CALA on course to deliver fifth consecutive year of record revenues and profits
Edinburgh-based CALA Group today said it is set to deliver record profits and new homes for the fifth year in a row as it hailed a “very strong” performance for the first half.
In a trading update for the six months to 31 December 2016, the upmarket housebuilder revealed it has increased net private reservations by 24 per cent to 610 units, and it is now 80 per cent sold for the full year.
Average selling prices reduced to £504,000 during the period, down from £538,000 at the end of June 2016, which the Group said reflected a change to its product mix and lower exposure to homes valued at more than £1 million.
During the period, CALA contracted 17 sites (1,469 plots) with a potential gross development value (GDV) of £640m and ahead of target hurdle rates, which will now begin being taken through the long planning process. The Group also contracted land with a planning permission or secured a first-time planning permission on 15 sites (1,533 plots) with a potential GDV of £648m.
Building on these sites, if not already commenced, will begin in the next few months once all remaining pre-start conditions have been cleared.
Alan Brown, chief executive of CALA Group, said: “The first half of the new financial year has seen the Group deliver a very strong performance and we are on course to deliver another record year of units, revenues and profits in what would be our fifth consecutive year of record growth. Encouragingly, the positive first half performance has continued into the second half with positive trading momentum since the start of the calendar year.
“In line with our ambitious growth plans, we are certainly doing our bit to increase the supply of family homes across the UK. Our focus in 2017 remains on scaling up and optimising the operational efficiency of our eight regional businesses, to deliver sustainable growth and an annual capacity of up to 2,500 homes within four years.
“The fundamentals underpinning the UK housing market are supportive, the land market remains robust and the mortgage environment continues to be positive. Following the release of the Housing White Paper, we were pleased to see that the Government recognises the need to further reform the planning system and we particularly welcome their plans to ensure that planning departments are better resourced via increased planning fees.
“Planning departments have faced severe cuts in recent years which has in turn impacted developers’ ability to get on site and start building so any measures that will see Local Authorities boost their planning resources are a definite step in the right direction.”