Cala Homes aims to treble turnover by 2016

Aaron Morby 8 years ago

House builder Cala has revealed ambitious plans for a three-fold rise in turnover by 2016, after posting record results for 2014.

The firm, which acquired Banner Homes in March for a reported £200m, said it now ranked among the UK’s top 10 house builders and would seek to expand in the south east of England.

Alan Brown, chief executive of Cala Group, said: “2015 will be the group’s first year of significant volume growth since the implementation of its new growth plans and this delivery is underpinned by a strong development portfolio, well spread across Cala’s eight operating regions.

He said increased development activity would be seen in the East of Scotland and Aberdeen where Cala’s existing landbank is already very strong and through the group’s south east of England operations where there was significant unmet demand for upmarket homes.

Brown added: “We expect cost pressures to remain a challenge to the business in the year ahead and for the availability of supply of skilled tradesman to feature as a growing issue for Cala and the industry as development activity continues to increase.”

During the year to June, the group more than doubled pre-tax profits to £27m from £12.6m the year before.

Completions over the the year remained broadly flat at 677. But a sharp rise in average selling prices from £335,000 to £423,000 helped to lift turnover 22% to £294m.

The big rise in selling price was driven by a change in site mix, sales inflation and Banner’s higher ASP.

Operating margin was also up to 13.6% from 10.2% the year before.

Following the Banner acquisition, Cala is operating from three regional centres in Scotland and five in England.

Turnover in this financial year is expected to top £500m after a full year contribution from Banner.

During the year, the Group acquired land or secured planning permission on 42 sites for 3,256 homes with a £1bn development value, at an average selling price of £318,000

Cala’s owned and contracted landbank rose 27% to 12,690 plots with a potential gross development value of £4.7bn, up 48%.

Net bank debt rose from £40m a year ago to £142m due to the Banner acquisition and greater investment in land to support Cala’s growth plans, resulting in gearing of 45%.

Brown added: “Our growth plans are underpinned by the strength of our landbank, and the quality of our development locations with 81% of the projected profit to be delivered through our business plans in the next four years already owned, contracted or with deal terms agreed.

“We have entered the new financial year in a very positive position thanks to strong forward sales and, with a stable market backdrop, I am very excited about Cala’s prospects for the year ahead which will deliver our  first year of significant volume growth since the implementation of our new growth strategy.”

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