Mactaggart & Mickel Group announce increase in profit for fifth year in a row
Fourth-generation Scottish family housebuilder Mactaggart & Mickel Group have today announced their financial results for the year to 30 April 2017 showing a rise in profits for the fifth consecutive year with profit before tax up 22 per cent to £12.7 million (2016: £10.4 million) and turnover increasing by 14 per cent to £74.3m (2016: £65.1m).
Mactaggart & Mickel’s flagship Homes division posted a robust performance. Turnover increased by 12.7 per cent to £62m (2016: £55m) and gross profits rose to £15.1m (2016: £13.7m). The division sold 167 homes this financial year (2016: 169 homes) and saw its average house sale value climb to £351,000 (2016: £290,000) due to the development sales mix and careful targeting of high-quality locations. Two new developments were launched in Scotland this year: Red Lion in Newton Mearns and Millerhill at Shawfair in Midlothian.
One of the main drivers behind the Group’s impressive results is continued investment in their English Strategic Land business. Promoting these developments and successfully securing residential consents has proven beneficial in terms of this year’s land sales where turnover has increased to £4.7m (2016: £0.8m).
Mactaggart & Mickel Group’s long-term goal to expand into the English house building market reached a major milestone this year with the purchase of two sites for development in Oxfordshire, both expected to begin in 2018. This cements the Group’s ambition to expand and grow the company before a UK audience.
Chief executive Ed Monaghan said: “These results show that we have delivered an excellent financial performance, continued to grow the business and increased profits and turnover. This has been achieved against a backdrop of investment in the development of our employees and continually improving and evolving the business.
“Realising our strategy to expand into the English house building market has been a significant milestone for the Group this year, and this focus will continue in the years ahead.
“Earlier this year we won the highly acclaimed Queen’s Award for Enterprise for the Glasgow Commonwealth Games Athletes’ Village, as part of the City Legacy consortium – an enormous achievement for the whole team. I’m equally proud that we continue to be recognised for the top quality build projects that we deliver. Ultimately, client satisfaction drives our success and we have achieved a 5-star rating for customer satisfaction from the Home Builders Federation for the fifth year in a row, together with our full sales team securing accreditations from the Institute of Customer Service.
“The Group is in strong financial health and outlook remains positive for 2018 as we broaden our geographical reach and invest in new markets.”
Operational highlights include:
- Homes – turnover increased to £62m (2016: £55m)and gross profit to £15.1m (2016: £13.7m) with 167 units sold (2016: 169 units). Two brand new developments were launched this year - Red Lion in Newton Mearns and Millerhill at Shawfair in Midlothian. The upcoming Homes England business made significant progress with the purchase of two sites in Oxfordshire, expected to begin in 2018.
- Timber Systems – turnover at the Timber Systems division remained steady at £6.3m
(2016: £6.3m)with gross profits relatively steady year on year. The year saw an increase in the number and variety of external contracts, and the development of new products, plus the introduction of a new backshift at the factory, increasing operational efficiency to meet growing demand.
- Contracts – the Contracts team has progressed plans for more developments of affordable homes and currently have over 100 units in the pipeline for upcoming sites at Symington, Killearn, Malletsheugh and Millerhill at Shawfair.
- Commercial Property – the Commercial Property team achieved a turnover of £2.5m; their best year since establishment in 2009. They invested approximately £6.2m on two new acquisitions; a portfolio of four Iceland stores and retail units in the heart of Edinburgh with redevelopment potential.
- Private Rented Sector (PRS) – the PRS division plan to grow their £60m portfolio in Scotland and England with continued investment in the London lettings market; their investment in this portfolio in 2017 almost doubling during the year to £10.3m.
- Strategic Land– the Group’s Strategic Land division had an excellent year, realising their most profitable site to date in the village of Kingston Bagpuize, Oxfordshire, and several more sites continue to be progressed through the planning system. This reinforces their strategy to diversify into markets and geographical areas where opportunities remain strong.
- Investment - £20m was reinvested in the year in new land in both Scotland and England as well as new commercial property assets and an expanding London residential property portfolio. The Group’s Investment Fund made investments in the year in private equity, start-ups and growth companies while maintaining healthy debt and gearing levels.