Elan sells fewer homes but makes more money
HOUSEBUILDER Elan Homes has said that it expects market conditions in the sector “to remain very challenging in the medium term” after reporting an 11% drop in sales in 2011 to £35.7m (2010: £40.1m).
Newly-filed accounts for the Ellesmere Port-based company show that it managed to quadruple pre-tax profits in the year to October 30, however, from £308,000 to £1.2m.
Elan Homes managed to increase the average sale price of its homes £161,000 (2010: £143,000) and operating margins increased to 5.5% (3%). However, the number of homes sold fell to 221 (2010: 281).
Company secretary Adrian Bravington said: “The housing market continues to face very challenging conditions with mortgage availability, the requirement for customer deposits to secure mortgages, mortgage affordability as well as downward valuations having an impact on sales.
He added that Elan Homes had responded by continuing to promote its own shared equity scheme, targeting investors and housing associations to buy apartments and making use of a “successful” part exchange offer. The firm also gained approval for the Government’s First Direct scheme aimed at luring buyers to new-build homes through the offer of cheaper mortgages.
He also said that a “tight control over site and overhead costs” had also allowed it to spend £13m on new sites – including £9.8m on land and alartments at the Erie Basin site in Salford Quays initially developed by Millennium Estates – but keep net debt fairly stable at £28m (£27.1m).
Elan Homes was set up in 2008 when four former members of Flintshire-based David McLean Group bought its housebuilding arm out of administration. Three of these – John Kendrick, Adrian Bravington and Rob Flood – remain as directors and shareholders in the business.
The company builds properties in the North West, Wales, the South West and the West Midlands.
