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Lakehouse sells construction arm to 'team of specialists'

Lakehouse has reached an agreement to sell off its construction and property services arms.

Both businesses are to be taken over by a “team of specialists” who have experience in the construction industry, Lakehouse said.

A heads of terms agreement outlining the principles of the sale has been signed and the deal is expected to be completed “in the near future”, according to a spokeswoman for the company.

The disposal of the firm’s construction and property services divisions, which it acquired when it took over Fosters in 2013, means the company will be left with a compliance and an energy services business.

Chairman Bob Holt described the remaining businesses as “broadly non-cyclical apart from seasonal demands, but most importantly, predictable, profitable and cash-generative”.

The sale was announced as Lakehouse unveiled its interim results for the six months to 31 March 2018 ths morning.

Its construction and property services businesses made an £11.8m pre-tax loss on revenue of £41.3m, with the loss largely attributed to the company revaluing its assets ahead of the sale.

Lakehouse’s continuing compliance and energy businesses reported a £501,000 pre-tax loss on revenue of £91m.

Lakehouse has endured a tough two-and-a-half years since its share price plummeted from 87p to 40p in February 2016 – a year after it floated as a listed company – following the poor performance of its property services division.

This was followed by a pre-tax loss of £33m for the year to 30 September 2016.

A subsequent restructuring of the business saw it attempt to maintain its construction business while downsizing the services arm.

Last July the firm’s shares were hit again on news that the Metropolitan Police were investigating allegations of fraud related to its fitting of fire alarms for Hackney council.

In March this year Lakehouse also lost a ruling over fire damage at a school it was working on in south-east London and ordered to pay £8.75m in damages.

Chief executive Michael McMahon told Construction News earlier this year that working in the public sector had become tougher as clients squeezed contractors and suppliers demanded better terms.

Lakehouse’s construction work was focused in the education sector, but in late 2017 it won its first NHS contract, valued at £2m.

Lakehouse’s share price was down 2.1 per cent by mid-morning.

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