South-west housebuilder says increased cost of regulation hits profit

CG Fry has reported an 18% drop in profit which it said is due largely to increased cost of meeting regulation and a flat housing market.

The Dorset-based housebuilder and contractor, which operates from Cornwall over to Hampshire, reported pre-tax profit of £10.2m, down from £12.4m the previous year.

This is despite overall turnover rising 20%, from £122.6m to £147.2m.

The firm said: “While build cost inflation normalised during 2025, additional costs arose from new building and environmental regulations.

“House prices generally remained static during the year and the increased costs could not be recovered through higher selling prices and therefore directly reduced gross profitability.”

CG Fry increased its development turnover by 14% to £93m, which it said was due to an increase in affordable housing receipts and higher prices. It built 253 homes compared to 225 the following year.

Its contracting turnover rose by 33% to £54m and included work on large-scale commercial projects and smaller housing projects.

CG Fry placed 128th in Building’s Top 150 Contractors & Housebuilders list last year, which ranks firms by turnover.