Aberdeen market 'stabilising'
Government boost sets Cala on new record
The company said the year had started positively and is expected to remain strong for the rest of the year.
In a call to Daily Business, Alan Brown, chief executive, said the Scottish central belt had been “a very good market for us” and that there were signs of stability in the Aberdeen area.
“Aberdeen has been challenging for a couple of years for obvious reasons but prices have stabilised and we are reinvesting in our ‘spiritual home’,” he said.
The company has bought three sites in the city since November.
In its interim statement, the company said total reservations across the group’s activities have risen 24%, a significant increase on the same period last year, while sales per site per week have increased to 0.5 (2015: 0.45), exceeding the group’s historic trading range.
Revenue per site per week during the period, a far more meaningful metric of Cala’s performance given the group’s size relative to that of its larger peers, was £251,000, an increase of 6% on the prior year. This has been driven by a higher volume of homes sold under £1m where the market is stronger.
Trading during January 2017 has been “extremely encouraging” and the group is now 80% sold for the full year.
The company said fundamentals underpinning the UK housing market continue to support the business and the industry as a whole.
It said the land market remains open for business, with high quality sites coming to market in prime locations. The mortgage environment also continues to be positive, with UK mortgage approvals rising to an eight-month high in November as UK unemployment fell to its lowest level for more than a decade and wage growth picked up pace.
Mr Brown said: “The first half of the new financial year has seen the group deliver a very strong performance and we are on course to deliver another record year of units, revenues and profits in what would be our fifth consecutive year of record growth.
“Encouragingly, the positive first half performance has continued into the second half with positive trading momentum since the start of the calendar year.
“The fundamentals underpinning the UK housing market are supportive, the land market remains robust and the mortgage environment continues to be positive.
“We were pleased to see that the [UK] Government recognises the need to further reform the planning system and we particularly welcome their plans to ensure that planning departments are better resourced via increased planning fees.
“Planning departments have faced severe cuts in recent years which has in turn impacted developers’ ability to get on site and start building so any measures that will see local authorities boost their planning resources are a definite step in the right direction.”
Speaking to Daily Business he said the Scottish government had been very positive towards the sector but he did not expect any changes to the land and buildings transaction tax which has been criticised for deterring executives moving to Scotland.
17 new sites (1,469 plots) contracted during the period with a potential gross development value (“GDV”) of £640m
Planning permission granted on 15 sites (1,533 plots) with a potential GDV of £648m
Continued focus on Southern England to drive future growth, with a majority of new sites contracted over the period in the region
Net private reservations up 24% to 610 (2015: 490)
Average selling price reduced to £504,000 due to product mix; lower exposure to homes valued above £1m (2015: £529,000)
Private sales per site per week of 0.50 (2015: 0.45) from 47 active selling sites (2015: 42)
Strong trading during early weeks of 2017; Group now 80% sold for FY17 and commenced forward selling for FY18