ABERDEENSHIRE-based housebuilding and construction specialist Bancon Group has hailed a ‘significant upturn’ in trading performance in the current financial year as it lodges accounts for the year ended March 2024.
The group expects to increase both turnover and profit in its current year to March 2025, as market conditions start to improve. Current sales of homes are more than 50% ahead of the previous year and a ‘strong’ order book for timber frame in 2025 has already been secured.
The forecasts come after Bancon Group reported ‘resilient’ results for the previous year against a backdrop of inflation, increased mortgage and interest rates, and unpredictable mortgage availability.
During 2023 and into 2024, the group delivered operating profits of £3.8 million, compared to £4.6 million in the previous year, despite turnover falling by 26% from £132 million to £97.7 million. Pre-tax profits of £1.3 million dipped from the £1.8 million posted the year before.
Andrew Tweedie, chief financial officer of Bancon Group, said, “In what was a challenging year for our industry, we have weathered the storm to deliver a resilient performance with positive results. Our strong and balanced portfolio of business streams combined with a focus on control of margins and overheads have enabled us to remain profitable in spite of reduced sales across our business.
“With some of the uncertainty in the market having settled, we are now seeing a marked uplift in activity and trading performance across all the sectors in which we operate. We look forward to delivering a strong and further improved result come our year-end in March 2025.”
Turnover at Bancon Homes was down from £68.4 million in 2023 to £65.6 million for the year ended March 2024. The ‘cumulative headwind’s, which impacted on consumer confidence, led to a reduction in sales of private new build homes. But the business revealed it was able to offset this decline with increased activity in the provision of affordable homes. A notable example is the development at Cloverhill, where Bancon has handed over 258 of the 536 affordable homes, planned over a four-year period, to Aberdeen City Council.
The housebuilder has acquired three new sites across north east and central Scotland and has also held on to its Gold Award for customer satisfaction from Inhouse Research for the seventh consecutive year.
Bancon Construction increased its operating profit by 38% against a reduction in turnover from £35.5 million to £21 million. The group said this underlines the success of its strategy of de-risking the business and moving away from ‘volatile’ main contracting to focus on better margin works and secure longer-term contracts with an acceptable risk profile. This has resulted in successful partnerships with local authorities and housing associations with a focus on the delivery of affordable housing and retrofitting existing council properties.
Deeside Timberframe experienced a 33% drop in turnover, from £37.1 million to £25 million. The business produced a profit of £1.5 million compared to £2.3 million in the previous year. Volumes are said to have ‘recovered strongly’ throughout the first half of this current financial year with expectations of this being maintained for the full year.
Bancon Group’s chairman, Bob McAlpine, commented, “These robust results reflect the underlying strength of our business, the spread of risk and strong position in the markets in which we operate. With market conditions improving, a strong team in place, and a marked uplift in activity levels this year we are well-placed to deliver our growth ambitions and capitalise on the prospects available to us going forward.”
