until the housing market improves.

The house building business will continue to build out all existing projects and then mothball its land bank of 1,000 plots until there is a sustained recovery in the house building market.

Most of the existing staff will continue to work with Explore with only a handful of redundancies expected initially.

But chairman Paul Healey and managing director Karl Pickering are to leave Explore.

A spokesman for Laing O’Rourke said: “All future phases on these sites, plus development sites owned by Explore Living where construction work has not started, will be paused.

“Work will not recommence until consumer confidence returns to the UK housing market, and greater certainty exists regarding the sales prospects for these developments.

“We expect this period of inactivity to extend for a minimum of two years as the government’s austerity measures and the scarcity of mortgage lending continue to suppress housing demand.”

Since Explore Living plc was set-up in 2005 it has failed to return a pre-tax profit. In 2010, pre-tax losses reached £8.2m on a turnover of £33m, and in 2011 was still in the red to the tune of £4.4m on turnover down at £19m.

The spokesman said: “Longer term, the group remains confident around the strength of the current development portfolio, with sites located in desirable areas across the south east, which we consider to have potential to grow in value as the housing market recovers.

“As projects complete on their current phases of work, Explore Living employees will be transferred onto other projects elsewhere within the group where it is feasible for them to do so.

“However, an unfortunate consequence will be that a small number of redundancies will result from this decision, although we will seek to minimise the impact on affected individuals to the greatest extent possible.”

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