The £60m was split between £30m in public money from Homes England, and £30m of equity from new investors.
Private equity firm TDR Capital has injected more equity into the business and has been joined by new equity investors including affordable housing provider The Guinness Partnership, one of Ilke’s customers, as well as tech investor Middleton Enterprises, and Sun Capital.
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Homes England is providing £30m in debt financing, via a facility from its Home Building Fund.
The government’s housing agency already invested an initial £30m into Ilke Homes bck in 2019, which marked the first time the agency had directly invested to boost an offsite manufacturer’s production capacity.
Ilke Homes said the new funding would allow it to invest in automating more of its manufacturing processes and expand its ‘package deal’ strategy, which offers full development service of site, infrastructure and homes. The investment will also be used to scale-up production and accelerate capacity to deliver up to eight homes a day, up from two today.
The housebuilder, founded in 2017, made a pretax loss of £34.6m for the year to March 2020 on revenue of £12.7m. In 2019, it made a £22.3m loss.
Stephen Robertson, founding partner at TDR Capital, said: “The defensive attributes of residential property are attracting unprecedented levels of investment globally, but without a meaningful strategy to build greener, more energy-efficient homes at scale, we have no hope of meeting climate targets.
“Precision-engineering housing will be a critical solution to greening cities and with housing needs continuing to significantly outstrip supply, we are also confident that this sector is immensely scalable. We believe there is huge potential for multiple other investors to work with us on spearheading this positive change.”
Harry Swales, chief investment officer at Homes England, said: “Manufacturers like Ilke Homes are vital if developers are to build new sustainable homes at the pace and scale the country needs. This debt facility from the Home Building Fund shows our commitment in increasing productivity and efficiency in construction to meet government’s housing delivery ambitions.”
Stephen Stone, a board member of Ilke Homes who floated housebuilder Crest Nicholson in 2013 while CEO, said: “This announcement proves that there is a shared ambition among the public and private sectors to find innovative solutions to structural issues that have dogged the construction and housebuilding industries for decades. This new funding will help us create hundreds more highly skilled, green jobs for an economy that is gearing up for a Green Industrial Revolution.
“The fact that our own clients continue to either invest or increase their stakes in the company is testament to the dynamic approach Ilke Homes has taken to house building in the last three years. Faced with regulatory pressures and a requirement to meet ESG criteria, we are finding that investors are increasingly scaling up their MMC strategies.”
