The company had been trading in line with expectations prior to the pandemic
Tulloch Homes chief executive George Fraser has signalled hopes the company’s performance will return to pre-pandemic levels in its current financial year, after its latest results were hit by the fall-out from coronavirus.
New accounts show profits at the Highlands-based housebuilder dropped to £3.3 million for the year ended June 30, 2020, down from £8.8m the previous time, after construction activity and sales were derailed by the first national lockdown last March.
The company, which has been building its presence in the central belt in recent years, had been trading in line with expectations prior to the pandemic. But lockdown meant that it built between 50 and 60 fewer units than it had been forecasting.
The housebuilder sold 136 homes during the year, down from 211 in 2019, with turnover slipping to £32.2m from £51.1m.
However, the company said it is cautiously optimistic about the current year following the resumption of construction activity, with Mr Fraser declaring that there has been a surge in pent-up demand.
Mr Fraser said: We anticipated after the shutdown last year that things would be a lot quieter – in actual fact things have been very busy and very buoyant since then. We are all very pleased with the way the market has moved, given the negativity there could have been with the lockdown.
Housebuilding is built on confidence. People buy houses when they are confident, so the market has been very good since then, he said. This year our target is to get back to normal. We are in a good position to deliver pre-pandemic levels.
Tulloch’s results come in the same week as figures signalled a further acceleration in UK house prices. The Nationwide House Price Index, published on Tuesday, found that prices grew by 10.9 per cent in May compared with the same month last year. While the extension of the stamp duty holiday in England was cited as a factor, Nationwide said activity has also been driven by people reappraising what they want from their homes in light of the pandemic.
Mr Fraser said that prices have been moving forward, with growth in the region of 5% to 10%, adding that the market for second-hand homes was performing well. Quality houses are going for offers over home report, and that is always a good indicator that the market is strong.
He observed that people have spent more time in their homes in the last 12 months and have decided now is the time to move, explaining that the market in the north of Scotland benefits from the fact there is not a shortage of space when houses are being built. However, he said pricing was not in bubble territory just now.
Mr Fraser highlighted the shortage of raw materials as a challenge for the business, notably for cement products, and said the industry continues to face a general skills shortage, though not specifically because of Brexit.
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