Housebuilder vows to double in size
Upmarket building firm CALA set out plans to double in size today as it taps into the boom areas of its Scottish heartland and England's commuter belt.
The Edinburgh-based business grew underlying profits by 37% to a record £12.5 million in the year to June 30 after completing the sale of 694 homes to private buyers at an average price of £335,000.
Its intention to more than double in size by 2017 follows the sale of the business in March to insurer Legal & General and private equity firm Patron.
It plans to significantly increase development activity in its heartlands of East Scotland and Aberdeen and to grow its presence in the South East of England, where it believes there is unmet demand for high quality homes.
Chief executive Alan Brown said the support of two blue-chip financial backers was key to the company's growth ambitions.
He added: "This investment has already begun to bear fruit and we are now able to develop land within our existing landbank at a faster rate while simultaneously seeking to acquire additional plots in high growth areas such as the East of Scotland and the South of England.
"This in turn is allowing us to take on more staff and open more sites."
The company said the seasonal slowdown in the housing market has been less prevalent this summer with the impact of the first stage of Help to Buy and continuing improvement in the UK mortgage market boosting demand.
Its average weekly sales rate since July 1 has exceeded expectations and at 0.51 private reservations per site per week is running in line with its full year target despite covering the summer holiday period.
The company targets the more affluent areas of the UK such as the Home Counties, the Cotswolds and areas around Scotland's major cities. According to the Nationwide building society, prices in Aberdeen have doubled in the past ten years.
Lloyds Banking Group, which took control of CALA in a debt-for-equity swap in 2009 before selling the business this year, is continuing to support the company through a £100 million five-year banking facility.
CALA, which stands for City of Aberdeen of Land Association, has a land bank of more than 10,000 owned and contracted plots with a potential gross development value in June of £3.2 billion. It r eturned to profit in 2011, having been loss-making since 2008.