Property developer Caddick Group has reported a 37.5 per cent rise in pre-tax profits as the business increasingly focused on city-based build-to-rent residential developments.
The Yorkshire-based firm registered pre-tax profit of £11m for the year ended August 31, 2018, while turnover climbed by 49 per cent £226m.
Johnny Caddick, a director at Caddick Group, said the latest results show that the firm’s strategic focus is working.
He told The Yorkshire Post: “We decided a number of years ago that we would refocus the business.
“We saw fundamental changes in consumer behaviour, which was the trend towards city centre living in the regions.”
Profits are up after suffering a dip the previous year and the family-run business has a £4.6bn development pipeline across housing and industrial.
Mr Caddick attributed a “large proportion” of the turnover increase on its Moda Living build-to-rent brand.
The brand is a joint venture with developer Generate Land backed by Apache Capital Partners. It has a £2bn pipeline of 7,000 rental apartments in ten cities across England and Scotland.
Caddick added that £800m of Moda Living projects will be under construction this year.
Away from Moda Living, Caddick also has 10,000 homes in various stages of planning across the country.
Mr Caddick added that a large part of growth over the next five to ten years will be as a result of Moda Living.
“Moda is probably the most dynamic element of our group going forward,” he said, “it’s a very, very quick area of growth for our group.”
Speaking about Britain’s impending departure from the European Union, Mr Caddick said that there was a certain amount of uncertainty but the firm as yet has not been impacted by it.
He added: “What businesses, pension funds and anybody lending any money of any sort doesn’t like is uncertainty.
“We’ve seen more uncertainty at the beginning of this year as the Brexit date gets closer. Everybody is mindful in the business community and will want a resolution to Brexit.”
If there is continued uncertainty then it is likely to put people off buying a home for another year, Mr Caddick said.
“So the rental side keeps marching on in an economy where you’ve got uncertainty,” he added.
Mr Caddick believes that investors have made themselves “comfortable” with the idea of Brexit going ahead.
“I don’t want to speak on their behalf but what we are hearing and what they are doing with us is business as usual,” he said.
Looking ahead to the year, Mr Caddick is upbeat about the group’s prospects.
He said: “We’re looking forward to delivering the SOYO scheme in Leeds. That is a big project for us at Caddick Developments so that is very exciting for us. We’re looking to deliver our developments across the UK.”
Caddick Group has over 500 employees nationwide. The firm expanded its land acquisition activities throughout 2018, following the launch of the strategic land division in 2017.
Caddick Construction enjoyed another strong year as well, with pre-tax profits jumping 30 per cent to £2.74m.
Quality homes and jobs for cities
Moda Living’s flagship scheme, Angel Gardens, a 466-home, 35-storey tower in central Manchester, topped out in January this year, with the first residents moving in this Summer.
Caddick Construction is building the project after taking over as main contractor from Carillion in January 2018.
Johnny Caddick says one of the key drivers behind the demand for city-based build-to-rent developments in the regions was the retention of students.
He said: “If you look at student retention rates they’re up year-on-year.
“What do those people need? They need quality jobs and quality homes.”