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Peveril house sales boost B&K profits

FINANCE - Sales at Bowmer & Kirkland housing division predicted to increase by 25 per cent

SALES at Bowmer & Kirkland's house building arm, Peveril Homes, should leap by a quarter this year.

Peveril Homes built 200 houses in the year to August 2003 at an average price of £200,000, making a strong contribution to B&K's pre-tax profits last year, which leapt £3.7 million to £19.8 million.

Group finance director Melvin Sheldon ruled out acquisitions to bolster Peveril. He said: 'Our optimum level is probably 250 units within the 60-mile radius of Derby that we operate in.

'Above that, we would probably have to open another office, which we don't want to do.'

Overall, group turnover dipped £10.7 million to £487.4 million last year due to a strong 2002, when the firm's contracting arm took on a mixed scheme in Slough and student accommodation in Colchester, which together had a combined value of £40 million.

B&K does not break out figures for individual divisions but workload at its Irish operation, Central Steel, rose £2 million to £8.3 million.

With group operating profits up by £3.7 million to £19.8 million and turnover down, margins rose from 3.2 per cent to 4.1 per cent.

Mr Sheldon added: 'Contracting margins are quite tight.

Turnover for this year is likely to be a similar level to the last two years and we hope to return an acceptable level of profits that should be above those of 2003.'

B&K is targeting the health and education sectors for work but more than half of the firm's workload comes from the private sector and a similar amount is still won by competitive tender.

Mr Sheldon said: 'You have to win a client's confidence to win repeat work and we find that is normally done by competitive tender.'

B&K continues to invest in training its 1,400-strong workforce, whose total wage bill surged £6 million to £43.5 million.

The wages of the firm's highest-paid director, who is not named, leapt £1.5 million to £2.5 million.