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Cala on track to nearly treble its turnover, boss says

Aberdeen housebuilder Cala Group sold in £1.3 billion deal
Aberdeen housebuilder Cala Group sold in £1.3 billion deal

Scottish housebuilder Cala Group now expects to nearly treble its turnover within three year, its boss told the Press and Journal.

Chief executive Alan Brown also said Cala’s profits soared to a new record as average house price shot up by 24% to £415,000 during the year to June 30.

Forward private sales at the end of the period were worth £166million, more than double the total of a year earlier and 34% of the budgeted revenue for the full financial year.

Mr Brown said the company, which has its roots in Aberdeen but is now headquartered in Edinburgh, was prospering on the back of the UK’s economic recovery.

He added: “I am pretty confident our current market growth is at least going to be maintained.

“It has been stable or positive since January 2013.”

Cala will not announce its 2013/14 results until the autumn, so gave no profit or turnover figures in yesterday’s trading update.

But it reported a “significant increase” to last year’s record profits, driven by an improvement in housebuilding gross margins to 23%, from 18.8% previously.

Pre-tax profits in 2012/13 totalled £12.5million, generated from revenue of £240.8million.

Mr Brown said the year just gone was “brilliant and transformational”, with Cala having expanded its presence in the lucrative south-east England housing market with the acquisition of Banner Homes in a deal thought to be worth £200million.

He added: “We enter the new financial year in a very strong position.

“In October 2013, we announced plans to double the size of the business through organic growth by 2017.

“But, with the Banner integration significantly advanced and the group delivering well against our stated strategy, we are now confident we can almost treble in size, significantly ahead of our targets, in just two years.

“Overall, I am very pleased with how Cala has performed over the past year and am confident about the ability of the enlarged business to build on this momentum going forward.

“The wider recovery in the housing market, which properly took hold during the second quarter of 2013, has continued strongly into this financial year with increased access to mortgage finance and a more encouraging outlook for the UK economy translating into improved buyer confidence.

“Combined with a relatively tight housing supply, this has served to drive higher sales prices which Cala is now seeing in all of its operating regions, albeit at sustainable levels.”

Cala targets relatively affluent areas of the UK such as the Home Counties and the Cotswolds plus parts of Aberdeen, Edinburgh and Glasgow.

Earlier this year, it said its new homes in Aberdeen were selling for more than £500,000 on average as the north-east’s oil and gas-fuelled economic growth continued to push up property prices.

Cala stands for City of Aberdeen Land Association and was founded in the north-east in 1875.

It diversified from land-management business into housing in the mid-1970s, relocating to Edinburgh in 1978.