CALA Group (Holdings) Limited Results for the Financial Year Ended 30 June 2015
Record revenues and profit growth; revenue target of £1bn within five years
CALA Group (Holdings) Limited ("CALA", "CALA Group" or "the Group"), the UK's most upmarket major home builder, today announces its financial results for the year ended 30 June 2015.
|Year ended 30 June 2015||Year ended 30 June 2014|
|Total group revenue||£511.6m||£285.4m||+79%|
|Profit before tax(*)||£50.9m||£26.8m||+90%|
|House sales gross margin||23.4%||22.8%||+60bps|
|Return on capital employed||18.4%||14.9%||+350bps|
(*) Before exceptional items and revaluation of financial instruments
- First full year of new strategy has resulted in record volumes, up 34% to 993 home completions, as part of the Group's broader aim to reach operational efficiency by 2018 and deliver revenue of c£1bn within five years
Revenue growth up 79% to a record £511.6m (2014: £285.4m) driven by an increase in both home completions and our highest ever private average selling price ("ASP") of £509,000 (2014: £423,000)
- Record profit before tax up 90% to £50.9m from organic and acquisition growth strategy
- House sales gross margin increased to 23.4%, a record for the Group, despite backdrop of high growth delivery and efforts relating to Banner integration
- Return on capital employed ("ROCE") increased to 18.4% (2014: 14.9%); set to exceed the Group's target of 20% in 2016
- Exceeded land buying targets while beating margin hurdles and maintaining quality of location
- Owned and contracted landbank up 12% to 14,236 plots (2014: 12,690) with a potential gross development value ("GDV") approaching £5.2bn, up 11% versus 2014 (£4.7bn) with a total ASP of £365,000 (2014: £370,000)
- 1,806 new strategic plots contracted during the year, taking the Group's longer term strategic landbank to over 11,000 plots
- Group has raised its land buying margin hurdle by 1%, with effect from 1 July 2015
- Particular focus on Southern England to drive future growth
- Net bank debt fell to £117.8m (2014: £141.6m) resulting in a reduction in gearing to 32.4% at 30 June 2015
- Crowned Scottish Housebuilder of The Year 2015 at Scottish Home Awards and awarded silver for the UK's "Best Medium Housebuilder" by What House?
- Retained 5 star customer service rating from Home Builders Federation for 6th year running
Commenting on the results, Alan Brown, Chief Executive of CALA Group, said: "This has been another outstanding year for CALA and the first full year of our new strategy, during which we have built on the strong momentum generated by the Group last year and recorded exceptional growth across all of our key metrics, delivering record revenues and profits, and improving return on capital employed whilst maintaining our clear focus on the premium segment of the home building market and our commitment to customer service. We are now operating from around 90 sites in eight regions around the country and are benefitting from this significantly increased presence, particularly in Southern England. This growth trajectory has led to us continuing our recruitment programme apace, welcoming 169 new members of staff to the business and stepping up our apprenticeship and graduate recruitment initiatives across the Group.
"Our focus now is on driving operational efficiency improvements throughout the Group which will in turn flow through to improved operating margins and return on capital employed as we target Group revenues of £1 billion within the next five years through the delivery of high quality, well designed, sustainable homes and communities in prime locations across the UK."
CALA Group - Results for the Financial Year Ended 30 June 2015
Following the record results delivered last year, CALA has reported another 12 months of exceptional record performance across all key financial metrics, with 79% growth in revenues to £511.6m driven by a 34% increase in home completions (2015: 993 v 2014: 743) and CALA's highest ever private average selling price ("ASP") of £509,000 (2014: £423,000). Subsequently, profit before tax, exceptional items and revaluation of financial instruments grew by 90% to £50.9m, which includes the first full year of contribution from Banner Homes (acquired in March 2014).
Despite the Group's high level of growth during the period and the successful integration of Banner, house sales gross margin (excluding the impact of exceptional items) increased to a record 23.4% (2014: 22.8%).
The Group increased its average number of active selling sites per week to 37 (2014: 29), and secured home completions from a much increased total of 82 sites (2014: 56). These increases were partly due to the full year inclusion of Banner alongside the first meaningful contribution from CALA's organic growth plans. The Group completed 49 sites during the 12 month period and delivered its first home completions on 44 new sites across the business as the Group transitions to building larger developments.
Strong site performance has resulted in an increase in operating margin to 14.3% (2014: 13.6%) although this still reflects the fact that CALA has yet to achieve operating efficiency given that the current level of investment to extend the Group's regional activity is running ahead of volume delivery. Despite this significant investment in CALA's growth plans, the Group's ROCE has risen to 18.4% for the year ended 30 June 2015 (2014: 14.9%) and is set to exceed the Group's target of 20% next year, thanks to CALA's capital efficient business model. During 2016, the Group expects operational efficiency to continue to improve and, as a consequence, CALA anticipates delivering an operating margin more in line with the listed peer group and ROCE of over 20%.
Net private reservations were up 8% on the previous year, driven by a greater number of sales outlets with a flat cancellation rate year on year of 16%. At 1 July 2015 the Group had accumulated 206 advance private home sales with a turnover value of £106.5m (2014: 367 units and £166.2m) for delivery by 30 June 2016. This carry forward position is lower than last year due to a combination of fewer sites continuing into the new financial year and a large number of new sites delivering completions in 2016 not yet open for sale.
Sales per site per week equated to 0.40 (2014: 0.48