Highland-focused Tulloch Homes Group optimistic after drop in annual profits

Tulloch Homes Group has today unveiled a seven-figure profit for the year ended June 30, 2020, attributing the large year-on-year drop to the onset of the coronavirus pandemic.

However, the private housebuilder added that since the period ended, activity returned to all of its sites and buyer interest has been strong.

It reported a pre-tax profit of £3.3 million for the year, saying the “substantial” reduction from £8.8m in 2019 “is explained fully by the Covid-19 lockdown's impact on housebuilding construction and sales”. Turnover retreated to £32.2m from £51.1m in the prior 12 months.

Tulloch’s main area of operation is the Highland region with a primary focus on the city of Inverness where it is based. It currently has 1,217 units with planning consent, down from 1,320 last year, with a further 474 contracted in the Highlands. In the last year it has sold 136 homes, down from the 2019 total of 211, and said this metric was dragged by the effects of the pandemic.

Chief executive George Fraser deems the year to June 30, 2020, an 'incredibly challenging' period. Picture: Ewen Weatherspoon.

At the end of June 2020 the group had net assets of £63.5m, up from £60.2m, and a net cash balance of £32.5m, increased from £21m.

Chief executive George Fraser said: "The year ended June 30, 2020, was an incredibly challenging period for everyone with the impact of Covid-19 felt globally. For Tulloch Homes Group in the period up to the point where the country entered lockdown on March 23, we had been trading in line with expectations and it was anticipated financial targets would be met for the year.

"There was little activity from lockdown to the year end as a result of restrictions placed on all UK businesses by both governments in response to the pandemic. The year ended June 30, 2020, was therefore a very truncated period, and this is reflected clearly in our results."

Robust

"However post-year end, construction activity returned to all of our sites and buyer interest has been robust. On a cautious note, it is too early to forecast if this recovery will be sustained, but there has undoubtedly been a surge in pent-up demand.

"We continue to require the acquisition of land as the raw material and precursor to the development and sale of private housing, and that is an ongoing process.

"We're proud to be a company that contributes to local prosperity, employing 152 people mainly in the Highlands, and supporting around 600 jobs when our regular sub-contractors are taken into account. We feel there is responsibility on us, in the circumstances of the pandemic, to provide work and retain jobs."

Tulloch in 2015 revealed a management buyout – led in part by Mr Fraser – from its owners investment bank Goldman Sachs and private equity giant TPG, and backed by a £30m funding package from Bank of Scotland.

In October last year it hailed a £70m investment after getting the green light for more than 260 homes. It said the 155-home development at Druid Temple, Inverness, and the 112 properties planned at Knockomie, Forres, would create and safeguard jobs and boost hard-hit suppliers.

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