For the year to 30th September 2016, Lakehouse generated revenue of £333.8m (2015: £340.2m), from which it made an operating loss of £31.7m (2015: profit £4.6m).
Executive chairman Bob Holt, who took over in July 2016 in the wake of a boardroom revolt, acknowledged that the trading performance for the year was disappointing but action is being taken.
“FY16 has been a challenging year for Lakehouse but one we believe will prove to be transformational, having focused on reviewing the strategy of the group, stabilising operational performance with a view to improvement and controlling costs at every level, whilst retaining a high quality of client service,” he said.
“We have taken tough decisions to exit some business streams within Property Services alongside bringing in a new management team to stabilise operations in the remainder of the division and reset the dial. The core businesses of Compliance, Energy Services and Construction are well established, excellent businesses who have a clear vision of what needs to be delivered.
“Looking forward, our strategy will be evolutionary but we are confident that, with our newly stabilised group, the long term fundamentals of the commercial markets in which we operate will provide us opportunities to deliver consistent performance, grow sustainably and to return value to shareholders.
“The new year has started satisfactorily and current trading is in line with management expectations."
As part of the operational review, the board decided that it was not sustainable to continue with the provision of directly delivered externals work within the Property Services division and this business is being closed, with £6.6m of pre-tax contract losses being taken.
“My initial focus has been on reviewing the strategy of the group and stabilising operational performance with a view to improvement and controlling costs at every level,” Bob Holt said. “We are focusing the businesses on markets where we can operate effectively and creating an environment where entrepreneurship is allowed to prosper.”
He added: “Our decision to withdraw from self-delivered externals work within Property Services was clear, as we had fallen short operationally at a number of levels. Following this restructuring, I felt that renaming what was known as the "Regeneration" Division as "Property Services" better reflected the services we will be offering moving forward. We have brought in new management who understand the core risks in this market, from pricing, through operational management to controls and processes and they are doing an excellent job in returning Property Services to an acceptable level of performance. This will, however, take time and we took a very cautious approach to bidding for new work in the second half of the year in this Division as we sought to stabilise operations. We are therefore setting modest expectations in the near term.”
Lakehouse’s Construction division accounts for 17% of group revenue and focuses on public sector building and refurbishment work, particularly schools. In FY 2016 it made underlying EBITA of £3.6m (2015: £4.8m) on revenue of £52.1m (£73.4m).
Bob Holt, who had previously built up Mears into a major support services business, joined Lakehouse after founder and shareholder Steve Rawlings succeeded in ousting the previous executive team. However, soon after taking back control of his company, Mr Rawlings died.
Bob Holt bought Mears in 1996 for £50,000 and then floated it on the stock exchange. He remains chairman of Mears, as well as social housing contractor Forrest.
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