Newland Homes has seen a dip in profits in 2018 from £9.3m to £6.6m but remains upbeat about the future.
The recently-published annual report of the Barnwood-based company says that 2017 was an ‘exceptional year’ which could not be repeated so that comparisons do not give the full picture.
The directors’ statement also says that turnover for the year ending December 31 2018 would have been greater ‘had it not been for the Brexit effect which dampened the market’ in the second half of the year.
Turnover was down from £60.9m in 2017 to £51.4m. Gross profit was down from £14.25m to £11.03m. Operating profit dipped from £12m to £8.8m. Pre-tax profit was down from £11.5m to £8.1m.
The strategic report by Managing Director David Foreman says: “The gross profit margin of 21.47%, operating profit margin of 17.22% and profit before taxation margin of 16% are all improvements on 2016 and we feel a credible performance given the market conditions.”
The company has invested significantly in Stocks (work in progress), increasing from £42.6m to £58.7m.
“An element of that Stock is completed houses which, in a stronger market would have been converted into turnover in 2018, but importantly, the Stock level has also been strengthened by the purchase of six excellent new development sites,” adds Mr Foreman.
“Providing the market retains some semblance of normality, we believe that our increased Stock level places us in an excellent position moving forward.
“We believe that we have continued to strengthen our brand and position in the market through 2018. We have continued our improvements of employment conditions with the introduction of a private medical scheme and enjoyed the ability to recruit good quality staff while maintaining a very high level of staff retention.”
The report bemoans the ‘excessive time taken to get a planning permission’, as well as frustrating delays in obtaining technical approvals before development can begin.
At the same time, there are many pluses. “Through our well-established land buying process we continue to be able to source high-quality development land at economically viable prices as we continue to resist the temptation to buy land at higher prices simply because it is available,” says the report.