Fifth year of strong, rising profits at housebuilding group
Mixed-tenure housing specialist Strategic Team Group has bucked the trend in the construction sector, reporting a rise in profits for the fifth consecutive year.
Based in Castleford, but with an office in Dukinfield, the group delivered £2m EBITDA, representing a 3% return on sales of £63m.
It said 78% of revenue has been achieved on the back of negotiated deals and land-led developments, rather than open tenders.
Cash at bank stood at more than £2.5m as a result of strong operating cashflows.
The firm also achieved an end of year order book of £87m, with more than 90% of 2018/19 turnover already secured and a pipeline of land and plots at its highest ever level.
The company’s first open market sales site in Greater Manchester sold out off-plan, while it completed the 1,000th home through the its Land Inclusive Development model.
The firm has also won three contracts via Homes England’s DPP3 framework, worth in excess of £15m, and is due to commence its first modular offsite construction project.
Managing director Andrew Watson, said: “These strong results are testament to the strategy we embarked upon five years ago.
“Our business is built on the solid foundations of strong customer relationships and deep market knowledge.
“We have built more than 400 homes this year and will build in excess of 500 in 2018/19, which includes our first land-led site opportunity for an institutional PRS (private rented sector) developer, securing a place on their construction framework.”
He added: “Our continuing focus on quality of earnings, growing order book, pipeline of new mixed-tenure sites, and our ever-watchful eye on risk mitigation and management has provided our fifth year of strong rising profits and cashflows.
“In the current uncertain economic and political climate, all indicators suggest that investment in affordable housing, the shortage of supply, the need to unlock land, and a skills base shortage all point favourably to the dynamic, yet flexible strategy STG has adopted to deliver and expand its current housing output.
“We continue to build quality, cost-effective homes and communities in the North of England, where people are proud to live, and call ‘home’ and the board looks forward to another year of successes.”