Property development deals have fuelled soaring profits at Caddick Group, despite losses across its construction arm and Leeds Rhinos stake.
The Wetherby-based operator posted operating profits of £56.7m in the year to the end of August, up from £16.9m the year before. And turnover jumped 28% to £491m. Caddick hailed schemes delivered by its build-to-rent joint venture Moda Living, including the 515 unit New York Square development in Leeds and the 481 unit Mercian development in Birmingham. It also pointed to land sale profits and a forthcoming development profit on the sale of a 300,000 sqft warehouse on its Leeds Valley Park site to an investor.
There was also a land sale of Caddick's 26 acre site in Leyland, on which it expects to complete 544,000 sqft warehouse later this year. Overall, the group said it had a land pipeline capable of delivering 16million sqft of industrial land and 10,000 residential properties.
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But £4.2m losses across its £84m turnover construction business were caused by headwinds currently familiar to the market including materials, fuel and labour cost inflation. Chairman Paul Caddick said this was mainly on fixed price residential contracts where costs could not be passed on to customers.
There was also a £30m reduction in work coming from the group's own development division. Despite the trading difficulties, Mr Caddick said he expected the construction arm to see turnover of about £285m in 2023, with a return to profitability also anticipated this year.
There was also a £1.7m loss at Leeds Rhinos rugby club - of which Caddick is the majority owner. The group said the team had made a poor start to the year, winning only one of its first ten fixtures.
Despite a 27% increase in turnover driven by record sponsorship and hospitality sales, higher costs associated with running its redeveloped Headingley Stadium and reduced Super League income had led to a loss. The group now anticipates break event for the club next year with new facilities at the stadium helping to generate turnover for non-sport events.
In a statement issued following publication of the accounts, Caddick Group's Johnny Caddick said: "Our focus on Living and logistics has proven its resilience and strength through recent years, putting Caddick Group in a strong financial position. Our work to secure a market leading pipeline of opportunities across our sectors has given us the headroom to invest for our future and secure a bright outlook for the Group.
“We have a national geographical reach, with projects now on site in the North of England, Scotland, the Midlands and the South. As a privately owned business, we have the flexibility to take decisions quickly and react at speed to evolving market conditions. Our expanding team has worked tirelessly to ensure we are in rude health, giving us the confidence to invest in our future, which is reflected in an expanding pipeline with a GDV approaching £10bn.”
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