Lower private sales hit profits at Cruden Group

Construction and residential development businesses Cruden Group has enjoyed its nineteenth consecutive year of profitable trading, though a fall in house sales has resulted in a dip in turnover and profits.

Audited results for up to 31 March 2018 revealed that the group generated a turnover of £188.6 million (2017: £200.6m) and pre-tax profit of £9m (2017: £10.5m).

The company’s net assets have increased to £44.7m (2017: £41.6m), which Cruden said will provide a stable platform for future growth.

Formed in 1943 and now in its 75th year of operation, Cruden specialises in providing high quality housing, both for sale and for affordable rent.

The firm attributed the reduction in turnover to the lower volume of private homes sold in the year - falling to 158 from 280 in 2017. This decrease in sales is a simple consequence of timing in the development process, and it is fully anticipated that this number will exceed 220 in the year to 31 March 2019, it added. The average house sale value increased to £270,000 (2017: £226,000) due to the diverse range of homes settling.

Construction turnover increased by 4% to £167m (2017: £160m) with activity concentrating on building affordable homes for housing associations, local authorities and other publicly funded clients. Cruden’s forward order book in this core activity has continued to grow as it gears up to help meet the Scottish Government’s affordable housing targets.

As a result, headcount has increased since 31 March 2018 to a current headcount of 655. In the East of Scotland, headcount has grown by approximately 12% in six months which coincides with a move to an innovatively designed, new regional headquarters in Edinburgh.

Kevin Reid, Cruden Group managing director, said: “To have had nineteen consecutive years of profitable trading is a tremendous achievement, especially against the challenging economic backdrop we’ve had during this period.

“Despite unsettled economic conditions, demand in the housing market remains encouraging and we continue to see strong interest in our diverse range of quality, affordable and energy efficient family homes. The continued availability of Help to Buy (Scotland) has also been beneficial to our first-time buyers and has given them a welcome first step on to the housing ladder.

“We have a strong forward order book and this will generate increased levels of activity in the construction of much needed affordable housing for our clients, and their prospective tenants. The outlook looks positive for the year ahead and I expect our turnover to increase in line with this, and with our own exciting future plans for our next phase of private housing developments in key locations across central Scotland.”

Tags: Cruden Group

Related posts