The group’s revenue has fallen by 12.9% year-on-year, as unit sales drop
Retirement housebuilder Churchill has seen its pre-tax profit fall by 48.8% from £34.6m in 2022, to £17.7m in the year ended 30 June 2023.
Overall, the housebuilder, which manages more than 200 retirement developments across the UK, has recorded a gross profit of £64.8m, a reduction from £72.7m in 2022.
The Churchill group has also recorded a drop in turnover from £200.1m in 2022, to £174.3m in 2023.
Churchill said the 12.9% drop in revenue was due to a dip in consumer confidence, reflected in a reduction in unit sales to 431 units in 2023, compared to 543 the previous year.
Churchill’s operating margin has decreased by 4.7% in 2023, to 14.8%. Its return on capital employed figure fell to 8%, compared to 13.1% in 2022.
The chief executive officer’s statement in the 2023 financial report said the “disastrous mini budget in October”, as well as high inflation and interest rates and the ongoing war in Ukraine have had a direct impact on consumer confidence and the housebuilder’s day-to-day operations.
Spencer McCarthy, chief executive of Churchill, stated that the company recognised early in the year that its business would be impacted by these factors, and as a result it took “early steps to reduce risk and conserve cash”.
Churchill exchanged on 17 new sites in 2023, equating to approximately 782 units, a decrease from the 1,067 units exchanged in 2022.
McCarthy said that the reason for the decrease in unit exchanges was the change in market conditions, “which prompted us to take a much more prudent approach to land buying from October onwards in order to conserve cash”.
McCarthy’s statement said that the housebuilder maintained “tight control” of build costs, but that they increased by 9.7% due to inflation, specification changes and new building regulations.
Building regulations were cited as the more significant increase in build cost per unit, at 6.3%, while core inflation added 3.4% to build costs.
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He added that despite “the unprecedented challenges of the UK planning system”, Churchill achieved planning consents for 771 units across 16 sites, a slight increase compared to 624 units across 13 sites that it was granted approval for in 2022.
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