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Brown: Cala in strongest position ever

CALA Group has signalled it will post record profits after seeing its turnover grow 22 per cent to £293 million.

Confident: Cala Group's chief executive Alan Brown says the business is in its strongest position ever after seeing turnover of £293 million.

This led to chief executive Alan Brown suggesting the business is in its strongest ever position.

The overall business has been boosted by the £200 million acquisition of Banner Homes, which is focused on the south of England, in March this year.

Partly as a result of that deal Cala's average selling price increased 24 per cent to £415,000 in the 12 months to June 30.

Mr Brown said the price has been pushed up as Banner's average was around £500,000 rather than any major house price inflation although it has grown by a few percentage points on an underlying level.

He said: "Outside of London sales price inflation, even in the south east of England, is in low single figures so it is not at an unsustainable level which we are concerned about."

Mr Brown said the integration of Banner is going extremely well with all sites now re-branded and back office systems ahead of target.

However the full process is likely to run until October

The number of completions in the year was at 689, down from 694, but Cala said its gross margin in housebuilding had grown from 18.8 per cent to 23 per cent which will help it to post profits in its housing arm ahead of the £12.5 million booked in the 2013 financial year.

Mr Brown said: "Business levels are steady.

"It is not easy and we have to still work on sales.

"It has improved but it has come from a low base."

While Cala, which is owned by Patron Capital and Legal & General, had intended to double in size by 2017 Mr Brown stated the company is actually on track to treble by then.

The Aberdeen business, only relaunched relatively recently, is expected to grow by two-and-a-half times while the more mature divisions in the east of Scotland and the west of Scotland are pencilled in to expand by between 40 and 50 per cent. The five English arms it runs are also expected to grow solidly.

Alongside that Cala plans to continue to add to its workforce of 671 to bring headcount up to around 800 over the next 18 months. Mr Brown said: "We are recruiting staff in every single office at the moment and on sites."

Cala said it has started its new financial year with forward private sales with a gross development value of £166 million, up from £77 million at the same point in 2013 and equivalent to more than one third of its private housing revenue target for the coming 12 months.

Mr Brown said: "We are in the strongest position we have ever been in, in terms of land bank, in terms of financial backing and forward sales.

"I see the business at the moment, providing the market stays stable, just continuing to build from here."

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