Keepmoat lifts pre-tax profit to a record £62m

Keepmoat, the social housing specialist, has reported a record pre-tax profit of £62m. The profit margin lifted to a figure of 11.1%.

The group’s latest annual results cover the 12 months to 31 March 2008.

Turnover was higher at £560m (figure in previous year: £530m).

Keepmoat was sold in August last year at the peak of the market when its founders, Dick Watson and Terry Bramhall, sold the group for £780m to the HBOS bank.

A six-strong management buy-in team arrived, led by new chief executive David Blunt and finance director John Thirlwell.

The three most serious contenders each tabled offers within £100m of each other.

Keepmoat’s current value runs to just  40% to 50% of the sale figure last summer, suggesting an evaporation of £400m of value, though the new owners recently told CJ they have no regrets over the timing of their move nor the offer price.

In the previous year, a pre-tax profit of £50m gave Keepmoat a profit margin of 9.4%.

David Blunt says: “We have seen a slow-down of the housing market and a correction in house prices.

“Although demand for affordable homes remains strong, our customers are finding it difficult to secure mortgages as a result of the credit squeeze.

“However, the fundamental dynamics of the market are unchanged. There is a huge need for affordable homes in the UK that meet environmental standards. Housing continues to be a central part of the government’s regeneration agenda.”

The social housing division works closely with:

• local authorities;
• registered social landlords;
• arms length organisations;
• New Deal for Communities boards;
• English Partnerships.

The regeneration division’s turnover ran to £420m, a rise of £20m. The forward orderbook stands at £1.5bn which Blunt said made Keepmoat the market leader with a 3% share of the market.

Keepmoat has downsized its private housing wing. It trades as Haslam Homes. Turnover was £4m down at £140m.

The group’s push to achieve a 100% partnered supply-chain continues: to date 83% of materials are purchased through partnership deals and 50% of the sub-contract trade spend is through framework agreements.

Over 89% of affordable homes are built on brownfield sites.

Employee numbers were 4% higher at 3,100 though the cost of wages and salaries was 13% ahead at £97m.

The highest-paid director took home pay running to £818,000 and had another £24,000 put aside for his pension pot.

Keepmoat's ultimate parent is Lakeside 1, a company incorporated in the UK.