High-rise off-site manufacturing firm Vision Modular Systems saw its profit fall back by 25% last year as it suffered from the impact of increasing costs.

The modular apartment specialist, which is behind some of the most high-profile off-site schemes in the UK, including Greystar’s 44-storey George St towers scheme in Croydon, reported pre-tax profit for the year to November 2021 of £5.2m, down from £6.9m in 2020.

The firm said its turnover remained broadly flat, rising slightly at £64.8m, up from £63.4m last year. However, this remains significantly below the pre-pandemic numbers for the business, which reported pre-tax profit of just under £11m on turnover of £87.8m in 2019.

The business said in reports filed at Companies House that "Costs have increased because of increasingly gloomy developments in the world and this has caused downward pressure on margins and profits."

Despite the drop in profit, the firm grew its net assets to over £44.4m at the end of the year, up from £40.2m at the same point in 2020.

The firm nevertheless saw a major reduction in its headcount during the year, which fell from 240 to 176, a drop of 64 staff, 27% of the total, and which was unexplained in the accounts.

The accounts nevertheless demonstrate comparative stability at the firm next to a period of turmoil for a number of other modular providers. The last year has seen both rival high-rise off-site MMC firm Caledonian Modular collapse into administration, before being bought up by concrete frame specialist JRL, as well as Urban Splash’s high-profile modular joint venture with Sekisui House and Homes England, Urban Splash House, go to the wall.

The accounts cover a period which saw the completion of Vision’s first Greenford Quay scheme, also for Greystar, which consisted of three buildings from 8-14 storeys containing 379 apartments.

This follows on from the construction of the George St towers, which, when built, were the tallest modular-built towers in the world. Vision claimed in its accounts that it has now delivered three of the world’s five tallest modular buildings. The firm’s sister business, contractor and developer Tide Construction, recently won planning permission for a 48-storey student housing scheme at 30 Marsh Wall in London’s Docklands to be built out by Vision Modular Systems.

Vision recently published a study of the carbon impact of its build process which found that its factory-made homes cut embodied carbon emissions by more than 40%. Its accounts statement said: "The single biggest factor in our continuing success is our ability to embrace the revolution taking place in offsite construction and the development of modular technology."

Vision Modular Systems has been contacted to provide further comment to explain the performance in the accounts.

Source: Housing Today