The Aberdeenshire-based housebuilding and construction group’s turnover fell 26% from £132m to £97.7m, largely attributed to high inflation, increased interest rates, and unpredictable mortgage availability.

The group expects a significant increase in turnover and profit in its current year to March 2025 as market conditions start to improve. Current sales of homes are more than 50% ahead of the previous year and a strong order book for Timberframe in 2025 has already been secured.

Andrew Tweedie, CFO of Bancon Group, said: “In what was a challenging year for our industry, we have weathered the storm to deliver a resilient performance with positive results.

“Our strong and balanced portfolio of business streams combined with a focus on control of margins and overheads have enabled us to remain profitable in spite of reduced sales across our business.

“With some of the uncertainty in the market having settled, we are now seeing a marked uplift in activity and trading performance across all the sectors in which we operate. We look forward to delivering a strong and further improved result come our year-end in March 2025.”

Turnover at Bancon Homes was down from £68.4m in 2023 to £65.6m for the year ended March 2024. The cumulative headwinds, which impacted on consumer confidence at the end of 2023, led to a reduction in sales of private new build homes. But the business was able to offset this decline with increased activity in the provision of affordable homes. A notable example of this is the flagship development at Cloverhill, where Bancon has handed over 258 of the 536 affordable homes, planned over a four-year period, to Aberdeen City Council.

The housebuilder has continued to invest with the acquisition of three new sites across North-east and Central Scotland and has also held on to its Gold Award for customer satisfaction from Inhouse Research for the seventh consecutive year.

Bancon Construction increased its operating profit by 38% against a reduction in turnover from £35.5m to £21m. The group says this underlines the success of its strategy of derisking the business and moving away from volatile main contracting to focus on better margin works and secure longer-term contracts with an acceptable risk profile. This has resulted in successful partnerships with local authorities and housing associations with a focus on the delivery of affordable housing and retrofitting existing council properties.

UK housebuilders have been typically reporting volume reductions of between 30% and 35% in the period of these accounts and this trend was reflected in Deeside Timberframe’s activity levels where turnover was down 33% on the prior year, from £37.1m to £25.0m. Margins held up well however and the business produced a profit of £1.5m compared to £2.3m in the previous year. Volumes have also recovered strongly throughout the first half of this current financial year with expectations of this being maintained for the full year.

Deeside Timberframe has continued to make significant investment into automation, capacity and production capabilities to capitalise on the long-term, strong market fundamentals as the industry accelerates the use of modern, more environmentally-friendly methods of construction. A further step in the group’s expansion plans was the opening of an office in Warrington, England.

Bancon Group’s chairman, Bob McAlpine, concluded: “These robust results reflect the underlying strength of our business, the spread of risk and strong position in the markets in which we operate.

“With market conditions improving, a strong team in place, and a marked uplift in activity levels this year we are well-placed to deliver our growth ambitions and capitalise on the prospects available to us going forward.”