House builder Stewart Milne said yesterday it continued a slow recovery in its profitability last year as it revealed an increase in turnover and 26 per cent boost in house sales.
Managing director Glenn Allison said the industry remained a “tough business”, although the Aberdeen-based company has seen some benefit in sales of houses from its involvement in a number of government-backed schemes, including the National Housing Trust (NHT) initiative and a consortium developing eco-friendly houses.
The housebuilder said it built 684 homes in the year to the end of June 2012, up from 509 the previous year.
Allison said the rise in activity was not a sign that the housing market was on an improving trend, but because of a number of factors including the ability to meet market demand with its development of small, more affordable homes in Aberdeen and high-end executives homes that are not as reliant on the still-moribund mortgage market.
Milne made a pre-tax profit of £500,000, up from £400,000 last year, while turnover rose about £40 million to £268.1m. Operating profits on its core business improved 21 per cent on the previous year to £19.3m, but one-off costs related to shutting down part of its construction business in April hit its bottom line by £8.29m. Part of the business was sold to construction firm, Keir.
The company reduced its bank debt to £229.2m from £245.8m on an existing facility that is due to expire in June 2013. The firm said it is in negotiations with Lloyds Banking Group to extend its facilities another three years.