GOVERNMENT-backed sche-mes to revive house building are also helping to increase sales at one of Yorkshire’s best known property firms.
Arnold Laver & Co says it’s well-placed to benefit from the property sector’s upturn, and it predicts that the UK construction market will improve significantly in 2014.
In the directors’ report to accompany accounts which have been filed at Companies House, Sheffield-based Arnold Laver delivers an upbeat assessment of its prospects. According to the report, construction output continued to fall for the first three months of 2013, with bad weather playing its part in delaying work.
“In April 2013, however, things started to change and the Government schemes aimed at getting the country house building again kicked in,” the report states.
“As a consequence, we saw a pronounced increase in business volumes in the last three months of our financial year.”
Against the background of the “extremely depressed UK construction market” for three quarters of the financial year, in the year to June 2013 Arnold Laver & Co achieved an operating profit of £4.95m, which is an increase of 12.4 per cent on the previous year.
Turnover fell by 4.1 per cent in the year to £93.56m.
The report continues: “However, by keeping costs tightly under control and introducing innovative new products, profit before tax increased by 6.2 per cent to £3.01m.
“We view this as an excellent result in a very testing trading environment and it is a testimony to the skills and tenacity of the individuals that make up the company.”
During the year, the group’s main activities were timber importing and merchanting, leisure and property developments.
The report shows the extent to which the construction sector has recovered over the last year. In December 2012 construction levels had become “very similar to those seen in the trough of 2009, following the start of the banking crisis”.
The report states: “Our view was that house building would be the first sector to emerge strongly from the recession because we noted that, as a nation, we have a pressing need for new house building levels well in excess of the current build rate. We also noted that the timing of this increase would largely depend on the availability of sensibly-priced mortgage finance.”
The Government’s Help to Buy scheme, which was launched earlier this year by Chancellor George Osborne, allows people to get a mortgage with just a five per cent deposit, because the Government guarantees the rest. Many house builders and property firms have reported rising demand since Help to Buy was launched.
Last month, Sheffield-based property company Henry Boot said the Government’s initiative to help home buyers gain access to the mortgage market was having a significant positive impact, and it was also lifting the confidence of national house builders.
In its accounts, Arnold Laver & Co says: “The current financial year has started very well with both net new orders received and turnover increasing significantly. House building is leading the way and we expect volumes to increase further as 2014 progresses.
“This increase in activity also extends to other areas, such as infrastructure works, and although sectors like commercial construction are still depressed, we anticipate that the construction market as a whole will improve significantly in 2014.
“This is welcome news after five difficult years for the construction sector following the banking crisis. We believe we are very well-placed to capitalise fully on the expected upturn.”
Arnold Laver & Co is delivering environmentally friendly products at competitive prices, and it has invested in its supply chain and production capacity, the report says.
The report adds: “We can guarantee our customers continuity of supply in what will become an increasingly difficult market to source building products, as demand picks up and the supply side lags behind, following worldwide cutbacks in production capacity over the last five years. In the absence of any major macro-economic shocks to the wider economy, we are confident of reporting a significantly improved trading performance for the current financial year.”
The average number of employees during the year was 531, compared with 540 the year before.
The company can trace its roots back to 1920, when First World War veteran Arnold Laver used his savings to establish a timber merchants in Sheffield.