London developer survives after pre-pack administration

A London-based residential developer has secured its survival after a pre-pack administration deal by its owner. 

Sheen Lane Developments called in administrators from Quantuma on 1 April after issues first emerged last year.

The firm appointed receivers last May for three special purpose vehicles (SPVs) which each held a contract for different development projects, Quantuma said.

It confirmed to Construction News that the Richmond-based firm had been bought out of administration by a company called Radio City Developments Ltd. 

The new owner’s majority shareholder, Martin Tynan, is also the owner of Sheen Lane, according to Companies House records. 

The value of the deal was undisclosed.

Pre-pack administrations often involve the shareholders of existing companies acquiring the distressed entity through another company.  

All 22 of Sheen Lane’s staff have also transferred to Radio City Developments, Quantuma said. 

In its most recent annual accounts, for the year to 30 April 2023, Sheen Lane posted a pre-tax loss of £27m from turnover of £50.5m, with net liabilities of £8.5m.

These were worse figures than the year before, when the firm made a loss of £5.8m from revenue of £72.2m.

In the latest accounts, directors said the loss was due to “exceptional circumstances” amid high interest rates and market uncertainty.

But they foresaw a return to profitability in the next financial year amid improved market conditions.

“Relationships have been formed with a number of reputable lenders,” the directors added.

However, the firm’s auditors, Butters Gates & Company, said in the latest accounts that the pre-tax loss and net liabilities, “along with other matters, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern”.

Sheen Lane, which was launched in 2013, has delivered around 2,600 homes and 11,150 square metres of commercial space across 48 residential schemes in London and the South East, according to its website. 

It currently has 632 homes either under construction or in planning.

Active projects include the 154-home Aviator Park scheme in Addlestone, Surrey, and the former House of Fraser store at 80 George Street, Richmond-upon-Thames.

Brian Burke, joint administrator and managing director at Quantuma, said: “We are delighted to have secured a sale, ensuring all employees’ jobs have been saved.”