High demand for homes sees housebuilder’s profits jump 50%
- Credit: Archant
A regional housebuilder is bullish about its future prospects after recording a 50% jump in pre-tax profits.
Hopkins Homes says it is on track to sell around 700 homes this year as new sites open, and that it has 'substantial funds' to capitalise on government policy which could open up more land for development.
The Woodbridge-based housebuilder, a member of the EDP/EADT Top100 list of Norfolk and Suffolk's biggest companies by turnover, saw revenue jump by more than a third (34.5%) to £172.35m in the year to April 30 2017 while pre-tax profit was up 54% to £39.05m, which it attributed to continued strengthening of demand.
The firm's faith in the British housing market has been echoed by industry giants Persimmon and Taylor Wimpey, which have both claimed that strong demand buoyed group sales in 2017.
A directors' report published with Hopkins Homes' accounts said that, despite the Brexit vote and last June's general election, 'the recognition that increased housebuilding will play an important role in the recovery has remained constant'.
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It said: 'The National Planning Policy Framework is beginning to allow more developable land to be brought to the market, and the Help To Buy scheme has helped more people to buy new homes and is an important part of our current sales strategy. Both these initiatives will result in more new homes being built.'
The report said the group remains 'well positioned' and has 'substantial funds available for land purchases to take the group forward, as and when market conditions allow'.
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It added that while there had been no adverse impact on sales performance since the general election, the directors are monitoring the political situation and 'remain optimistic that economic stability will be maintained' through the Brexit negotiations.
In its full-year trading update Taylor Wimpey, the UK's third biggest housebuilder, claimed the housing market was 'solid' after it benefited from 'good demand and trading' through 2017. It reported a 5% rise in completions to 14,541 over the year, while average prices for private sales rose 3% to £296,000.
Persimmon also reported a healthy demand for new homes last year, with group revenues up 9% to £3.42bn and the average selling price rising 3% to £213,300.