Renaker sees revenues rise, profits drop
The Manchester-based skyscraper developer/contractor recorded earnings of £229m for the 12-month period ended October 2023, up more than £50m year-on-year, but market headwinds stifled profit growth.
Renaker, which has forged a reputation as one of the country’s most prolific residential developers in recent years, recorded a £3.7m profit after tax, down £1m compared to the previous year.
The firm, headed up by Daren Whitaker, blamed high inflation for the reduction in profits, citing energy price rises and the cost of materials as specific pain points.
However, Renaker states that the firm “continues to navigate external uncertainties well” and is confident that the quality of and future demand for its product can help it weather market headwinds.
“High quality, well-located residential projects remain highly attractive to prospective buyers and renters in the city…giving us confidence we can be resilient to the wider macro factors we cannot control”, the financial statement says.
During the period, Renaker completed Cortland at Colliers Yard, a 50-storey BTR scheme in Salford, and Blade and Three60, a pair of skyscrapers in Manchester.
Likely up on previous year because Renaker (completed) and sold their tallest Greengate tower to US company Cortland (hence the name).
By Anonymous
This goes to show that developers are not having it away, like the general public believe. A 1.6% profit margin is super-low considering the risks involved. If Renaker are only making this type of margin, smaller developers must be struggling.
By John W
The party is well and truly over for apartments and office developers in Manchester because state of economy and much higher interest rates.And that’s great news because finally the city centre might have the development that the people of the City actually want and not one that’s solely for benefit of private equity and overseas investors.
By Tracey Forrest
This optic of tight margins in the face of a tough market might be useful when the CMA consider the Weis complaint.
By Rich X
John W, 1.6% is super-high when you’re talking in hundreds of millions. I’m sure Mr Whittaker and co are still making far more than any one person could need.
By Anonymous
Nobody NEEDS any money
By Anonymous
Anon x2 – Socialism at its finest. It’s no one’s business what the personal remuneration of individuals is. What really matters is that a business which employs hundreds of people turns a strong enough profit year on year to sustain those jobs, and contribute to the growth of Greater Manchester. Not sure your friends at Labour see it the same given their crusade to build houses – don’t think you’re gonna find any developers who will build them all without making meaningful profit margins. FYI 1.6% is not a meaningful profit margin on £229m… 1.6% for Amazon, Microsoft or Apple is a different kettle of fish.
By John W
It is a razor thin margin that could easily swing to a big loss next year and doesn’t leave much cash to be reinvested into the business (without having looked in detail at their accounts).
By Anonymous