Fife housebuilder warns of ‘difficult trading’ as it makes £3.9m loss

Fife builder Muir Homes will reduce its presence in north-east Scotland after its parent company posted a multi-million-pound loss.

Family-owned Muir Group, which is the parent company of Muir Construction, Muir Homes, Muir Timber Systems and Muir Leisure, lost £3.9 million last year.

The company, headquartered in Inverkeithing, said “difficult trading conditions” continued to have an impact on profits.

Muir Group also owns and operates Deer Park golf course in Livingston.

The company reported £92.9m in turnover to February 4 2024, down slightly from the previous year’s £93.3m.

They reduced their staff numbers to 211, from 238, during the same time period.

Muir Homes to ‘pivot’ to central belt

In its annual accounts, Muir Group said its housebuilding division was stretched across Scotland.

As a result of recent losses, they added, a “pivot” to building in the central belt away from the north east would take place.

Muir Homes Ltd recorded a loss of £7.4m. It follows an announcement earlier this year the housebuilder was changing the type of home it was constructing.

As the country gets older and demographics shift, Muir Homes said will build more single-level houses in its new developments.

They said “unprecedented” disruption to the supply chain, a rise in costs, and economic headwinds had all had an impact.

Group finance director Derek Adam, in his strategic report, said: “The financial results for the group show a loss after tax of £3,907,000 (2023 profit: £1,927,000).

“The period ended February 4 2024 has continued to present a difficult set of trading conditions across the group.

“This is reflected within the trading companies differing results.

“Muir Construction has had another successful year, securing an increased number of contracts across a varying range of industries.

“Margins within the sector continue to be low, with the impact of cost inflation, lack of supply and skilled labour shortages increasing costs.

“The company has continued to drive efficiencies whilst maintaining a high level of customer satisfaction.

“Within the current economic climate, 2024-2025 will continue to be challenging.

“However, Muir Construction is looking to further enhance its reputation for quality and customer excellence and continue to deliver profits.

“Muir Homes’ results have been impacted by the economic headwinds challenging the housebuilding industry, in particular increased mortgages rates, high inflation levels and the cost of living crisis, all of which have dented customer confidence and purchasing power.

“In addition, the housing sector has faced unprecedented disruption in the supply chain, with significant material and subcontractor price increases outstripping sales price increases, as well as a skills shortage in the industry.

“The company has continued to be impacted by the geographical spread of their sites, with particular focus on the north east of Scotland which continues to see a downturn in market activity, where the company had several sites.

“Looking ahead the Muir Homes’ objective is to return to profitability and sustained long-term growth.

“In support of this objective we are implementing a number of strategic objectives, including pivoting towards a geographical bias towards central Scotland for new site developments.”

Increase for customer base

The timber wing of Muir Group increased its customer base, which contributed to an increase in profitability for the manufacturing division.

Mr Adam added: “Muir Timber Systems increased its customer base over 2023-2024 which has seen a continued profitability, albeit the slowdown in the housebuilding sector as noted above has resulted in reduced margins and a reduced turnover.

“This year looks like it will continue to present challenges across the market.

“Muir Leisure’s results have been impacted by the cost of living crisis and the squeeze on disposable income.

“It is envisaged 2024-2025 will be further impacted by the economic climate as households adapt to higher utility costs, higher mortgage rates and subsequent

“As a group we are well positioned to deal with  the current market challenges, as well as embrace the opportunities the current market conditions present.

“We will continue to focus on delivering excellence across the portfolio of companies while maintaining a drive for efficiency and value for money.”