Profit slumps 75% at L&G-owned Cala

Cala Homes has seen its pre-tax profit slump by almost 75%, ending seven successive years of growth.

In its financial statement for the year to 31 December 2020, the Legal & General-owned house builder, reported a pre-tax profit of £24.4 million, down from the £96.2m posted in 2019.

Turnover also fell from £1bn in 2019 to £713m last year as its number of new homes sold dropped by 25% to 1,835.

The firm said the reduction in profit was “almost entirely due to the impact of site closures and period of inactivity resulting form the covid-19 shutdown”.

The company, which was 100% acquired by L&G in September 2019, suspended its land-buying activity in March last year due to the pandemic, but resumed buying sites on a selective basis towards the end of 2020.

As a result, the number of new plots contracted fell from 2,267 to 698 year-on-year, with the gross development value of new sites contracted falling from £884m to £218m. It closed 16 new sites but recommenced work on 15 sites which are expected to deliver 1,835 new homes.

The company’s consented landbank fell in value from £7.1 billion to £6.7 billion due to a decrease in the average selling price from £352,000 to £388,000.

However, the company’s forward sales improved to 59% of homes reserved.

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Kevin Whitaker, chief executive of Cala, said: “We have seen that the housing market has recovered strongly in the second half of 2020, and this is shown in our excellent forward sales position.

“Average weekly reservation rates so far in 2021 are encouraging and in the first seven weeks we have traded at rate of 0.72 weekly sales per development, with 346 net private reservations taken. This rate is exactly the same as the equivalent period in 2020.”