Sheen Lane Developments, a London-based residential developer, recently faced significant financial challenges, leading to a pre-pack administration.
The company called in administrators from Quantuma on April 1, following issues that began the previous year. This move was crucial for the firm’s survival, as it had been struggling with substantial financial losses. In its most recent annual accounts, Sheen Lane reported a pre-tax loss of £27 million from a turnover of £50.5 million, with net liabilities of £8.5 million. These figures were notably worse than the previous year, where the loss was £5.8 million from a revenue of £72.2 million. The directors attributed these losses to “exceptional circumstances” such as high interest rates and market uncertainty, yet they anticipated a return to profitability in the next financial year.
Despite these challenges, Sheen Lane was acquired from administration by Radio City Developments Ltd., a company whose majority shareholder, Martin Tynan, also owns Sheen Lane. While this acquisition ensures the transfer of all 22 employees to the new entity, it raises concerns about the company’s future stability. The deal’s value remains undisclosed, adding to the uncertainty. Furthermore, the firm’s auditors, Butters Gates & Company, highlighted a “material uncertainty” regarding Sheen Lane’s ability to continue as a going concern.
To fund its growth, Sheen Lane secured a £36.8 million development loan from Octopus Real Estate to convert a vacant office block in Addlestone, Surrey, into 174 new homes. This project aims to tackle the UK’s housing shortage and includes sustainable features like solar panels and EV chargers.
We covered the Richmond development here.
© London West (powered by ukpropertyforums.com).
Sign up to receive our weekly free journal, The Forum here.
