Cruden Group weathers year of challenges to maintain profitability
Cruden Group managed to deliver a profitable trading performance and maintain its strong financial position despite challenging trading conditions, the residential development and construction businesses said today as it announced its annual results for the year to 31 March 2021.
Since its formation in 1943, the group has built or modernised over 135,000 homes for both public and private sectors, and currently delivers around 1,200 properties every year - nearly one in fifteen of every home built in Scotland.
Despite the group’s financial results being significantly impacted by Covid-19 and a reduced effective trading period within the year due to the Covid-19 lockdown from March to June 2020, it has delivered its twenty-second consecutive year of profitable trading (£2.4m PBT before exceptional items due to Covid) with reported turnover of £191.5m. This consisted of construction for external clients of £153m, representing an average of approximately 2,900 units under construction during the year, and the sale of private housing of £38m (including the group’s share of joint ventures) representing 159 private homes sold in the year, both activities affected by the Covid-19 lockdown and ongoing restrictions.
Importantly, the group said it has maintained a strong capital base with net assets of £48.8m, cash reserves of £49.8m and access to significant undrawn bank facilities - all combining to provide a strong and stable platform for the group’s operations.
The number of homes sold dropped from 241 to 159, as a direct impact of lockdown and the Covid-19 pandemic, however, the average sales value grew from £196,000 to £225,000, highlighting strong demand for larger, family housing and the ongoing resilience of the UK housing market.
Cruden is one of the country’s major employers, with nearly 600 direct members of staff, including 60 apprentices and up to a further 1,000 subcontractors in its supply chain at any one time. The group is committed to its long-established traditional apprenticeship programmes, with around 17% of Cruden Building’s site-based workforce currently undertaking trade apprenticeships.
It is important that employment opportunities continue beyond the apprenticeship programme and the group is delighted to report that every employee who completed their apprenticeship this year was offered ongoing employment with Cruden. Young people are the lifeblood of the construction industry and the group is committed to recruiting, training and investing in its entire workforce, with the modern apprenticeship programme playing a major role. This approach is all the more important given the widespread skills shortage, which has worsened during the pandemic.
Another significant area for the group is delivering housing in partnership with its clients which has a range of new technologies embedded to reduce energy consumption. The Group is already progressively contributing to the renewed environmental focus as Scotland aims to achieve Net Zero Carbon building emissions by 2045, as demonstrated by the following projects/initiatives:
- Delivering the design of a landmark project for Scotland - the country’s first Net Zero housing development on the site of a former care home, the Silverlea housing and community project, as part of the £1.3bn Granton Waterfront regeneration project.
- Building Scotland’s first social housing development to ‘Passivhaus’ standard on behalf of social housing provider, Hanover (Scotland). The homes use up to 90% less energy for heating and cooling than conventional buildings, helping to tackle fuel poverty and future-proofing occupants from unexpected weather patterns.
- Signing a green energy supply contract with Scottish Power that will see the Group’s construction sites powered 100% by green electricity coming from hydroelectric, wind farms and other renewable sources with zero CO2 emissions.
- Delivering green energy solutions including ground and air source heat pumps as well as the infrastructure that will enable electric vehicles charging as standard across many Cruden developments.
New projects that also demonstrate the group’s capacity for large scale residential development and construction:
- Developing, in partnership with client City of Edinburgh, the regeneration site at Fountainbridge which will comprise 460 new homes for multi-tenure rent, along with associated retail, office and community space, all targeting significant levels of sustainability through fabric first design accompanied by an innovative exhaust air source heat pump energy solution to deliver net zero carbon homes.
- Delivering 344 homes to clients Sanctuary Housing Association and Beech Grove Homes at the iconic Victoria Infirmary site on the south side of Glasgow
Commenting on the group’s operations, Kevin Reid, chief executive of the Cruden Group, said: “I am very proud that our experienced and dedicated team has overcome the significant challenges faced by the construction sector, including having to suspend all activity for three months of this financial year. We have weathered the storm and the outlook for the year ahead looks bright and our future construction pipeline is robust, particularly as we are included in several important procurement frameworks. We are well placed to benefit from these frameworks together with significant opportunities driven by a robust housing market in the central belt of Scotland. Our house building activities have expanded in recent years and market conditions and opportunities provide further scope for growth in this area.
“While the industry is working at full stretch to regain the ground lost during the last 18 months, we are extremely mindful that climate change has the potential to pose greater challenge than the pandemic, so we are firmly focussed on reducing our carbon footprint while constructing green and energy-efficient homes in order to contribute to a better future for the planet.”