Lloyds-backed Cala Group builds recovery on higher house prices

Marion Dakers
HOUSE builder Cala Group said today its sales and prices have both soared in the last year, despite tough conditions in the property market.

Edinburgh-based Cala said sale completions rose 35 per cent to 875 in the year to the end of June, and the firm has already secured forward sales of 160 homes for the coming year.

The group said in a trading update that it was successfully cutting its debt pile, with net debt down from £116m last year to £105m at the end of June.

The group is controlled by Lloyds Banking Group, which took a 32 per cent stake in a debt-for-equity swap in early 2010.

The private average selling price of a Cala home increased 3.4 per cent to £339,000 in the year as the company focused on producing higher-margin properties.

Cala’s gross margin rose to 16 per cent in the year, up from 14.8 per cent in 2011, leading to what the firm said will be “a very significant improvement in operating profitability” in its full-year results, due to be released later in the year.

“Despite what continue to be very challenging market conditions, the high quality of our homes, selection of prime locations and focus on being the industry leader in customer service have again assisted us in exceeding our sales and profits targets for the year,” said Alan Brown, chief executive of Cala.

The Scotland-focused group also boosted its land bank last year, and now has over 9,000 plots, enough for eight and a half years of output.

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