Essex housebuilder’s 2021 accounts say supply chain squeeze caused construction delays
Essex-based housebuilder Weston Homes has seen profit and turnover grow in the year to July as it staged a partial recovery from its covid-hit 2020 accounts.
The regional builder said turnover rose by a fifth to £213m, from £177m last year, while pre-tax profit grew five fold from just £539k in 2020 to £2.9m this year.
However, both the pre-tax and turnover figures remain well below the numbers recorded prior to the pandemic, despite the strong market boosted by the chancellor’s stamp duty relief seen in the last 18 months. In 2019 Weston made pre-tax profit of £24.6m, on turnover of £254m.
A statement contained in the report and accounts for Weston, filed at Companies house, pinned the blame for the challenging recovery on supply chain issues which it said had affected completions.
The statement said it had been a “tough and challenging year in many respects” but that the firms’ directors were “pleased to report an increased profit in a year that held some challenges for the Group.”
The business added: “As widely reported, the construction industry as a whole has faced challenges in relation to price increases, labour shortages and supply chain issues.
“The Group has not been immune from this. We have experienced delays to construction programmes, which have affected handovers and therefore completions.”
The accounts said that Weston expected “to continue to witness” cost pressures from these supply chain issues which, while sale prices were rising slowly, meant it was expecting “margins in the short term to be adversely affected”.
A spokesperson for the business said the figures reflected that it was still in the process of recovering from Covid-19, but that it is expected to return to pre-pandemic financial performance within the next 12 months.
The figures show the business’s gross profit margin dropped from 11.6% to 9.9%, a drop it said was down to a shift in the product mix. While Weston saw the number of homes it built grow by a third to 842, revenue recovered much more slowly.
The figures come after a year which has also seen Weston forced to concede defeat over its high-rise plans for the Anglia Square development in Norwich (pictured, left), which were rejected by former housing secretary Robert Jenrick a year ago on heritage grounds. Weston initially said it planned to appeal the decision, but has since said it will re-design the scheme.
The housebuilder, which claims a £2.1bn development pipeline and has significant expansion plans, earlier this year hired former Taylor Wimpey London boss Peter Gore to be its new group operations director, a move it described in its accounts as “strengthening the management team” in order to “further facilitate growth”.
The year also saw the firm invest £35 million in British Offsite, a specialist build offsite manufacturing and construction company, launched to manufacture factory made building components.
A spokesperson for Weston said: “The company’s latest report and accounts reflect the fact that the business is in the process of recovering from the COVID-19 pandemic and therefore the financial performance of the business has not yet returned to its pre-COVID-19 levels.
“The group expects the financial performance to return to its forecast growth levels within the next 12 months.
The spokesperson added that the business had built up a pipeline of residential and mixed use development worth £2.1bn in gross development value. This includes 20 current active sites and over 7,500 new homes, with projects including the £350m Abbey Quays urban village in Barking, and the £0.5 billion 10.4 acre Lorimer Village in Goodmayes.
No comments yet