Cala revenue £1.3bn but mini budget hits reservations

Edinburgh-based upmarket home builder Cala Group, currently owned by Legal & General, announced its revenue rose 9% to £1.36 billion in the year to December 31, 2022.

Cala said it anticipates pre-tax profit of £169 million, a 27% increase on 2021.

Total home completions in 2022 were 3,027 – up 4% on 2021.

The business recorded a rise in private average sales price (ASP) in 2022 to £492,000, up from £462,000 in 2021.

However, Cala said it entered the new financial year with 751 forward private reservations equating to £396 million Gross Development Value (GDV) — down from 994 units and £488 million GDV in 2021.

Cala Group CEO Kevin Whitaker said: “Cala has delivered an excellent performance across 2022, achieving significant increases in revenue and pre-tax profit.

“This was attained through an increase in new home completions, strong sales price growth and the mix of homes sold during the year.

“We benefited from excellent market conditions in the first nine months of the year.

“During the final quarter of 2022, the impact of the UK Government’s mini budget on the financial markets directly influenced buyer confidence.

“This has naturally affected sales rates in recent months and has impacted the strength of our forward sales position.

“2023 will be challenging for everyone, due to the increased financial pressures associated with
higher living costs and mortgage repayments.

“Cala is well-placed to navigate the changing market conditions with the backing of our owners, Legal & General, alongside the talent, commitment and quality of our teams.

“The fundamental shortage in the supply of new homes continues to support new build delivery.

“In a more selective market, the quality of design and construction of Cala’s homes, alongside industry-leading customer service, continue to attract home buyers.

“Now more than ever, against the backdrop of increased fuel costs and reduced availability of secondhand homes, new homes offer a great alternative.

“Excellent energy and thermal efficiency help minimise energy use, while facilitators like part exchange support customers through their move.”

Cala said the land market was highly competitive throughout 2022 and Cala has taken a selective approach, focusing on high-quality developments in desirable locations.

During the 12-month period, Cala contracted 22 new short-term developments, expected to deliver 3,270 homes with an anticipated GDV of £1.3 billion.

“The market in 2023 will be challenging given increases in mortgage rates, alongside the increased cost of living for all,” said Cala.

“The group is well-placed to manage through changing market conditions with owners Legal & General, an experienced management team and the talent and commitment of its hard-working people.

“The fundamental shortage in the supply of new homes continues to support new homes delivery and strong levels of interest continue through Cala’s website, as buyers remain attracted to Cala’s outstanding quality of design and construction, alongside industry-leading customer service.

“In addition, the energy and thermal efficiency of new homes, coupled with the range of ways Cala can reduce the cost and uncertainty associated with moving home, such as part exchange, will continue to support sales throughout 2023.”