(Image: Cruden)
A long-established Scottish housebuilder delivering more than 800 homes for the Granton Waterfront regeneration project has more than doubled profits despite pressure from higher interest rates and challenges related to planning and public sector funding.
Cruden made a profit before tax and exceptional items of £6.1 million in the year ended March 31, up from £2.8m a year earlier.
Cruden said turnover, including its share of joint ventures, increased to £134m from £112m, while private home sales grew by more than 20% to 148. However, the average selling price dropped to £311,000 from £347,000, “reflecting the mix of homes sold and a greater proportion of value-focused family homes”.
Cruden is pursuing a strategy of progressively increasing private home sales while growing activity in affordable housing and exploring tenures such as build-to-rent. Although the housebuilding sector continues to feel pressures around mortgage affordability and planning constraints, the company said the “fundamental shortage of housing across Scotland continues to underpin long-term demand”.
Fraser Lynes, chief executive of Cruden, said: “These results demonstrate the progress we are making and, importantly, show that our strategy is translating into stronger financial and operational performance.
“We have been very deliberate about how we want to grow Cruden. We are increasing our private housebuilding activity while focusing our affordable housing business on land-led developments and genuine partnerships where our development expertise can add real value.
“We are now seeing the benefits of that approach through increased home sales, improved profitability and a strong pipeline that gives us visibility over the next phase of growth. There is still a great deal to deliver, but we have entered the new financial year with real momentum and a clear sense of direction.”
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Cruden, which can trace its roots back to 1943, currently has a development pipeline of around 3,500 homes. Current projects include The Village in Dalmarnock, Glasgow, where the company is building on its long-standing involvement in the area after delivering the Athletes' Village for the Glasgow 2014 Commonwealth Games.
It is building 67 two- and three-bedroom terraced homes as part of this latest phase.
Cruden is also working on new residential developments in Neukhaven Green, Pittenweem and Stonefield Brae, Neilston as it looks to build its regional presence.
Mr Lynes added: “Scotland needs significantly more homes across every tenure, and Cruden has both the capability and ambition to play an important part in delivering them.
“We have more than 80 years of heritage behind us, but our focus is firmly on what comes next. With a strong balance sheet, an increasingly diverse pipeline and a highly experienced team, we are well placed to build on our legacy while embracing our next stage of growth.
“The progress made this year gives us confidence, but our job now is execution, getting developments started, delivering for our customers and partners and continuing to build a strong and sustainable Cruden for the long term.”
Growth capital investor BGF acquired a minority stake in Cruden in November last year. Cruden noted that it was the first external investment in the company and marked a “significant endorsement of Cruden's growth ambitions, leadership strength and long-term vision for the future”.