Ellon housebuilder Scotia Homes made job cuts as firm lost £2.5m

Ellon-headquartered Scotia Homes has suffered a £2.5 million pre-tax loss as the cost-of-living squeeze continued to takes its toll on trade in 2024.

Tough market conditions have left the housebuilder grappling with a 6% drop in turnover, dropping to £50.7 million for the year ending June 2024.

Chairman Gary Gerrard said it was a particularly challenging year for regional housebuilders like Scotia, especially in the north of Scotland.

He said: “In addition to the macro-economic and political uncertainty, Aberdeen and north-east Scotland were also impacted by the job losses and high taxation across the energy sector.”

Redundancies at Scotia Homes

To protect the business, Scotia Homes made a number of redundancies during the financial year.

The accounts show its workforce reduced from 196 to 181 staff during the period.

The company said this move helped slash operating expenses by over £500,000.

“It is always a difficult decision for the board to make redundancies and to lose hardworking colleagues,” said Mr Gerrard in his strategic report.

“But in light of falling revenues and ongoing cost pressures it was absolutely necessary to protect the long-term sustainability of the business.”

The £2.5m loss was due to an exceptional £3.9m impairment charge for historic landbank purchases and the impact of higher borrowing costs.

The firm’s operating profits rose to £3.4m for the year ended 30 June – up from £2.7m in 2023.

Optimism for new builds in 2025

Looking ahead, Mr Gerrard remains optimistic about a recovery in the new-build housing market.

This follows a reduction in short term interest rates and cost inflation easing.

With a strong pipeline of prime sites, including developments in Aviemore, Arbroath, and Kintore, Scotia Homes is ready to capitalize on any market rebound.

The acquisition of Caledonia Homes in 2022 is already paying off, with Scotia’s in-house timber kit facility now supporting nearly all of its sites, driving both cost savings and sustainability efforts.

The company’s new Park View development in Kintore is also generating strong customer interest, offering hope for a broader recovery.

“Let us hope that this can be sustained across the wider business and 2025 marks the start of the recovery in buyer confidence,” added Mr Gerrard.

Difficult market conditions

Joint managing director of Scotia Homes, Graham Reid, said the 2024 results demonstrate a resilient trading performance considering the difficult market conditions.

“Whilst our turnover levels reduced, our gross margin was supported by a land sale and promotional activities which bolstered our performance,” he said.

“With a reduction in the level of housebuilding activity, it was therefore necessary to realign our cost base to the sales rates being achieved.”

Scotia Homes has current and future developments in Aberdeen, Arbroath, Aviemore, Ballater, Blairgowrie, Brechin, Braemar, Ellon, Forfar, Inverness, Kincraig, Kintore, Laurencekirk, Nairn, Newmachar, Old Meldrum, Perth and Tarves.