Scottish premium housebuilding group Cala remains on track to more than double the size of its business in three years after a surge in property market activity.
The Edinburgh-headquartered firm, acquired by Patron Capital Partners and Legal & General last spring, yesterday said it is seeing a wave of new prospective housebuyers coming to the market as the UK’s economic recovery strengthens.
The industry has reported a significant improvement in trading in recent months, with the Government-backed Help to Buy scheme cited by a number of firms as being at least partly responsible for an upturn in the fortunes.
However, Cala’s premium market positioning has meant the scheme has had little impact on its bottom line.
Chief executive Alan Brown said the upturn for Cala reflected in a better-than-expected increase in private sales and a 16% growth in the value of its land bank in the seven months to January 31 resulted from increased spending confidence among the firm’s target audience of middle- to high-income earners.
“We have been in recession since 2008, in effect, and it was probably only in September of last year that things started to look more positive,” Mr Brown said.
“That is five years of people being ultra careful about how they spend their money, and all of a sudden things turn around,” he added.
The company’s central focus in the short-term is on delivering improved performance in its south of England based development portfolio, where demand for new housing has grown particularly strongly since the economic recovery kicked in.
The firm, which saw pre-tax profits rise by more than a third to £12.5 million in the year to June, has set up two new north and south Home Counties divisions in order to achieve it goals.
However, Mr Brown said Cala remained committed to expanding its Scottish-based operations.
He said the firm had also created a separate division focused on Aberdeen, a market which continues to be inflated by the effects of the oil and gas sector in the north east, and had strong growth expectations for its other regional Scottish hubs.
The company also retains an option on about 850 plots at Kirkcaldy as part of a wider housing development in the area.
In response to the upturn in activity, Cala has significantly increased its workforce to around 400 a figure that excludes approximately 1,000 third-party contractors employed across the firm’s development sites and further recruitment is in the pipeline as the company works towards its goal of more than doubling in size by 2017.
“We have increased (the workforce) by about 15% in the past six months,” said Mr Brown.
“We are seeing strong current trading and are putting the building blocks in place for future growth.
“If we increase the business in size by two-and-a-half times then there will also be a reasonable increase in jobs.”