Crosby Group in the red after £80m hit

Crosby, the UK house builder owned by Lend Lease, has dived into the red to the tune of ВЈ77m as a result of an ВЈ80m write-down on the value of its land bank and work-in-progress.

The average value of Crosby properties sold dived savagely - from ВЈ281,000 in the previous year to just ВЈ160,000.

Without the write-down hit there would have been a pre-tax profit of ВЈ4m on turnover of ВЈ130m (12 months to 30 June 2008).

In the previous year a similar turnover generated a pre-tax profit of ВЈ30m and shareholders were able to enjoy a dividend of ВЈ32m.

The headline figures fail to emphasise the staggering drop in value of properties sold by Crosby. Working from data presented by Crosby allows for calculations that show:

790 properties sold last year at an average price of ВЈ160,000 470 properties sold in the previous year at an average price of ВЈ281,000ADVERTISEMENT

 

The only comfort for Crosby was the fat it was able to lay down in the good times – the profit margin in 2007 ran to a mouth-watering 22%.

That statistic means that for every property sold for £281,000 in 2007, the property buyer was putting £62,000 straight into the builder’s pocket.

The directors report states: “The company has endured a challenging year.”

New sites were opened in Birmingham, Manchester and Leeds.

Crosby says that when it reviewed the net realisable value of its land and work-progress carrying values in light of the deterioration in the UK housing market, it had to take the axe to its existing figures.

The resulting impairment charge ran to £80m “on sites where the realisable value of the site was less than its carrying value on the balance sheet”.

The £130m-a-year turnover house builder had just 81 employees – five in administration and 76 in operational posts. The bill for wages and salaries ran to £6m.

The drop in profits triggered a cut in the pay received by the highest-paid director. He took home just ВЈ480,000 which was well down on the figure of ВЈ800,000 in the previous year.

However he made ground slightly on the pension front with a further £48,000 put into that pot – up on the £40,000 figure in 2007.

Crosby’s immediate parent is Crosby Lend Lease, part of Lend Lease Europe Holdings.

The ultimate parent is Lend Lease Corporation, an Australian property group.

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