Pre-tax profit increases threefold in move from social to private housebuilding
Turnover fell 15% at construction group Hill in 2012 at a time when it is transforming itself into a 1,000-home-a-year private housebuilder.
The firm, which currently gets most of its revenue from social housing construction in the South-east, saw turnover fall for 2012 to 拢154m, generating a pre-tax profit of 拢7.3m, down 9% on 2011.
However, turnover at the company鈥檚 private housebuilding subsidiary Hill Residential more than doubled, from 拢17m to 拢38.4m in 2012, under a strategy designed to turn the company into a major regional housebuilder.
Likewise, Hill Residential鈥檚 pre-tax profit increased more than threefold, from 拢1.6m to 拢5.5m.
Last year the firm set itself on a course to build a 拢450m-turnover business by 2016, of which over 50% would be from developing private housing. If successful, the group would develop up to 1,000 homes for private sale each year, on top of up to 2,000 homes constructed for social landlords.
It鈥檚 a planned changeover so we鈥檙e more in control of our workstreams
Andy Hill, Hill
Chief executive Andy Hill said the firm was on course to see revenue from the residential business triple in 2013, to about 拢96m as it delivers on its promise to grow the business.
The firm is nearing completion on its biggest private sale scheme to date, a 150-unit scheme next to Cambridge rail station called Ceres CB1, which it says is 85% pre-sold.
Meanwhile, the firm鈥檚 contracting revenues continued to suffer in the current market, with turnover at Hill Partnerships falling by almost 拢40m to 拢140m.
In the firm鈥檚 accounts it blamed the fall on a downturn that was 鈥渓argely as a result of the cyclical nature of funding within the affordable housing sector.鈥�
Affordable housing starts across England were down 22.5% in 2012 on the previous year but have started to recover in the first quarter of 2013.
Hill鈥檚 accounts said: 鈥淭urnover activity levels are once more forecast to increase as a result of many new contract awards in [2012].鈥�
Andy Hill said he was not concerned by the drop in turnover, and the move to private housing was designed to release the business from the cyclical nature of the funding for social housing.
He said: 鈥淚t鈥檚 a planned changeover so we鈥檙e more in control of our workstreams.
We鈥檙e very much on track with our expansion plan.鈥�
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