Edinburgh-based housebuilder Cala Homes has outlined its plans for regional growth on the back of record profits, as its chief executive delivered a bullish verdict on the market.
Speaking to Construction News after a trading update for the financial year ending 30 June 2013, chief executive Alan Brown said there had been a “definite” pickup in the market in 2013, adding that the firm would be “increasing our presence” in Edinburgh, Aberdeen, the Midlands and the South of England.
He aims to increase the business through organic growth to a size “much bigger than we’ve ever been before” – doubling turnover in the coming four years.
The housebuilder will open new offices and expand existing operations in these regions, but will stick with a high-end residential mix.
Cala has recently appointed Graham Cunningham and Kevin Whitaker to new regional chairmen roles to manage growth in these key regions.
The group was acquired by Patron Capital Partners and Legal & General Group in March 2013, for a £210m sum.
Mr Brown added that such moves were possible due to the “new opportunities” presented by Cala’s new stakeholders – with L&G keen to expand their presence in housebuilding and Patron’s contacts in asset markets.
And though he said the South of England housing market was “the best part of the UK” at the moment, he insisted all regions were performing.
“We’re in the process of recruiting a substantial number of new staff – we are now seen as a major player, someone who’s got firepower.”
The upmarket housebuilder posted record profits with margins of 16 per cent, along with a four per cent private completions rise to 695 and a reduction in affordable housing bringing total completions down to 851 from 875 in 2012.
Mr Brown expects these margins to increase to around 20 - 21 per cent.
Private reservations in the six months to 30 June were also up 10 per cent on the same period the year before.
The firm bought 35 sites during the financial year, adding 1,353 plots and £470m in gross development value, and Mr Brown said he aims to increase this in the years ahead.
The group has also secured planning consent on 25 sites during the year to deliver 3,379 plots and over £1bn of GDV – including outline planning permission for 2,000 plots at Barton Farm in Winchester.
Barton Farm was controversially given the green light in October after several years of rows including a judicial review.
The land bank now stands at over 9,600 plots with a potential GDV of £3.1bn.
Net bank debt stood at under £50m as of 30 June, with a bank facility of £100m, which represents the lowest level of group debt since the firm went private over ten years ago.