The Aberdeen-headquartered group, which also runs an offsite timber systems business, is predicting “greatly-improved” trading and profits for the year ahead.
The impact of the pandemic, restructuring activities and a review of its land bank is said to have significantly impacted on the group’s trading to October 2020.
However, in the latter part of 2020, the Stewart Milne Homes housebuilding division saw a positive trading performance, with sales well ahead of last year across all its regions.
With reservations secured for more than 70 per cent of the new homes planned in 2021 and, following a major strategy review, the housebuilding business is now on track to boost profits this year.
Meanwhile, Stewart Milne Timber Systems is experiencing solid growth in the new year, with a strong current forward order book in excess of £200 million.
As well as updating on current trading, the group has lodged historic accounts for the period from 1 July 2018 to 30 October 2019, following a change to the financial year end.
Having delivered strong turnover and profit growth in 2017 and 2018, the figures for the year to October 2019 were adversely impacted by poor market conditions in the group’s home turf of the North-east and exceptional items of £43m, as a result of five years of downturn in the oil and gas market.
These exceptional items were largely due to a non-cash impairment charge to write stock down to market value for non-developed land, purchased prior to the 2008 global financial crisis, and for land under development in the North-east, acquired before 2015 and the oil and gas market downturn.
After the revaluation of assets, the group showed an operating loss, post exceptional items, of £36m for the year to October 2019.
Stuart MacGregor, chief executive of Stewart Milne Group, said: “The rapidly-rising demand for modern methods of construction, along with our focus on building high value, high growth, long term partnerships with our housebuilder customers provides us with confidence for the continued growth of the timber systems business as the market normalises.
“We’re also seeing record levels of sales demand for our homes with the strongest forward sales position in our history.
“There is unprecedented demand for quality, family homes in suburban and rural locations, where a strong sense of community and more space have become more of a priority. This is an extremely strong trend which plays very well to our traditional strengths.”
He added: “The major steps we’ve taken to improve profitability and competitiveness and bolster our position in the regions where we see the strongest demand and greatest growth potential, underline our confidence in the next five years.”
Finance director Fraser Park added: “These historic 2019 accounts and the Codid-impacted 2020 performance mark a transitional period for us, clearing the way for fundamental changes that are making us more competitive and more profitable.
“These include a review of our cost base, the introduction of an entire new housing range, an accelerated build strategy and greater efficiencies driven by adopting digitalisation.”