Strength of covenant

In any sector in the current climate the strength of a company’s covenant is the key consideration for customers, suppliers and employees alike. The Mactaggart & Mickel Group prides itself in the strength of its balance sheet, the support from its lenders and its current profitable trading performance.

The value of our balance sheet stands at Summer 2011 at £133m and we are currently negotiating a new debt facility to December 2014 with our lenders Royal Bank of Scotland plc. Our gearing position has been between 20%- 30% for some time now, a position that the board are comfortable with. The Group has returned to profit for the second consecutive financial year after a loss in 2009. Our letting portfolio valued at £51m eliminates some of the volatility normally associated with the balance sheets of our competitors in the sector.

The strength of our covenant has been a key factor in our successful drive for diversification. It has allowed the Group opportunities to enter new business ventures such as investment in commercial properties and our timber systems business. Our strength enables us to continue investment in our land bank in order to deliver value to our shareholders in the short to long term.

Our forward sales pipeline remains strong as we continue to open new developments and our participation in the forthcoming construction of the Athletes Village for the 2014 Commonwealth Games allows us visibility of future work out with the private home build market.

The Group have 85 years behind us as a business and our current financial standing should enable us to withstand what the current climate brings and enable us to take advantage of the upturn when it arrives.