£12m loss for Morris Homes
HOUSEBUILDER Morris Homes fell deep into the red in its last financial year, despite cutting a quarter of its workforce and paring down from five to three regional divisions.
The privately-owned Wilmslow company cut staff numbers by more than 100 to 277 and reduced its five reporting regions to just three for the Northern, Western and Eastern regions.
Exceptional charge of £5.4m, relating to the group restructuring (£1.2m) and the revaluation of its assets (£4.2m), took operating profit down to £15.7m, according to accounts for holding company Morris Group, which cover the year to the end of March 2009.
The directors’ report said: “The group successfully restructured during the period to a size that both enables delivery of current market demand and also gives the business the ability to react quickly to market improvements.”
Turnover was down 31% to £112m on the previous year (2008: £163m) with a pre-tax loss of £11.8m, after exceptional costs of £19m, compared with the £17.2m profit made in 2008.
The report added: “Restriction of availability of finance for buyers, in addition to reduced consumer confidence, severely impacted sales activity and the volume of housing transactions cross the UK.”
However, the company said it had benefitted from the government’s Home Buy Direct scheme and Great Start scheme, as well as part exchange incentives.
The group completed 651 properties in the year, down from 930 in the prior year which it said was down to the “underlying conditions” in the housing market.
Net debt increased around £6.4m to £228.2m.
Since the year end Morris Homes has seen “tangible improvements” in the market.
Last month the company reported a jump in orders and a £27m investment in its land bank. It added that private reservations in the nine months to December 31 had risen 43%.
Morris has also re-opened seven mothballed sites during the period and a further six sites are expected to open before the end of March this year, bringing its total number of outlets back to in excess of 50 for the first time in three years.
