The Ellon-based housebuilder has been hit by a sharp downturn in the new-build market and the costs of a major restructuring programme.

Revenue fell 23% to £38.9m, with weaker demand and tougher trading conditions weighing on sales across the north of Scotland.

A £6.5m write-down against the value of the company’s land bank accounted for a significant portion of the loss, though chairman Gary Gerrard described this as a technical accounting adjustment rather than a cash loss, noting that Scotia’s long-standing policy of valuing land at current market prices helps keep its balance sheet current.

Mr Gerrard said the results reflected an “extremely challenging” market, citing the cost-of-living squeeze, geopolitical uncertainty and the prospect of rising interest rates as factors dampening buyer demand. First-time buyers are struggling to raise deposits, he added, while growing families and downsizers are finding it difficult to sell existing homes.

In response, the company launched a restructuring programme focused primarily on head office roles, reducing its workforce from 181 to 153 through 25 redundancies and closing offices in Balmacassie, Ellon and Forfar. The changes are expected to deliver annual savings of around £2m. Mr Gerrard described the job losses as “regrettably necessary” to safeguard the business.

Managing director Richard Begbie told The Press and Journal the company had refocused its operations around four core developments in Aberdeen and the north-east, Highland and Tayside. Scotia has used incentives including part-exchange, assisted sales and mortgage subsidies to support transactions during the downturn.

Despite the headline loss, the company said its balance sheet remains strong. It reduced bank debt during the year and extended its credit facility with the Bank of Scotland to March 2027, while continuing to invest in its land bank with shareholder support.

Looking ahead, Scotia is preparing to launch new developments at Cromleybank in Ellon and Wester Inshes in Inverness. Mr Gerrard said the business was “uniquely positioned” to benefit from any market recovery, though he cautioned that conditions remain difficult, saying “it’s still a very challenging newbuild market”.