Increased sales helps Elan to pay down debt
THE housebuilding firm which rose from the ashes of the collapse of North Wales developer David McLean delivered what directors described as a “credible” performance in 2010.
Ellesmere Port-based Elan Homes made a pre-tax profit of £308,000 (2009: £980,000 loss) as sales increased by 17% to £40.1m.
The firm also said that prudent cash management had allowed it to repay some of the bank borrowings incurred when completing a £51.3m buy-out of the business from David McLean Group’s administrators, Deloitte, in October 2008.
By its October 31 year end, Elan Homes had reduced its net debt by almost £7.5m to £27.1m.
The company was founded by four former David McLean directors – John Kendrick, Frank Reil, Andrew Bravington and Rob Flood – with a debt and equity package provided by Barclays in October 2008.
Since then it has progressed with bringing many of McLean’s former schemes to market. Earlier this month, it began offering tours of its Racecourse development in Chester city centre to prospective buyers as well as recently opening show apartments at the Gally Knight Estate development at Worksop in Nottinghamshire.
During 2010, it sold 281 new homes (2009: 246) for an average sale price of £143,000 (£139,000).
However, in notes accompanying the accounts directors warned that the difficulty buyers face in obtaining affordable mortgages continued to impact both valuations and sales. It has responded by offering shared equity on schemes, selling properties to housing associations and investors and offering part exchanges on buyers’ existing homes.
Despite this, however, the firm said that it expected “conditions faced by the housebuilding sector to remain very challenging in the medium term”.
“With systems in place to control site and overheads costs, as well as manage cash flow, the directors are of the view that the group is well-positioned to operate in these conditions with sales supported by focused marketing initiatives across various routes to market,” the company said.
