Share Name Share Symbol Market Type Share ISIN Share Description
Lakehouse LSE:LAKE London Ordinary Share GB00BSKS1M86 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 37.00p 36.00p 38.00p 37.00p 37.00p 37.00p 27,000 06:40:25
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Support Services 333.8 -33.3 -18.6 - 58.29

Lakehouse plc Press Commentary - Hackney Council Letter

04/07/2017 6:37pm

UK Regulatory (RNS & others)


Lakehouse (LSE:LAKE)
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RNS Number : 1284K

Lakehouse plc

04 July 2017

Lakehouse plc, the asset and support services group

Press commentary

Hackney Council Letter

Lakehouse plc ("Lakehouse" or "the Group"), the asset and support services group, notes certain recent press articles featuring the Group.

Grenfell Tower

Lakehouse recognises the enormity of the recent tragedy at Grenfell Tower, which resulted in the loss of many lives. Lakehouse has a long and proud history of working with councils and housing associations in maintaining their housing to a high standard and ensuring residents have a safe and comfortable environment. In difficult times, it is important that housing providers and support services organisations like Lakehouse collaborate in ensuring the highest standards are maintained.

Lakehouse confirms that its compliance business, Allied Protection ("Allied"), was engaged by Kensington and Chelsea in January 2017 to certify the appropriate working of its installed fire safety systems. Allied is satisfied the system was maintained in accordance with the requirements and all evidence presented to date indicates that it performed as it was designed to do. Allied was however not responsible for the specification of the system.

At this particular time, we are offering Kensington and Chelsea and the emergency services teams our full support with information and resources. Currently we have not been required to provide any information to an inquiry, nor has there been any inference of any contractual shortcomings on Allied's part.

The press have queried why Lakehouse did not say anything after the Grenfell fire. We were contractually compliant and had previously informed the market, on 17 May 2016 and 24 January 2017 that we were performing works for Kensington and Chelsea.

Hackney Council

A recent press article sought to link a dispute between Lakehouse and Hackney Homes ("Hackney") with the Grenfell Fire. The two matters are wholly unrelated.

In section 15.2 or Part 14 of the Group's prospectus of 18 March 2015 ("the Prospectus"), we made the following disclosure:

"The Company is aware of alleged frauds relating to two specific contracts for a particular client having been carried out in 2013 and 2014 by certain employees of the Company and certain sub-contractors to the Company, working in collusion with a consultant engaged by that client to oversee specific works carried out under those contracts. Having been informed by the Company, the client commenced an investigation into the alleged frauds. As far as the Company is aware, the alleged frauds related to the "over-payment" by the client for works undertaken by certain sub-contractors, the non-performance of contracted works or the performance of works to a standard below the requisite contract requirement by the sub-contractors and the subsequent processing of invoices representing works not completed and outside the scope of the relevant contracts. Since becoming aware of these issues, the Company has co-operated fully with the client's investigations and those of the police into the alleged fraudulent activities of the individuals concerned, including the employees of the Company. The Group continues to perform other contracts for the client and is working with it to undertake the works not performed under the two affected contracts and to rectify the works carried out below the requisite standards. The Company has made a provision in its accounts for the year ended 30 September 2014 of GBP3,000,000 comprising GBP1,500,000 in respect of monies retained by the client and/or anticipated to be repaid to the client, GBP1,000,000 in respect of remedial works to be carried out at the Company's expense and GBP500,000 in respect of legal and other fees incurred. The Company has terminated its contract with the relevant sub-contractors and dismissed the two employees involved in the alleged frauds. The Directors of the Company, having taken legal advice, believe that the prospect of any prosecution of the Company in relation to these matters to be low. Whilst no charges have currently been brought against any of the individuals involved, the Company is aware that investigations by both the client and the police of the actions of these individuals are ongoing and it intends to continue to co-operate with such investigations and to support any action taken against such individuals. In light of these events, the Company instructed its external legal advisers to conduct a review of documentation in connection with the alleged frauds and to review the Group's internal compliance controls, policies and procedures to ensure that these are sufficiently robust. Having considered the conclusions of this review and implemented its recommendations, the Company is confident that it has taken appropriate action in order to mitigate its position in relation to the alleged fraudulent activities and that its controls, policies and procedures are robust, fit for purpose and capable of preventing and/or identifying any future risks."

In light of a letter written by Hackney to Councils across the country, we confirm that the client referred to in the above disclosure was Hackney Homes. The matters contained in the above disclosure have not changed materially since 18 March 2015 and it is important to point out that at no stage has there been any suggestion of fraud on Lakehouse's part. Lakehouse continues to co-operate with the Metropolitan Police in bringing the culprits to justice and the investigation extends not only to certain former rogue employees of and sub-contractors to Lakehouse, but also representatives of Hackney.

There has never been any suggestion of wrongdoing on Lakehouse's part, nor compromise in the interests of resident safety. Importantly in this regard, the press reference that Hackney drew the attention of the police to alleged sub-standard works is factually incorrect. Further, the Group can confirm that the GBP540,000 exceptional gain, reported on 27 June 2017 under "impairment of receivables" in our interim results to 31 March 2017, related to a series of successful adjudications by Lakehouse against Hackney for works Hackney alleged were defective and were determined to be fully due and payable. We continue to pursue Hackney for further sums which we are due contractually and for which they have refused to make payment to date.

Other matters

We have been made aware that the press intends publishing further articles regarding legacy matters in Lakehouse, most notably a fire at the Haberdasher's Aske school. This was disclosed in section 15.1 of Part 14 of the Prospectus and again, no material changes have occurred since the disclosure was made.

Moving Forward

Naturally our thoughts are with the families and residents who have been impacted by the Grenfell fire. Lakehouse is a leading asset and support services group and operates to the highest standard of resident safety and client confidence.

We have found the past week highly disappointing, but will not be distracted from continuing to provide a high level of service to clients and residents alike and support them during this difficult and traumatic time.

Enquiries

 
 Lakehouse                          Financial Public 
                                     Relations 
 Bob Holt, Chairman, 07778          Camarco 
  798816 
 Michael McMahon, Chief Operating   Ginny Pulbrook 
  Officer 
 Jeremy Simpson, Chief Financial    Tom Huddart 
  Officer 
 Telephone: 01708 758 800           Telephone: 020 
                                     3757 4992 
 
 Stockdale Securities 
 Andy Crossley 
 Antonio Bossi 
 Telephone: 020 7601 6100 
 

Notes to editors

Lakehouse is an asset and energy support services group that constructs, improves, maintains and provides services to homes, schools, public and commercial buildings with a focus on clients in the UK public sector and regulated markets. Services are delivered through four divisions: Compliance, Energy Services, Property Services and Construction.

The Group was founded in 1988 and is headquartered in Romford, Essex. It currently employs some 2,200 staff from 32 offices across the UK.

This information is provided by RNS

The company news service from the London Stock Exchange

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