CALA Group announces Banner Homes acquisition
Residential developer CALA Group has acquired Banner Homes, significantly expanding the size of its business.The move is a step towards the housebuilder's aim to more than double the size of its operations by 2017.Banner Homes, which was founded in 1975, operates from 21 sites across the northern and southern home counties and the Midlands. It is described as a "perfect strategic fit" for CALA, with its focus on upmarket, family homes within affluent locations in the south of England, the Midlands and Scotland. The company sold 235 homes during the twelve months to May 2013, resulting in revenues of £111 million and an operating profit of £16.4 million at a gross margin of 24 per cent.In February, CALA announced a major expansion of its business after posting strong trading figures and 16 per cent growth in the value of its landbank.Its Midlands business is forecast to triple its revenue over the next three years and its West Scotland division is expected to deliver revenue growth in the region of 70 per cent during the same period.Banner's land bank comprises almost 1,100 units, while CALA has 10,770 plots.The combined CALA and Banner business will directly employ over 600 people and have a turnover of more than £500 million in its first full year with net assets of £200 million.CALA is to continue to focus on securing new land and bringing it forward for development, with the financial backing of of investors Patron Capital and Legal & General.In the long term, the company will have the potential to deliver approximately 2,000 homes per annum by the 2017 financial year at a private average selling price in the region of £400,000.Alan Brown, group chief executive of CALA, said: "We are delighted to have acquired such a high quality business which fits perfectly with CALA's own market position and expansion plans. "Banner has a deserved reputation as one of the finest luxury house builders in the UK and combining the two businesses will put us in the top 10 of UK home builders with significant growth potential."
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