Housebuilder Stewart Milne Group bullish after narrowing annual losses

Aberdeen-headquartered Stewart Milne Group has hailed the “strong recovery” represented by its latest annual results, with a jump in sales and narrowing of its pre-tax loss.

The firm turned over £306 million in the year ended October 31, 2021, a jump of £36m, while operating profit before exceptional items increased to £13.5m from £800,000.

Including net exceptional costs of £8.7m, down from £59.2m, the group racked up an overall loss of £8.1m, down from the £71.5m loss in the prior 12-month period, amid a challenging economic backdrop. It comes after the group last month said it was putting itself up for sale following the decision by its eponymous founder and main shareholder to retire.

Stewart Milne Group added that during the financial year, it completed a strategic review that included redesigning its entire homes range to meet the changing trends of buyers, helping drive up gross margins to 16 per cent from 13 per cent.

"These margins would have been substantially higher had it not been for the continuing challenges, as a result of the oil and gas downturn, in the North-east Scotland market and are, therefore, anticipated to rise as this market continues to pick up,” the group added.

The review included the decision to offload its timber systems business, with the sale to Fife's Donaldson Group, which concluded in December, seeing the Aberdonian company slash its borrowings and generate “considerable” profit that will be reflected in the next year’s accounts.

The organisation, which was founded in 1975, now says it has exceeded the targets in its business plan “with significant improvements in performance and a return to sustainable, profitable growth”.

A CGI image of the group's forthcoming Brackenhill Park development in Hamilton. Picture: contributed.

Chief executive Stuart MacGregor said: “Having delivered an exceptional and substantially improved performance and completed our strategic review, we have exceeded the targets we set ourselves in recovering from the protracted downturn in North-east Scotland and the impact of Covid across all our operations.

“Our streamlined approach, central to which was the new homes range, has enabled us to capitalise on the favourable market conditions over the past 18 months.”

Sustainable

He added that the group has overcome the “unprecedented” challenges in the supply chain, including the availability and rising costs of people and goods, and is “incredibly well-positioned for strong, sustainable and profitable growth”.

Stewart Milne Home’s turnover amounted to £209m, up from £193m the previous year, while unit numbers fell to 828 from 836. Turnover from Stewart Milne Timber Systems increased to £94m from £65m.

Also commenting was finance boss Fraser Park, who said: “Customer demand in both North-west England and Central Scotland has remained high, while we saw an upturn in both demand and pricing in North-east Scotland, following a five-year period of year-on-year sales price decline in the region.

"The market sentiment in this region is more positive than it has been since 2015 and we will continue to review opportunities here as the local economy strengthens.

“During the year, we invested in a number of new sites across all our regions and our current forward sales position is the strongest we have seen in many years. This, coupled with our improved competitiveness and financial position, signal supreme confidence in the future, sustainable and profitable growth of the business.”