PAYING down debt helped Inverness housebuilder Tulloch Homes increase its pre-tax profits in the year to June 2017 despite its turnover contracting by 3.5 per cent.

The firm, whose activities are focused mainly in the Highlands and Aberdeenshire, saw turnover dip from £45 million to £43.4m while profits rose by 13 per cent from £6.8m to £7.7m.

This was thanks in part to the interest it paid on loans and overdrafts almost halving during the year from £650,000 to £334,000. This in turn was down to the firm’s bank debt, which was paid off completely in August last year, falling from £10m to £5m from year to year.

After paying off its outstanding loans the firm in August arranged a new £20m facility with Bank of Scotland with the aim of helping boost its pipeline of homes.

According to the accounts for the 2016/17 year, the firm’s pipeline reduced slightly over the 12 months, with a bank of 1,106 units awaiting construction representing a fall from 1,147 at the end of the previous year.

Despite this, the firm said it also had potential for a further 501 homes that had not yet been granted planning permission.

Tulloch Homes chief executive George Fraser said the size of the land bank gave him confidence that the firm would grow its turnover in the current year.

“Our measured investment in suitable sites combined with low interest rates and a relatively stable economy in our primary areas of activity have contributed to another positive year for the firm,” he said.

“From what we have seen confidence among house buyers remains robust, and that has continued over the past six months.”

The firm took out the £20m funding package to allow it to buy further sites for development with the aim of increasing its turnover by 50 per cent within the three-year term of the loan.

While the number of homes the firm sold during the year fell by 10 per cent, from 201 to 180, as the average selling price rose from £203,000 to £210,000 the amount of income it generated from house sales fell by just seven per cent.