Housing contractor and housebuilder switches focus to recently launched regeneration business 

Exceptional items saw the Durkan Group fall to a pre-tax loss despite an increase in turnover.

Durkan Holdings Ltd’s accounts for the year ended 30 November 2024 revealed income had risen 12% to £192m which the firm said was down to the performance of the two businesses.

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Durkan said it wants to grow its regen business, as it cuts the size of its contracting business

Housing revenue was up 21% to £72m and income at the regen arm was up 30% to £22m, while the contacting business reported stable turnover of £102m,

In a note accompanying the accounts, chairman Daniel Durkan celebrated the group’s return to operating profit (£0.7m) after ”two years of operating losses caused by challenging trading conditions in the housebuilding and construction markets, and unprecedented adverse macroeconomic headwinds”.

However, it recorded a pre-tax loss of £7.5m, worse than the £3.9m in the previous year, largely as a result of a £9.3m net exceptional expenditure.

This included a £15m bill for fire safety remediation costs and £0.7m in redundancy costs as a result of a move to reduce the size of the contracting division.

In a note accompanying its accounts, Durkan said it was “assess[ing] the commercial risks of its design and build contracting business” because of “delays in obtaining regulatory sign-offs under the Building Safety Act, and a consequential slowdown in customer demand as Housing Associations and Local Authorities”.

It added: “Accordingly, the company is focussing on developing the regeneration business going forward, and whilst every effort is made to redeploy staff across the Durkan Group, there have been redundancies in contracting as projects complete and the division reduces in size.”

Durkan Contracting carries two live projects into 2025, including the £145m Kidbrooke Park Phase 2 project which will deliver 330 affordable homes for the Royal Borough of Greenwich. This project is forecast to complete in 2026. 

The business clawed back exceptional income of £6.3m through the professional indemnity insurance policy maintained by the group for schemes where fire safety remediation costs were incurred because of third party design.

Durkan, which operates across London and the Home Counties, has previously said the regeneration division will provide a one stop shop for a host of services including asset regeneration, planned maintenance, compliance services, including damp and mould, and fire remediation.

The business is being headed by managing director Dan Germann whose CV includes spells at Keepmoat Regeneration, Apollo Group and Equans UK.

The Durkan Homes business sold 145 new homes across four developments in the period, but forecast a downturn in turnover in 2025, owing to ”delays in bringing new sites forward into production due to well publicised industry challenges in planning and capital availability from registered providers”.

It added: ”The impact of the new Labour government in the UK and its commitment to reform the planning system and deliver more homes is yet to be fully understood and wider macroeconomic/geopolitical uncertainty remains.”

The business will launch three new developments in 2025. Net cash at the year-end was up from £31m to £35m.