STEWART Milne Group has revealed it has kick-started the process of selling the company as it reported a return to profit in its most recent financial year.

The Aberdeen-based housebuilder put itself back on the market in May after pausing the sale process in the aftermath of former prime minister Liz Truss’s mini-Budget, which caused chaos in the financial markets in September. It was originally put up for sale in April, when chairman and principal shareholder Stewart Milne announced his decision to retire, nearly half a century after founding the business in 1975.

The company said the housing market has rebounded to “normal activity levels” since January as its new accounts showed it made a pre-tax profit of £16.5 million, its highest level in seven years, in the year ended October 31. This followed a loss of £13.1m the year before.

READ MORE: Boss of Farage scandal bank quits with immediate effect

Stuart MacGregor, chief executive of Stewart Milne Group, said: “We initially embarked on a sale process in early 2022 after founder and major shareholder, Stewart Milne, announced his decision to retire. This attracted significant interest and was progressing well. However, the economic uncertainty caused by the government’s mini-budget in September 2022 prompted us to suspend the sale process in December last year.

“Since January 2023, however, the UK housing market has rebounded to more normal activity levels with robust house prices and demand. Reservation levels for Stewart Milne homes, across Scotland and north-west England, have exceeded those for the same period in the previous year.

"This exceptionally strong performance and more positive market conditions, along with renewed interest from potential buyers, have led to our decision to go back out to the market. We already have a number of seriously interested parties.”

READ MORE: Does Alison Rose deserve sympathy after Farage row sees her lose job?

Asked if the company had seen any effect from high interest rates and the ongoing cost-of-living crisis, the company said: “Presently we have a strong level of demand in the areas we operate – north-east Scotland, central Scotland, and north-west England.

"Buyers of our new build homes are focused on mid-term interest rate projections and are budgeting accordingly. Our reservation rates from January to June have been exceptionally strong.”

While the profits at Stewart Milne reached a seven-year high, the latest accounts show that turnover fell to £172.4m from £221.1m. The builder attributed the drop to reduced investment in land during the pandemic, which led to a decrease in the number of homes completed to 583 from 828.

Combined with a higher number of settlements within the company’s Homes North region, which yields a lower margin than the group’s other regions, operating profit decreased to £7.1m from £8.5m.

READ MORE: Rosebank Distillery completes first production run in 30 years

However, the company said margins improved on the back of moves to improve efficiencies, reduce costs – leading to annualised savings of around £5m - and the impact of its new village housing range, with the bottom line boosted by the sale of the company’s timber systems business in December 2021.

The division was sold to James Donaldson, the long-established Fife timber merchant, in a deal which allowed Milne to substantially cut its borrowings and generate a gain on sale of £48.1m.

A further gain of £11.3m arose from the liquidation of subsidiary Countesswells Development, which was set up to build 3,100 homes on a site to the west of Aberdeen but fell into administration in 2021 following Covid and the downturn in the oil and gas industry.

The accounts show exceptional net income was offset by exceptional operating costs of £41.4m, including £16.3m relating to the revaluation of sites the company no longer intends to develop.

Stewart Milne said the proceeds from the timber frames business allowed it to repay £61m of its debt facility to the Bank of Scotland during the year to October 31, 2021. The company declared it ended the period with £15.8m of cash, noting that its banking facility had been extended to June 2024. It now has a debt facility of £114m.

Despite the challenges presented by high interest rates and the cost of living crisis, Stewart Milne highlighted signalled its confidence in the outlook. It said 87% of completions for the year ended October 31, 2023, have already been secured, declaring that this underlined the strength of the market across all regions and demonstrated “unprecedented demand in recent time for our quality family homes”.

It said it was especially encouraged by levels of demand in the north-east of Scotland, which “previously presented a more challenging sales environment”.

The company employs 390 people and said it increases pay rates every August. It noted that recruiting staff has been “challenging” in certain areas in recent years but currently has no vacancies.