Gentoo reports Â£8.8million loss as cost of redundancies bites
Housing giant Gentoo recorded a loss of almost Â£9million last year as it picked up the tab for hundreds of job losses.
Annual accounts for the financial year ending on March 31 show the group was £8,840,000 in the red.
But the company says the loss is the result of it having to set aside more than £11million for redundancies and underlying profit remains healthy.
Gentoo confirmed in October that it would have to axe 330 jobs - almost a fifth of its workforce - in a bid to slash costs by £18.25million after the Government announced social landlord rents were to be cut over the next four years.
Although the redundancy process is still under way, and almost 70 of those affected remain in post, budgetary rules mean the cost of all the losses must be included in the accounts for the year in which they were confirmed.
Turnover also fell last year, down from almost £247million in 2015 to just over £215million this year, as the firm’s policy of concentrating on its core business in Sunderland continued.
Gentoo has sold off its glass and panelling manufacturing businesses, Romag and Astley Facades, and its construction arm has formed a new joint venture with Tolent.
Chief executive John Craggs said: “The challenges presented by the combination of the rent reduction and income pressures from non-core activity led to a review of the group’s business strategy and business plan during the summer and autumn of 2015.
“Every aspect of the group was reviewed in full consultation and discussion with the group board, the staff and trade unions. We were able to submit a viable revised business plan in October but this has meant a significant reshaping of the group.
“This has been a difficult year for many of our staff and I am extremely grateful for the resilience and attitude they have shown in implementing and responding to the necessary changes.
“I am sure we will emerge leaner and stronger, focusing on the group’s strengths and developing our care areas of activity.”
Group chairman Ian Self added: “The results for this year reflect the extent of restructuring we have had to undertake.
“Turnover has remained strong, but the restructuring costs of £11.3million have resulted in a deficit of £8.8million after tax. Excluding the one-off restructuring costs, the underlying surplus of the group was £2.5million after tax.”