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 as “difficult trading conditions” continued to have an impact on profits.

The company reported £92.9m in turnover to February 4 2024, down slightly from the previous year’s £93.3m. It reduced their staff numbers to 211, from 238, during the same time period.

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 it will build more single-level houses in its new developments.

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.

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

“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 mortgage rates, high inflation and the cost-ofliving crisis, all of which have dented customer confidence.

“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 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.”

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 has seen a continued profitability, albeit the slowdown in the housebuilding sector has resulted in reduced margins and turnover.

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