Housebuilder Mactaggart & Mickel has continued to bounce back from the industry’s recessionary nadir with further improvements in sales and profitability, but it has expressed concern at the introduction of a replacement for stamp duty north of the Border.
Chief executive Ed Monaghan said the new land and buildings transaction tax (LBTT), which took effect from 1 April, had hit the upper end of the housing market with a “noticeable slowing” in activity. He also pointed to some impact at the lower end of the market, with details of a successor to the outgoing Help to Buy scheme still to be unveiled.
Results published today by the Glasgow-headquartered group reveal that overall turnover rose by 16 per cent to £68 million in the year to 30 April. Profit before tax jumped 21 per cent to £9.8m.
Monaghan described the year-on-year progress as “solid” after the group returned to pre-recession profit levels in 2014.
The core homes division contributed turnover of £48.5m, up from £44m previously, and forward sales of 82 per cent have been secured in the current trading year. At the firm’s timber frame systems unit, contract wins with new and existing clients are said to have secured a “healthy” order book.
There was a near doubling of annual profit to £700,000 at the commercial property division, while the group also completed the sale of its first development, a Sainsbury’s store in Dalkeith, “marking a significant milestone”.
But Mactaggart’s contracts arm reported reduced turnover of £10.4m, down from £13.3m, as it completed the retrofit of 225 units at the Commonwealth Games athletes’ village.
Monaghan said: “This year marks our 90th in business and the fourth of our five-year plan. We have consolidated last year’s outstanding performance with another period of growth and improved profitability.
“I am pretty optimistic about the outlook but there are still some challenges.”
l Britain’s construction sector remains in “rude health”, driven by the fastest rise in new business for a year, according to the latest Markit/Cips purchasing managers’ index.
Yesterday’s report showed that headline activity eased slightly to give a reading of 58.8 in October, down from a seven-month high of 59.9 in September, but comfortably above 50 which indicates growth.