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Croudace sees profits fall

FINANCE

THE Government's switch to a greater density in new housing is hitting builders' profits according to Russell Denness, the managing director of Surrey-based Croudace.

The firm made a £10.8 million pre-tax profit in the 15 months to December 2004, which was down from £13.4 million in the preceding 12 months.

Mr Denness said: 'The fall in profits reflects a cooling housing market but we've also noticed build costs went up.

'That's partly higher input costs but layouts under the PPG3 planning guidance are more expensive.

'PPG3 requires more density and now there's less open space, schemes take longer to build and higher quality design costs more.

'It's great for the customers but it costs more money.'

The firm has changed its financial year to the calendar year and the 15 months in the last reporting period saw turnover hit £126.3 million from £86.6 million in the previous 12 months.

Croudace sold 461 homes in the last 15 months at an average price of £227,000 - up from 330 units at an average price of £210,000 - with the bulk of sales provided by housing.

Mr Denness said: 'We've avoided doing too many flats and are glad we did.The first time buyer cannot buy flats for the prices we have to charge to get the land.'

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