Cross-Border raid planned by Milne in bid to raise sales figures

The Aberdeen-based firm reported a “marginal” improvement in profits for the year to 30 June despite both house sales and turnover being lower than in the previous 12 months.

Glenn Allison, the firm’s managing director, expects a better performance in terms of sales, turnover and profit in 2012. But he believes the wider housing market will see little improvement over the next two years.

“We are three or four years on from the credit crunch, we understand the marketplace. It is not dramatically going to improve,” Allison said. “We expect it to remain pretty much as it is currently. But we have a very strong balance sheet and very good management teams.

“We expect to perform better in our housing business this year than last year in term of unit numbers, turnover and profit.”

Much of the firm’s hopes of an increase in its fortunes rests on the introduction of a product aimed at first-time buyers.

The “X Range” features one- and two-bedroom mews homes with prices starting at £87,995. The first of such developments was launched in Aberdeen, where prices started at £139,995, while the firm will next week open sales of the first-time buyer homes in Crieff and in Errol, between Perth and Dundee.

Sales dropped from 550 homes last year to 530 this year. The firm said that 40 to 50 per cent of homes sold were on a part-exchange basis, which involves it finding buyers for potential customers, adding to the cost of sales. The company has also been offering incentives such as deferred payment and financial advice to buyers.

Stewart Milne, the eponymous company’s chairman and chief executive, said: “The reality is we are funding a lot of these costs and that is reflected in the level of profits we are making. People are getting probably greater value for money because they are being supported in lots of different ways.”

Last year, the group agreed a new three-year debt facility. While its debt has been reduced by £100m over the past three years, Allison confirmed net debt at the end of June was £246m.

Turnover in the year to 30 June decreased to £239.4m against £251m 2010 – still a long way from the peak of the market in 2007-8 when the company’s turnover was £420.4m. Pre-tax profit for the year was £406,000 compared to £140,000 in the previous 12 months.

Revenues from the firm’s Oxford-based timber frame business rose slightly from £53.8m to £57.1m while turnover from its construction arm rose from £22.3m to £30.1m.

Sales at its development division dived from £36m to £4.1m, although it said securing planning consent on the Triple Kirks project, a derelict Aberdeen church set to become offices, will “play a major part in its success in the future”.