Employees to get little from Ilke Homes settlement, document reveals

A new document published by the administrators of failed housebuilder Ilke Homes has revealed that its debts are far greater than previously believed, and that employees stand to gain little from any settlement. 

Ilke Homes collapsed into administration in June, causing the loss of 1,100 jobs and leaving a long list of creditors wondering when they might get any money back – and how much they might receive. 

A Statement of Affairs published on the government’s Companies House website two weeks ago appeared to show that the company left debts of about £320 million, but it transpires that that figure applied only to Ilke Homes Limited (IHL), which is one of three companies currently in administration by AlixPartners. 

The other two, Ilke Homes Land Limited (IHLL) and Ilke Homes Holdings Limited (IHHL), were part of the same operation and have also left debts, of £52.8 million and £23.9 million respectively. 

The total combined sum of the three companies’ debts amounts to £397.95 million. 

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The document also details how much various creditors are likely to receive. For example, IHL owes 1,061 employees a total of £724,614 in the form of holiday pay and pension arrears – an average debt of £683 per person – but the statement lists this debt as being payable at “nil” pence in the pound, meaning they will get nothing. 

By contrast, secured creditors will receive the full amount owed to them. For example, IHL is expected to repay the whole of its £221,000 debt to Barclays Bank, but none of its £2.2 million debt to HMRC. In all, it is expected to repay £326,000, or just 0.1%, of its £321 million total debt. 

IHLL is expected to repay its debts to secured creditors Redlawn Land Ltd (£7.7 million) and Barclays Bank (£5.4 million) in full. Claims from HMRC of £279,743 and from former employees of £43,258 are also expected to be paid in full, but other unsecured creditors are expected to receive just £694,000 of the £39.4 million they are owed. 

In the case of IHHL, the amounts of repayments to unsecured creditors, who are collectively owed nearly £23.9 million, are listed as “uncertain”. 

The three Ilke companies collectively owe Homes England £68.7 million, a sum which appears on all three of their balance sheets due to a system of cross-guarantees. Of this debt, IHL will repay £105,000, IHLL will repay £1.005 million, and IHLL will repay just £30,000. In total, Ilke will repay just £1.14 million of its £68.7 million debt to the government agency. 

In all, the three Ilke Homes companies are expected to pay off £15,478,001 of their debts – or just 2.9% of the total. 

This story was updated on September 20. A previous version wrongly stated that Ilke’s total debts exceeded half a billion pounds. This was because the £68.7 million that Ilke owes to Homes England appears as a liability on the balance sheets of all three Ilke companies, as they have all guaranteed it, and so was counted three times instead of just once.

Staff at troubled Ilke Homes told they will be paid this month

Staff at Ilke Homes have been told they will be paid in full this month as the company continues to find a buyer.

The modular housing manufacturer based at Flaxby, alongside the A1(M), filed a notice of intention to appoint administrators last week.

The company said the move was due to financial difficulties caused by “volatile macro-economic conditions and issues with the planning system”.

Staff were told to stay at home on June 9 while the company tried to resolve the situation.

The lack of apparent progress in the 18 days since has heightened concerns but in an email, seen by the Stray Ferret, staff have now been told they will be “paid as normal” this week and that payslips will be available on Wednesday.

The email, sent by chief executive Giles Carter, added the company continued to “pursue all angles to secure a long-term future for the business”.

Last week, the Stray Ferret reported that the company had been offered to potential buyers for bids over £1, and some major housebuilders have been approached.

At the time, any bids for the business were to be submitted before the end of the week, when the firm’s existing backers would decide the firm’s future.

The Stray Ferret asked Ilke Homes today whether any bids for the company had been lodged since it filed a notice of intention to appoint administrators.

A spokesperson said:

“Talks with potential investors remain ongoing.”

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lke Homes said previously it needed additional funding to fulfil a £1 billion order book and to protect jobs, adding that new investment was needed to build its pipeline of 4,200 new homes.

The company specialises in modular housing built in its Flaxby factory and then put together on site in a process that saves time and costs, reduces carbon emissions, and is not weather-dependent.

Earlier this month, the company told most of the nearly 1,000 employees at its 250,000 sq ft factory not to come into work until further notice.

Ilke Homes was established in 2017 and opened its Flaxby factory the following year. Since then, it has built up a client base that includes major institutional investors, housing associations, developers and local councils.

Negotiations continue to find buyer for Knaresborough housebuilder

Most of Ilke Homes‘ Knaresborough staff are expected to remain at home on full pay next week as the company continues to seek a buyer.

The Stray Ferret understands a small number of staff will be in the Flaxby factory to help complete some orders and send them to site.

They will be joined by managers, who have remained at the factory this week after the workers were told a week ago to stay at home while the company sought investment.

The business was put up for sale this week and a source told the Stray Ferret its owners were now in “advanced talks” with a potential buyer.

In a statement issued earlier this week, the company blamed market conditions for its current situation:

“In 2020, Ilke Homes launched its turnkey development offering, where the company acquires land, secures planning permission and develops the site. This has been complicated by uncertainty over planning policy and rising build costs.

“While having delivered strong contribution margins, Ilke Homes now requires new investment to meet overheads, achieve further scale and become cash flow positive.

“The wider UK housing market has been hit by rapidly rising interest rates, which has reduced demand and resulted in housing starts falling below pre-pandemic levels.

“Official government figures have also revealed that planning applications in England have fallen to their lowest level in at least 16 years, thanks to uncertainty over planning policy and heightened build costs, highlighting the scale of the challenge in improving housing delivery.”

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Staff sent home as Knaresborough housebuilder seeks urgent investment

A housebuilder based near Knaresborough has reportedly sent its staff home this afternoon after reports it was urgently seeking investment.

Ilke Homes is said to have told several hundred staff not to come into work at its Flaxby factory until further notice.

They have reportedly been told they will be paid, and will be called back in when the company finds an investor. Managers will continue to work in the 250,000 sq ft factory next week.

The company, which manufactures modular homes, was reported by industry publication Building to have been seeking a new investor this week.

Last week, Companies House began action to strike Ilke Homes off the register of companies because it was late filing. It discontinued the action two days later.

The company said it had been given an extension until the end of this month to file its accounts, during which time it was aiming to secure new funding.

Chief financial officer Patrick Bergin told Building:

“We can file, the accounts are ready, [but] the final conversation with the auditor is around whether they include a caution in the audit report that references the severe but plausible downside scenario.

“I’m shooting for the cleanest outcome.”

The Stray Ferret has attempted to contact Ilke Homes but not had a response.

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