CALA Group (Holdings) Limited: Results for the financial year ended 30 June 2016
Fourth consecutive year of record revenues and profit; growth strategy and operational efficiency targets remain on track.
CALA Group (Holdings) Limited (“CALA”, “CALA Group” or “the Group”), the UK’s most upmarket major home builder, today
announces its financial results for the year ended 30 June 2016.
30 June 2016
30 June 2015
|Profit Before Tax*||£60.1m||£50.9m||+18%|
|Total home completions||1,151||993||+16%|
|Average Selling Price (ASP)||£538,000||£509,000||+6%|
|Return on Capital Employed||18.6%||18.4%||+20bps|
* Before exceptional items and revaluation of financial instruments
- Strong increase in the Group’s owned and contracted land bank
- 84% of the contracted landbank (GDV of £4.7bn) now has planning consent or adopted in a local plan
- 30 new sites contracted during the year, projected to deliver 2,683 homes with an estimated GDV of £1.0bn
- Continued focus on Southern England to drive future growth, with 57% of new sites contracted over the year in the region
- Total group headcount up 13% to 810 as part of the Group’s growth plans
- Establishment of a standard specification and extension of group procurement activity
- Introduction of new, ‘Light & Space’ house type range to enhance customer experience and drive efficiency
- Significant award wins during the course of the year recognising the Group’s ongoing development;
- Crowned ‘Large Business of the Year’ at the prestigious Scottish Business Awards
- Retained 5‐star customer service rating from Home Builders Federation for seventh year running
- Large Housebuilder of the Year at the Scottish Home Awards for the second year running
- Manjit Wolstenholme appointed as Non‐Executive Chairman
Commenting on the results, Alan Brown, Chief Executive of CALA Group, said: “2016 has been another record year with profits topping £60m for the first time in the Group’s history. Despite headwinds in some of our markets, we have continued to build on the strong momentum we have generated over recent years, once again delivering robust volume and revenue growth while still achieving incremental improvements in our return on capital employed.
“Our growth strategy remains to focus on driving operational efficiency improvements throughout the Group as we continue scaling up our divisions. Alongside this, we continue to invest in building the size and capability of our teams, welcoming almost 100 additional members of staff to the business including our ongoing increase of apprenticeship and graduate recruitment initiatives across the Group.
“In the 13 weeks since the EU referendum result, and although still early days, the Group saw positive trading with total enquiry levels and reservation rates up 9% and 46% respectively while website users have also risen by 32% on the equivalent period last year. Sales prices have also remained stable while cancellation rates have actually reduced slightly.
“Overall, we remain on course to deliver an annual capacity of 2,000 to 2,500 units within the next four years through delivering premium quality, well designed homes and communities in prime locations across the UK.”
For further information please contact:
Andrew Jaques, Giles Robinson, Charlie Barker
Tel: +44 (0)20 3128 8710
CALA Group ‐ Results for the Financial Year Ended 30 June 2016
CALA has delivered record profits and revenues for the fourth year in a row, driven by a strong increase (+16%) in total home completions (2016: 1151 v 2015: 993) and a 6% increase in the Group’s private average selling price (“ASP”) to £538,000 (2015: £509,000) due to change in product mix.
During the financial year, the Group increased its average number of active selling sites per week to 45 (2015: 37) despite a modest fall in the total number of sites from which private sales completions were secured to 80 (2015: 82), due to a lower number of smaller sites with higher value homes. CALA continues to transition away from operating from smaller sites towards focusing on larger developments as the Group continues to scale up the size of the business. This was evidenced by the average number of private homes per site increasing threefold to 54 on the 31 new sites on which construction commenced during the financial year (2015: 42 new sites with an average of 18 private homes). The Group completed 31 sites during the period and the first sales completions were delivered on 48 new sites across CALA’s eight operating regions (five in England and three in Scotland) (2015: 44 new sites delivered first sales completions).
Sales performance during the year was outstanding with net private reservations up 45% on 2015, driven by a greater number of sales outlets with a broadly flat cancellation rate (2016: 17% versus 2015: 16%). At 1 July 2016 the Group had accumulated 303 advance private home sales with a turnover value of £160.0m (2015: 206 units and £106.5m) for delivery by 30 June 2017. This equates to a sales carry forward of 30% (2015: 22%) based on the number of home completions during the current financial year.
Sales per site per week rose 20% to 0.48 (2015: 0.40), with minimal support from Help To Buy (12% of CALA’s private completions in 2016 versus 9% in 2015). This equated to a sector leading average private revenue per site per week of £254,000, up 18% on the previous year (2015: £216,000), which is a far more meaningful metric of CALA’s sales performance given the size of the group’s ASP relative to that of its larger peers.
The Group also continued to make progress in 2016 towards reaching operational efficiency, despite adverse headwinds in selected markets, as discussed below. CALA’s operating margin was maintained at last year’s record 14.3% (2015: 14.3%), with good progress made in reducing the ratio of net operating expenses to revenue, which fell from 7.9% last year to 6.8% in 2016.
These operational improvements were achieved despite housing gross margin falling to 21.8% from last year’s level of 23.5%. This fall was due to challenging market conditions in Aberdeen, where prices continued to fall followi