Last updated 7 February 2022
Keepmoat Limited
Keepmoat’s history dates back to the 1930’s when Bramall and Frank Haslam Milan were set up in Rotherham and Doncaster. The group subsequently grew into one of northern England’s largest social housing contractors and providers of new-build private housing but in March 2017 Keepmoat sold its regeneration arm to focus on housebuilding.
The rump business turns over more than £400 million a year and completed nearly 2,500 units in 2020.
Financials
In the year to March 2020, accounts for continuing operations, which is the housing business, showed turnover falling to £406.0 million (2019: £649.8 million). Adjusted operating profits slumped to £9.6 million (2019: £61.7 million) and at a pre-tax level profits were just £0.6 million (2019: £54.7 million).
To view the financials for Keepmoat Limited, visit Companies House and use Company ID 01998780.
Operations
Keepmoat Homes has its headquarters in Doncaster and nine regional teams within two divisions: the North comprising Scotland, North West, North East and West Yorkshire, and the South Division comprising East Yorkshire, East Midlands, West Midlands and South Midlands. The group has offices in Glasgow, Hebburn, Leeds, Liverpool, Northampton, Nottingham and Tamworth.
In March 2012, Keepmoat merged with southern-based social housing rival Apollo. In September 2014, the group was acquired by Sun Capital and TDR Capital for around £400 million with a plan to create a £1 billion turnover business with a workforce of around 3,300 people.
Keepmoat operated predominantly across northern Britain but expanded into southern England and Scotland with a network of 13 regional offices before the sale in March 2017 of its regeneration business to French energy services giant ENGIE for around £330 million.
In April 2017, Keepmoat launched a modular housing operation with Elliott Group. This joint venture, Ilke Homes, will manufacture modular housing at a factory in Carnaby, east Yorkshire.
The sale of the regeneration business leaves the rump housing operation as the core business, which in 2020 sold 2,460 units (2019: 4,035 homes). The average selling price of these homes was £165,000 (2019: £161,000).
The group is on Homes England’s £20 billion three-year Delivery Partner Dynamic Purchasing System, which includes 66 contractors, house builders and housing associations and started in 2021 (Project ID: 21235829).
Glenigan Data
Glenigan’s research shows that that in the 2021 calendar year, Keepmoat sent in planning applications to build a total of 2,115 units (2020: 1,676 units).
Conclusion: New owners, same plans?
With regeneration gone, the management has been able to focus solely on the housebuilding operation and a target of selling 4,000 homes in the 2019 calendar year was met but the onset of the Covid-19 pandemic has had a significant impact.
Keepmoat is focused on housing, particularly for first-time buyers, who make up 70% of customers, and looking to build larger developments according to Glenigan’s data. The average planning application contained 151 (2020: 84 units) and Keepmoat is working on some major developments. These include the £27 million Lambley Lane scheme in Nottinghamshire, which deliver 430 units (Project ID: 21512856) and the development of 540 units in Leyland (Project ID: 19386399).
Keepmoat’s planning pipeline rebounded in 2021 but remains 17% smaller than the level recorded in 2019, which suggests that the group is sourcing land elsewhere. The group is working with the Guinness Partnership and this joint venture provided 11% of the 2021 planning pipeline and the only exposure to apartments.
In 2021, 92% of the units in planning applications submitted by the group were some form of house with the balance apartments (2020: 99% housing/1% flats).
‘Oven-ready’ land with planning permission can be more expensive but Keepmoat has been a member of Homes England’s Delivery Partner Panels since 2009 and in the decade since then has accessed £387 million in funding initiatives. The group had a landbank of 24,000 plots, which is six years of supply at current build rates.
The focus is on the top half of England with the divisions consolidated from three to two in 2020 and limited exposure to London and the South East, which generated an exceptional cost of £1.3 million.
Unlike many of its peers, Keepmoat routinely uses the Home Building Fund and the HBF has helped accelerate the delivery of 2,200 homes since its inception in 2016.
The acquisition of MCI Developments brought in £10.2 million of revenue and £1.8 million in profit in the first year, while Ilke Homes was snapped up to help offset a skills shortage. Since then, no further significant acquisitions have been made but the risk profile has been reduced in the wake of Brexit with all bricks sourced from the UK.
Keepmoat secured £3.5 million in funding from the government’s Coronavirus Job Retention Scheme, which enabled the workforce to be retained at an average of 1,145 people (2019: 1,141 people) and the wage bill was slashed to £51.4 million (2019: £60.3 million).
A float, or trade sale has been on the cards for some time. Private equity groups TDR Capital and Sun Capital Partners took control on November 28 2014 and the ultimate parent company became Keystone. A float was mooted before being put on hold due to the onset of COVID-19 .
The virus subsequently disrupted many parts of the economy but housebuilders have flourished with a stamp duty holiday. In February 2021 Keepmoat’s owners again began looking for an exit via a trade sale or float with a value of £750 million attached to the business.
The subsequent sale price achieved six months later was £700 million with the business sold to Aermont Capital. That deal at least ends years of speculation, but another private equity group will in the end again want an exit.
Winning Work With Keepmoat
Keepmoat is accredited to a number of trade bodies, such as the Considerate Constructor’s scheme, and operates a robust supply chain strategy focused on providing best value in the delivery of private homes for sale.
Keepmoat operates a suite of group-wide, long term strategic frameworks providing preferential commercial terms and service levels nationally. Subcontractor procurement is managed regionally by commercial teams with emphasis upon local employment and training. The group also works with the Supply Chain Sustainability School and details can be found here.
Support is provided by the group’s central Supply Chain team in order to ensure legislative compliance and to coordinate procurement methodology and works specification. Details on the supply chain can be found here. For further enquiries please contact – supplychain@keepmoat.com.
Key Keepmoat procurement contacts include:
Supply chain director – Paul Jackson, Tel: 01302-556303
Head of Marketing director at Ilke Homes – Sian Foster, Tel: 01302-556303