S Harrison reports record pre-tax profits of £12m
Property and development company S Harrison has reported record profits for 2018 thanks in part to a “substantial” investment in Edinburgh in recent years.
With low gearing, a strong balance sheet and significant cash reserves, chairman Martyn Harrison said the company is excellently placed to build further on its success, focusing on off-market opportunities.
In the year to 31 December 2018, the York-based group delivered profits before tax of £12.4 million (2017: £4.7m) on a turnover of £47.07m (2017: £29.2m). At the end of the year net assets totalled £55.9m (2017: £46.0m) of which £16.81m (2017: £7.3m) was held in cash.
“By any standards that is an excellent achievement,” said Martyn Harrison, who praised the team for their professionalism and commitment. But, he added, it is the long-term performance of the group, now in its 67th year, that is the most pleasing factor.
“Despite a record profit performance in 2018, what pleases me more is the longer view. Because development is a business with peaks and troughs, a more important measure of success is the Group’s consistency of profit performance over time. Taking a rolling three-year perspective to level out those peaks and troughs, the company continues to show sustained and impressive growth.”
In Edinburgh, S Harrison is currently converting the Grade A listed Buchan House, on the north-west corner of St Andrew Square, into a 72-bedroom Malmaison hotel complete with Chez Mal Bar and Brasserie. Work is due to complete in November 2019.
The company has also submitted planning applications to create two student accommodation schemes complete with high-quality amenities, consisting of 269-bedrooms on Gorgie Road next to the Water of Leith, and another with 394 bedrooms, on the corner of Westfield Road and Westfield Avenue, close to Murrayfield Stadium. S Harrison acquired both sites last year.
In addition, the firm is currently exploring opportunities for a 0.6-hectare site on Ocean Drive in Leith, as well as pursuing planning approval to transform a 1970s office building in the West Coates area, into a new hotel development. The gross development value of the five current schemes will be approximately £150m and the company is now exploring further opportunities across Scotland’s central belt.
In 2018, a significant proportion of S Harrison’s schemes focused on the hotel and student accommodation sectors with major schemes delivered for Leeds University, Hotel du Vin in Stratford and Travelodge in Lincoln.
MD Ann Scott expects that emphasis to continue in 2019 and beyond.
She said: “But, our strength in other sectors – private and social housing, office, retail and light industrial – enables us to capitalise on other opportunities when they arise, deploying our extensive cash reserves to kick-start schemes.”
Looking ahead, Martyn Harrison said: “2019 and beyond will see us retain our focus on identifying off-market opportunities. Our independence, cash reserves and sound financial standing allow us to move quickly and decisively, often bringing to fruition schemes where others have seen no potential, or where others have tried and stalled.
“With that flexibility, and the breadth of our market experience developed over 66 years, we focus on markets that are most vibrant. We apply our stringent cost-control disciplines and our realistic expectations to ensure that we bring forward and develop schemes which are deliverable and profitable for all involved. It is that combination, I believe, of financial stringency, market understanding and development insight that makes us so attractive as a partner to the blue-chip companies with whom increasingly we work.”