The “significant” financial impact of a major Scone development being delayed has been revealed by housebuilder A&J Stephen.
The Perth family firm said its financial forecasts had to be revised as Covid-19 lockdowns led to delays in its projects.
Among the developments hit was Mansfield Park in Scone, which will have 42 homes in its first phase.
Stephen also has developments in Glenfarg, Inverness and Guildtown, six miles north of Perth.
Loss-making year for builder
Finance director John Webster said: “The commencement of our new developments at Scone and Guildtown were delayed by the Covid-19 shutdown.
“On a positive note, the residential market remains strong and our order book is very healthy.
“Our new developments have been well received with sales at Mansfield Park in Scone particularly strong.”
The construction company recorded a leap in turnover by almost £5 million in newly filed accounts.
The accounts for the year ending March 31 2020 show sales of £15.5 million but a pre-tax loss of £625,000.
This compares to revenue of £10.6m and a pre-tax loss of £2.2m in 2019.
Hopes to return to profit
Mr Webster said the firm “lacked the volume necessary” to return to profitability in 2020.
“We made good progress in growing the turnover and improving our margin,” he said.
“We still lacked the volume necessary to return the group to profitability.
“The board is confident that the business will return to a sustainable level of operations and return to profitability in the year to March 2022.”
The company said the pandemic had a “significant” impact on the business, operationally and financially.
It had expected to return to profit in 2021 before Covid-19 hit.
Strong finances
The company said despite the delays to its projects, its business plan was sound and it had the full support of the bank.
At the financial year end the company had equity of £22.6m, no borrowings and more than £3m in cash.
Mr Webster added: “The board recognise the exceptional response to our staff, subcontractors and suppliers who have embraced the new working practices under Covid-19 and supported the business at this challenging time.”
Stephen was established in 1935 and has around 70 staff. It has continued to move forward on other projects in the last year.
Last July it secured planning permission for 55 homes in Cupar. It has also acquired land for the next phase of its Inverness development and has plans for Pitlochry.
Mansfield Park in Scone could ultimately become a 700 home development. Plans for the second phase – with 58 homes – have been submitted to Perth & Kinross Council.
