Insurance giant L&G’s housebuilding business sees completions fall in ‘challenging market’

L&G-owned housebuilder Cala Homes saw profit drop by more than a quarter in the first half of the calendar year, as the tougher market conditions ate into sales at the firm.

Insurance giant L&G, reporting interim results to June 30 this morning, revealed that its Cala Homes subsidiary had seen completions drop by 6.5% in the period to 1,428 units, from 1,527 in 2022.

Cala - St Peter_s Quarter_ Chertsey_ Cala Homes Thames

Cala Homes’ St Peter’s Quarter scheme in Chertsey

Pre-tax profit fell to £73m, from £98m the prior year, on revenue of £619m, down from £688m in 2022. L&G said the business had “continued to perform well […] in the face of a challenging market”.

Cala has got reservations for 75% of the sales it needs for the year, it said, “providing confidence in the delivery of Cala’s FY 2023 targets”. Last year Cala reported pre-tax profit of £169m on turnover £1.33bn for the full calendar year.

Across all its housing businesses, L&G said it was continuing to “scale up its delivery across all housing tenures”, despite its decision in May to cease production at its modular housing factory outside Leeds. L&G said the value of its housing portfolio had grown in the half year to £2.25bn, from £2.19bn.

L&G said its affordable housing business, LGAH had secured an “operational pipeline” of 6,766 homes with a gross asset value of £1.2bn. It added that its later living business, Inspired Villages, was on course to build 5,000 in partnership with the NatWest Group Pension Fund.

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