Home comforts for record breaking Cala
- No worries over Scottish tax changes
- Creating jobs and trebling turnover
It is clear from the latest figures from Cala Homes that the top end of the housebuilding market remains the place to be. The Scottish company says it is on track to treble turnover and will be creating jobs to cope with demand.
Its annual results, published today, show a company in rude health with record pre-tax profits more than double the previous year and expectations of greater savings and benefits from its acquisition of Banner Homes than hitherto forecast.
The only expression of disappointment is that the Help to Buy scheme has yet to be extended in Scotland. The company doesn’t benefit that much from the scheme because its customers are in the higher price bracket. Nonetheless, help for homebuyers at the bottom end of the market helps feed demand higher up.
There is no mention in the statement about the recently introduced land and buildings transaction tax (LBTT), the Scottish replacement for stamp duty which will adversely affect those in the upper reaches of the housing market. In Cala’s case it is not thought to be sufficient to warrant concern about its impact on strategy and growth. Its average selling price is £345,000. For Banner Homes, which has extended its reach into the south east of England, it is £800,000 where extra taxes do not make such a big difference to buyers’ decisions.
Chief executive Alan Brown speaks of the year to June being “transformational” for the company which is now in the top 10 of UK housebuilders by revenue. These are certainly different circumstances to those which prevailed in 2008 when the company plunged to a £266 million loss.
The company, now owned by Patron and Legal & General, has benefited hugely from its acquisition in March this year of Banner which has accelerated its expansion and added a team of individuals who have improved performance. Cala has identified a further £2m a year savings it can make from the deal.
While some commentators will be pushing the flotation line, there is no talk of it at Cala. With cash rolling in and profits hitting new records it is clear that it does not need to access public markets for capital.
Pre-tax profits rose 117% from £12.6m to £27.3m on revenue up 22% from £240.8m to £294.2m.