Revenue and profit down at Cala Group after sale to private equity

Revenue and profit has dropped at Cala Group in its first full-year results since its acquisition by US private equity.

In its results for the year ended 31 December 2024, published at Companies House this week, the housebuilder reported a drop in group revenue from £1.25bn to £1.17bn, owing primarily to a £96m fall in private housing revenue.

However, income from affordable housing rose from £115.5m to £124.9m.

Pre-tax profit was £13.4m, down from £82m, having been significantly hit by exceptional items, which accounted for a net charge of £58.3m before tax. 

The firm said: “This comprises of a combination of an increase in the provision for remedial items relating to fire safety measures on historical developments, a strategic land sale of a former L&G site, a WP write down on a site that was sanctioned as an area of historic interest following the identification of artifacts and legal & professional fees and bonuses paid to senior management in connection to the sale of the business in October.”

The increase in provisions relating to building safety in the year amounted to £16.8m.

Before exceptional items, pre-tax profit was still down, from £103.6m to £71.8m, which the group said reflected not only the reduction in turnover but also a 1% reduction in operating margin. 

Margins dropped partly due to increased incentives being required to generate sales as well as a small amount of cost inflation not being offset by increased selling prices.

Cala operates through nine region business across the south of England, the Cotswolds and Scotland

Previously owned by L&G, it was acquired last October by Sixth Street Partners and Patron Capital Advisors.

During the year, Cala contracted 21 new sites which are projected to deliver 2,287 new homes.