House sales fall

Stewart Milne plunges to £71.5m lockdown loss

Stewart Milne - housing and housebuilding

Fewer houses were sold by the company last year

Stewart Milne, the housebuilder, is expecting a return to profitability after plunging to a £71.5 million loss last year as it suffered a rise in costs and was forced to write down the value of its land.

The loss follows a  £48.5m loss in the previous accounting period, which covered 16 months from July 2018 to October 2019, after the business embarked upon a major restructuring programme.

Turnover fell to £269.7m in the 12 months to last October, compared with almost £309m in the previous corresponding period.

Revenue at Stewart Milne’s Timber Systems business fell on a 12-month like-for-like basis by a third from £95m to £65m.

The company sold 836 units, down from 871, in a year when much of the building industry was closed during the first lockdown.

Sales are expected to remain lower this year, coming in at about 700, producing in come of between £270m and £300m.

Finance director Fraser Park said the reduction in volume was a reflection of the uncertainty in the market at the beginning of the financial period, prompting Stewart Milne to set itself more conservative targets.

He said said the business the cost of timber has increased significantly to levels that could remain until the first quarter of next year.

Last year’s loss included £59m of exceptional items, £43m of which was linked to writedowns on the value of the company’s land bank. This included land acquired prior to the financial crisis of 2008 and land under development in the north-east of Scotland that was purchased before the oil and gas downturn of 2015 hit the housing market.

Most of the remaining exceptional charges were linked to the weak market in Aberdeenshire, where the company has recorded “sustained losses” since 2015. This led to the merger of its two Scottish homes divisions and the loss of about 80 jobs, announced in November of last year. The group now employs about 880.

Chief executive Stuart MacGregor said the strong market since the lockdown meant the business was on track to record a profit for the current year.

He said it had also managed to secure an extension to banking facilities until at least March next year

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