Cala reports turnover and profit growth in 2022

Housebuilder Cala Group has said it expects to see sharp increases in turnover and profit for results for calendar year 2022 when it reports results in March.

Issuing an unaudited trading update for the year, the firm said that turnover rose by 9% to £1.36bn, delivering a pre-tax profit of £169m, up 27% on 2021 numbers.

The housebuilder, which is owned by insurance giant L&G and operates in Scotland and the South of England, said it managed 3,027 home completions in the year, up 4% on 2021.

However, the firm said that reservation rates fell sharply in the final quarter of the year, making sales per site per week at 0.62 across the year as a whole, compared to 0.76 in 2021. The firm added that its forward sales position had also weakened, with 751 homes forward sold for the current financial year, compared to 994 homes at the same point in the previous year – a drop of nearly a quarter.

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Cala, the 10^th biggest UK housebuilder by turnover according to Housing Today’s annual rankings, said in a statement that this “reflects a reduction in sales rate during the final quarter of the year, when changes in the mortgage market, triggered by the UK Government’s mini budget, began to affect buyer confidence.”

The statement contrasts with the interim trading update issued by the firm last July, when it hailed a “very strong performance” ahead of management expectations.

Kevin Whitaker, CEO at Cala Group (pictured left), said the business delivered an excellent performance across 2022, but that “the impact of the UK Government’s mini budget on the financial markets directly influenced buyer confidence” in the final quarter.

He said: “This has naturally affected sales rates in recent months and has impacted the strength of our forward sales position.

He added that 2023 will be “challenging for everyone”, due to higher living costs and mortgage repayments, but that Cala was “well-placed to navigate the changing market conditions”.

Cala’s update follow’s trading statements by a number of other major housebuilders last week, in which Barratt, Persimmon, Taylor Wimpey and Gleeson laid out the extent of the impact of the mini budget on buyer demand. Taylor Wimpey said it had started a consultation with staff over £20m in job cuts, Barratt said it had paused hiring and Persimmon said it had paused 30 site openings.