Springfield enjoys ‘significant’ growth in private and affordable housing revenue
Springfield Properties has reported a 50% increase in revenue and an 81% rise in profit thanks to private and affordable housing sales boosts coupled with a contribution from strategic land offloads.
Announcing its final results for the year ended 31 May 2021, the housebuilder said the “significant” growth in revenue in private and affordable housing was the result of “strong” build and sales activity throughout the year with high demand experienced across the business.
Revenue rose 51% to £216.7 million from £143.5m in 2020 while operating profit rose 75.2% to £19.8m from £11.3m. Profit before tax was up 81.4% to £18.5m from £10.2m.
Total completion increased to 973 homes (2020: 727), while the realisation of work in progress and strategic land sales enabled substantial reduction in net debt to £20.8m at 31 May 2021 from £70.9m at 31 May 2020
Springfield also enjoyed sustained progress in advancing land bank with planning approval received for 609 homes during the year and the proportion of land bank with planning permission increasing to 52.4% (31 May 2020: 49.4%).
In its delivery of private housing, Springfield’s revenue increased 46.2% to £144.6m (2020: £98.9m) with 593 completions (2020: 419).
The firm said the growth was driven by completion of homes originally scheduled to be delivered at the end of the prior year but postponed due to COVID-19 lockdown; and increased desirability of the type of larger housing with plenty of greenspace that the group offers.
Continued progress was made on its Village developments, with key highlights including:
- Advancing of community facilities, including the opening of convenience stores at Bertha Park, Perth and Dykes of Gray, Dundee
- Commenced construction on second phase of private homes at Bertha Park
- Planning approval received for PRS homes at Bertha Park and work commenced on site.
Affordable housing revenue increased by 29.7% to £55.1m (2020: £42.5m) with 380 completions (2020: 308). Springfield said it was active in securing new contracts with an order book of £91.5m as at 31 May 2021 – its largest ever contracted order book for affordable housing.
Construction commenced at The Wisp, Edinburgh – a 104-home development – and on the first phase of 144 homes at Dalmarnock, Glasgow under agreements worth £18.5m and £18.2m respectively. Progress also continued under the local authority framework agreement with Moray Council for 10 affordable-only developments with four developments now completed.
Springfield also handed over the second phase of affordable housing at Bertha Park Village, post period, and signed a contract to deliver the first Mid-Market Rent housing at the Village.
New contracts were signed with Berwickshire Housing Association and, post period, Aberdeenshire Council.
Innes Smith, chief executive officer of Springfield Properties, said: “This has been an excellent year for Springfield. We have achieved our highest ever annual revenue and profit - exceeding £200m in revenue for the first time and by a significant amount - based on record results in both our private and affordable housing.
“We have substantially reduced our net debt position, demonstrating our ability to generate cash, and our strategic land sales towards the end of the year reflect our capacity to realise value from our large, high-quality land bank. I am also pleased that we have been able to maintain high levels of customer satisfaction and we have continued to take steps to improve our build quality, process and the sustainability of our business.
“Looking ahead, we entered the new financial year delivering against a significant order book, with excellent visibility over full year revenue. We are receiving sustained demand across the business supported by low interest rates, a competitive mortgage market and a prevailing shortage of homes across all tenures. In particular, this year we expect a significant increase in the contribution to revenue from affordable housing where we are delivering against a record order book.
“Our growth will also be supported by our first revenue from PRS housing and continued progress in private housing. As a result, on an underlying basis (excluding the contribution from land sales) we expect to report strong growth for the full year, in line with market expectations. Consequently, the Board continues to look to the future with confidence and to delivering sustainable value for all of our stakeholders.”