HIGH-END property developer AMA is poised to reap the benefits of an improving housing market as it pushes into new areas, such as student housing after a tough year.
Despite what it said had been “very disappointing” private housing sales last year – which contributed to pre-tax losses at AMA (New Town) widening to £1.75 million from £617,712 – the Edinburgh-based company said it was well placed to benefit from the upturn.
AMA, run by the Afshar brothers, said a decision taken at the start of the downturn in 2008 to complete projects already on site to a “wind and water-tight position” had secured its stock and left it in a stronger position than many competitors who had gone under or downsized.
“This now gives us the platform to take advantage as the market slowly improves,” said the directors in their report to the accounts for the year to October 2011.
The company, behind developments including Springside on the former site of the Fountainbridge brewery, said weak private housing sales during the year which saw turnover fall to £6m from £11.5m reflected both the uncertain state of the economy and the lack of mortgage availability.
Average sale prices per housing unit for the year was £322,575, up from £290,436 the previous year. The company said although higher than in 2010, the 2011 figure was lower than in previous years mainly due to properties coming up for sale at the Springside development being of lower value. Properties at other AMA developments were continuing to command higher unit prices.
The company said it is diversifying some of its activities from housing to “more bankable commodities” such as serviced accommodation and student flats.
It said the move to supply the serviced apartment market, increasingly popular among visitors to the capital, would result in sales of up to 80 units over the next year.
“This should give us turnover next year in the region of £18m to £20m with a margin above industry average,” predicted the directors.
The company plans to deliver such developments by forming joint ventures and using private funds rather than using bank borrowings. It said the first projects are expected to be on stream by the end of 2012.
“The company’s balance sheet, like most companies in these hard times, has taken a few knocks however we firmly believe with strategies we have in place that it will not be long before it is back above pre-recession levels.”
Net debt rose to £59.7m from £49.8m and the company said its bankers were “extremely supportive” of its strategy.
“The coming year will see the directors continue to consolidate and grow the business. The directors are looking forward to returning AMA back to profit next year and sustain profitability as a result of the reviewed company strategies.”
AMA, established in 1983, has been involved in developments including the 90-home Caer Amon project at Cramond, Succoth Heights at Murrayfield, the Printhouse at Canonmills and the Greenhill Court development on the site of the old Bruntsfield hospital.
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