Losses increase at London Square amid ‘unprecedented strain’ caused by building safety delays

London Square has reported an increase in its annual pre-tax loss.

The housebuilder, in its audited accounts, reported a pre-tax loss of £12.7m, up from £10.2m the previous year.

This is despite the firm, which was acquired by Abu Dhabi property investor Aldar in 2023, posting a 60% increase in turnover from £213m to £343.6m. It said this was driven largely by the completion of schemes at Nine Elms and Croydon offset by a drop in affordable and build-to-rent units recognised in the year.

The group completed 484 homes in the year, down 20% on the 608 reported for the previous year, while its development spend fell from £543m to £366m, which it said was almost wholly attributable to building safety approval delays.

London Square said approvals of high-rise developments by the Building Safety Regulator took nine to 12 months longer than anticipated which it said “have placed unprecedented strain” on the housing sector.

It said: “With our own ability to start new projects significantly curtailed, this resulted in a corresponding impact on delivery and revenue.”

It said it had expected more revenue to be recognised from the construction of pre-sold affordable and build-to-rent units but the building safety delays “restricted this activity, which is reflected in this year’s financial performance.”

London Square the year’s accounts include upfront costs as it scales its business post-acquisition, but the resulting profits are not expected to be recognised until later years.

It said its gross profit was £46.6m, up from £34.2m but its net loss doubled to £20.5m.

It said: “While this was in line with our business plan and an improvement on the previous financial period, these are not reflective of the underlying profitability of operations which the directors look forward to reporting in future years as growth normalises.”