A Perth housebuilder has recorded losses of more than £2 million, while turnover also fell.
A&J Stephen finance director John Webster said the firm was “significantly” impacted by Covid-19.
Mr Webster said sales had been “strong” since reopening in June 2020.
In his report, published alongside the firm’s accounts for the year to March 2021, he said: “Despite these most pressing of circumstances, turnover was maintained at a similar level to the previous year at £15m.
“Notwithstanding this achievement, the economic impact of the pandemic on our market meant we had to impair the carrying value of stock and work in progress.
“As a result, the group returned a pre-tax loss of £2.3m.”
Revenue down for Perth’s A&J Stephen
The firm’s revenue for the period was £14.9m, down from £15.5m in 2020.
Its pre-tax loss increased from £625,000 in 2020 to £2.3m.
Mr Webster said the group does, though, continue to operate from a position of strength, with total equity in excess of £20m.
He said that despite the challenges of the financial year in review, the firm has been pleased with the level of interest.
It expects to record a profit for this financial year.
Mr Webster said: “Interest from potential customers in our homes remains strong.
“Sales has outstripped expectations since the end of lockdown and the housing market continues to be buoyant.”
He said A&J Stephens has sold out of the first 42-home phase of its Mansfield Park development in Scone.
Interest exceeding demand in homes
The firm also has developments in Glenfarg, Inverness and Guildtown, north of Perth.
Interest in those developments has also exceeded expectations, Mr Webster said.
He added the current demand for homes has led to rising material costs and supply chain problems.
Staff numbers remained at 71, with 41 in production roles and 30 working in administration and support.
Mr Webster praised the firm’s staff for their efforts through the pandemic.
He said: “The core of any business is its people and the board would like to thank every one of our staff for their dedication over the last year.
“All staff have had to adapt to new ways of working.
“Covid is likely to be with us for some time to come but the commitment and flexibility demonstrated this year gives us heart.
“Our teams will continue to adapt and provide business continuity whatever challenges the pandemic presents us with.”
Financial predictions revised down
The finance director added: “The current level of demand for new homes is putting significant pressure on the supply chain.
“We are currently experiencing unprecedented price increases and material shortages with some key construction materials doubling in price.
“Many construction materials are on extended lead times.
“The widely reported skills shortage in the industry has also come home to bite with shortages experienced across all trades.
“The pressure on the supply chain is extending our development programmes and impacting on our margins.”
In light of these issues, Mr Webster said financial predictions for the year to March 2022 have been revised down.
“Our latest projections still anticipate the group returning to profitability,” he said.