Market challenges weigh on Perth builder

A&J Stephen profits fall but firm remains confident conditions will improve

A major Perth housebuilder has cited the oil downturn and Brexit as contributing factors after reporting a significant fall in profits.

New accounts filed at Companies House by A&J Stephen (Holdings) show the company generated turnover of £17.47 million in the year to March 31, down from £24.92m in the prior year.

Pre-tax profits also fell from the £2.31m booked in 2016 to £209,564.

In his strategic report, company secretary John Webster said that, as previously forecast, the group had been negatively impacted by the uncertainty surrounding Brexit.

The firm had also been hit by difficult trading conditions in the north-east – where the group is among the developers progressing the major Chapelton site south of Aberdeen – following the slump in the energy sector.

The company sold 63 new homes during the year, a fall from 97 in 2016, and saw margins squeezed as material and sub-contractor costs rose.

Stephen’s said it anticipated around 70 homes sales in the current year period and, while a number of new developments have hit technical and planning hurdles, it said it expected its West Woodlands site in Perth to come on stream next summer.

Mr Webster said the company remained financially strong – it had no net bank borrowing at financial year end and cash resources of more than £4m – but conceded it may take time for the group to regain lost ground.

He added: “Given the time it takes to open up new developments to the point when new homes are occupied, the board predict that the current constraints facing the business will endure for a further two to three years before the business returns to level of turnover and profitability previously reported.”

Family-owned A&J Stephen has been building homes for more than 80 years.