Tulloch Homes unveils 11.7% profit margin

Tulloch Homes made a pre-tax profit of £11m in 2007 from a turnover of £94m.

The result represents a profit margin of 11.7%

In the previous year the figures were complicated by the effect of a sales deal. Tulloch’s turnover in 2006 was slightly down at £85m, but the pre-tax profit was a massive £33m.

However, that mouth-watering performance included the benefit of a £27m gain on the group’s former construction division, which is now part of Rok.

David Sutherland, chairman and chief executive, said: “The group has delivered a first-class set of results for 2007, increasing the underlying profitability of the business. This has been achieved against a backdrop of a challenging housing market but one in which we have nonetheless continued to sell well.

“Given the turmoil in the housing market south of the border, the focus will be on preserving our land bank, which at current volumes stands at five years.

“We are concentrating on marrying our construction and sales curves to ensure our stock-carrying element is not too heavy. We have no plans for any acquisitions in the near future.”

A shuffling of the group’s corporate cards during 2007 resulted in the formation of Tulloch Homes Group from various former elements. The result was that Sutherland’s shareholding was bumped up from 57% to 73%.

The group’s ‘plan A’ was to float on AIM (the junior portion of the Stock Exchange) in December 2007 but “uncertainty in global stock markets” put the frighteners on that idea.

Instead, the Bank of Scotland got invited in for a cup of tea and ‘plan B’ was agreed. The result of this is that the bank now has a 40% stake in Tulloch and Sutherland’s tranche has been trimmed back to 43%.

Directors’ salaries were also pruned in 2007 with Sutherland himself being the subject of the biggest belt-tightening. After enjoying pay of £4.8m in 2006 he had to get by on £1.5m last year.