Audley reports profit boost despite ‘challenging market’

Audley Group reported a pre-tax profit of £12.6m last year (2016: £1m loss) despite selling fewer units in what it described as a ‘more challenging market’.

It sold 147 units last year, eight fewer than what it achieved in 2016, with total completions, including resales, at 187, up 5.6% year on year.

In its financial report for the year ended 31 December 2017, income dropped 0.9% to £92.7m.

Its 2016 results were for a 55-week period after the group was bought by Moorfield Audley Real Estate Fund (MAREF) from another Moorfield fund. The 2017 figures were therefore boosted by additional revenue surpluses, the report said.

Income was made up of £74.7m of property sales, £4.6m of care revenue, £11.5m of estate management fees and £1.9m from other sources.

Cost of sales was £62.5m (2016: £87.7m), leaving a gross profit of £30.1m, up from £21.5m in 2016.

Following administrative expenses of £33.6m (2016: £23.4m) and gains made from revaluation of its investment properties, the group was left with an operating profit of £16.8m, up from £3.6m the year previous.

It provided 242,000 hours of care – an increase of 14% on 2016.

In the report, chairman Marc Gilbard, said: ‘The real estate market is, in my opinion, at the mature end of the its cycle, especially in the traditional real estate sectors (retail, office and industrial). Rents are high and yields are low and rising interest rates/bond yields will apply upward yield pressure. As such, the outlook for ongoing rental growth and yield compression is weak at best.’

However, due to changing demographics and growing numbers of older people together with an undersupply of accommodation, the group argues that the retirement housing sector continues to ‘offer substantial growth’.

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Deven Pamben has more than 15 years’ experience as a journalist, working on newspapers, trade magazines and online publications. A Criminology graduate, Deven worked for Hertfordshire Constabulary before becoming a journalist. He began his journalism career at a local newspaper in Hertfordshire before moving into trade magazines in permanent roles or as a freelancer. Titles he has reported and edited on include Law Society Gazette, Harpers Wine and Spirit, and Health Club Management. Deven has also written travel features for the Sunday People, and spent two years working in Beijing for the official press agency of the People’s Republic of China.