Residential and commercial property developer CALA has seen a three per cent dip in annual pretax profit, but said it had raised margins and increased its landbank with the help of its Midland-based businesses.
The privately-owned group, which has a major office in Birmingham, said higher interest costs had added to the dip in pretax profit to #6.1 million in the 12 months to June 30, down from #6.3 million in 2005.
This was on group turnover, including joint ventured of #253.5 million, up over #28 million on the previous year.
CALA said this was driven by a greater volume of home sales at a higher average selling price of #255,000, up from #251,000 in 2005.
Profit before interest, tax and goodwill amortisation was #28 million, up from #27.7 million.
Including commercial property developer CALA Finance, the group said it sold 1,558 homes in 2006 compared with 1,340 in 2005.
Price increases and strong demand for prestigious locations had offset sales discounts and incentives, the group said, with margins in house sales rising 0.1 percentage points to 20.2 per cent
At the end of June 2006, CALA had a residential landbank of 8,107 plots with a turnover value of #2.2 billion. Of these, 3,880, worth #1.1 billion, had outline planning consent or better, representing three years of business for Homes, the group added.
Alan Brown, chairman of Homes (Midlands), said: "This was a resilient performance despite fairly difficult housing market conditions in the first half of the financial year, at a time when many in our sector experienced falls in margins and profits.
"The industry continued to discount and incentivise to maintain sales rates throughout the first half.
"A reduction in the base rate to 4.5 per cent in August 2005 assisted in restoring consumer confidence and this was translated into an increase in site visitor levels, improved sales volumes and reduced discounting in the second half."
Scottish-based CALA operates three of its divisions from Birmingham – premium housebuilder Homes (Midlands), residential development funding arm CALA Finance and commercial property developer CALA Properties. It said all three firms has contributed to the results.
CALA Homes (Midlands) achieved saw profit before interest and tax up 41 per cent, on turnover up 43 per cent. The business said it had sold out developments in Fradley near Lichfield and in Leamington Spa and achieved significant off plan sales at St Bernards Lawns, its landmark 63 home scheme in Solihull.
Planning permission has also been secured for a #30 million scheme of 167 one and two bed flats on Sherborne Street in Birmingham, CALA said.
Managing director of CALA Homes (Midlands) Darren Humphreys said: "We plan to continue to increase the rate of land acquisition and develop sites with a wider range of houses for owner occupiers, in order to more than double the company's turnover in the next three years."