ESPC stages turnaround as job cuts drive return to black after four years

THE Edinburgh Solicitors' Property Centre (ESPC) has swung back into the black after cutting staff numbers from 150 to 60 over the past two years, bringing four years of losses to an end.

The centre - which markets about 75 per cent of the houses for sale in the Lothians - posted a pre-tax profit of 640,000 in the year to 31 May.

That compares with a deficit of 1.8 million in the previous 12 months after the ESPC wrote off more than 637,000 from its investment in MoveMachine, its subsidiary that produces home reports. It had initially fallen into the red in 2006 with a loss of 324,000.

Chief executive Malcolm Cannon, who took over last October, said the turnaround in the centre's fortunes had come after it abandoned its diversification policy to concentrate on its core Edinburgh market. The firm is owned by its 199 solicitor members,

Turnover jumped by nearly 55 per cent to 14.7m following an improvement in activity in the local housing market.

Cannon said staff, premises and supplier costs had been cut to such an extent that the ESPC should now save around 1m a year and will pay off its debts during 2012.

He said funding arrangements had been renewed with Bank of Scotland.

The previous set of accounts - for the year to 31 May, 2009 - had been delayed while the centre negotiated its 1.5m finance deal with the lender.

Those talks were concluded in July, with the borrowing being secured against the centre's assets and guarantees being made by its member firms.

"Conditions in the economy both in Britain and abroad are going to remain tough, but the savings we've made have put us in a strong position to consolidate and grow," Cannon added.

"The market has improved somewhat recently, but I don't think we will ever get back to the levels seen in 2006-7."

His comments came a day after law firm Warners, one of the biggest property-selling members of the ESPC, warned that house prices in Edinburgh may not rise again until the middle of the decade.

The firm warned that problems caused by a lack of mortgage finance and a glut of properties on the market would worsen following public sector cutbacks and job losses.

In May, Scotland on Sunday revealed that ESPC planned to revamp its core website, which receives around 180,000 unique visitors each month. Cannon yesterday said the website would be launched next year.