Builder Stewart Milne posts decline in full-year numbers
The Aberdeen-based group said it had faced "challenging market conditions" in the North-east of Scotland where the market has been hit by the downturn in the oil and gas industry.
Group turnover fell from Â£241.4 million in 2015 to Â£209.2m last year, with operating profits dropping from Â£14.2m to just Â£600,000, as a result of the reduction in the number of homes sold in the North-east. This led to a reduction in turnover for the core Stewart Milne Homes business to Â£163.7m from Â£199.4m the year before.
The group took the strategic decision to accelerate the growth in its long-established homes businesses in central Scotland and north-west England through increased investment in new sites.
The disposal of non-core assets, including non-residential properties and the firm's historic shared equity portfolio, generated the cash to fund this increased investment. The losses on disposal led to an operating loss of Â£10.9m in the period.
Glenn Allison, chief executive of Stewart Milne Group, said: "Disposing of these assets allowed us to invest in ten new developments in the areas of our business where the housing market is strongest, namely central Scotland and north-west England.
"The strong sales performance that we have experienced on these developments since the year end has more than justified that investment. These businesses are therefore well-placed to take full advantage of the strong demand for new-build homes in these markets.
"With a strong order book for the current trading year and an increasing number of UK house builders using timber frame to benefit from the advantages it delivers, Stewart Milne Timber Systems, already a market leader, will continue to experience positive growth."
Last autumn, Stewart Milne Group secured a three-year, Â£185m banking facility with Bank of Scotland. The firm employs more than 800 people in Aberdeen, Edinburgh, Glasgow, Manchester and Oxford.