You are viewing 1 of your 1 free articles
Scottish house builder slumps to loss due to rising costs and site delays
A Scottish house builder slumped to a post-tax loss of £729,000 last year due to “extremely difficult trading conditions” post-coronavirus pandemic.
Dunfermline-based Campion Homes said the loss for 2022-23 was “disappointing” following several years of positive financial performance.
The house builder, which works with several housing associations, recorded post-tax profits of £1.1m in 2021-22.
In its latest accounts, Campion blamed high inflation, which resulted in “regularly increasing costs” across its supply chain.
Many of the fixed-price contracts it had signed with housing associations and local authorities before the coronavirus pandemic ended during the year, resulting in losses being recognised across these contracts.
READ MORE
“With benchmarks rates for affordable housing remaining static during financial year 2022-23, it was not possible to negotiate significantly higher cost contracts with our affordable housing partners,” Campion said.
Turnover for the business also fell 25% to £36.3m, down from £48.5m in 2021-22.
The house builder said this fall was due to delays in expected site starts. Although the specific reasons for delays varied, they have all resulted in lower activity for the business, it added.
During the year, the Campion handed over 368 homes to housing association and local authority clients, and began work on 137 new homes. A total of 167 affordable homes were under construction as of June 2023.
The developer singled out how inflation had put “significant pressure” on the margins achievable on fixed-price contract work and said it had made recruitment of labour more challenging.
It also warned of planning delays and uncertainty around utility providers that were drawing out the process to bring forward land for development.
However, the directors stressed that the business had “withstood the difficulties of the last three years post-COVID” and had “an excellent pipeline of work ahead of it in both the affordable and private housing divisions”.
Pete Bell, executive chair of Campion, said: “As a family business delivering homes for nearly 35 years, we take a long-term view of our company and the market.
“These results reflect the extremely difficult trading conditions facing the whole housebuilding industry post-COVID.
“We have an exceptional track record of working closely with a number of housing associations to deliver much-needed new homes.”
