Springfield Properties goes from strength to strength with near 50% profits boost
Housebuilder Springfield Properties said it is confident of delivering continued strong growth in line with market expectations after reporting a sharp rise in sales and profits.
Announcing in its maiden annual results following its listing on AIM in October 2017, the Elgin-based firm said profits before tax increased by 46.1% to £9.8 million with revenues rising by 27.2% to £140.7m.
Springfield completed 770 homes in the year to 31 May, up by 24.2% on the previous year. Rising house prices also helped the average achieved reach £221,500, up by more than 12%.
Increasing its revenue across both private housing and affordable housing divisions, the group also expanded into the West of Scotland through the acquisition of Dawn Homes for a consideration of up to £20.1 million.
The company’s land bank increased by 35.7% to 12,476 plots, the equivalent of 15 years of activity at current sales rates, including 1,379 plots over six active sites and 13 future sites through the Dawn Homes acquisition.
As well as strong growth in its private housing division, its affordable housing arm secured a framework agreement with a local authority for 10 developments over the next three years, worth an estimated £45m.
Other highlights include planning consent for 981 affordable plots and land secured for 12 new affordable housing-only developments, including the submission of a planning application for 237 homes in Dalmarnock.
In addition, the group achieved a number of “significant” milestones in the development of its ‘Villages’ developments across Scotland.
Sandy Adam, executive chairman of Springfield Properties, said: “In our first full year results since floating on AIM, I am pleased to report another year of strong growth for Springfield. We built more private and affordable homes than in any previous year. We made great progress with the development of our Village sites and we added significantly to our strong land bank, securing future growth. In particular, in the final month of our financial year, we extended our geographic reach with the acquisition of Dawn Homes, who share Springfield’s core values of looking after customers and building high-quality homes.
“As we look to the future, I would like to thank those who have enabled us to reach this point. In particular, I would like to thank all of our 593 staff for their hard work and dedication, and I would like to welcome the Dawn Homes team, a strong addition who will ably develop our business in the West of Scotland. Springfield entered the new financial year in a stronger position than at the same point of the previous year. With an established pipeline, strengthened foundations and the long-term drivers showing no sign of abating, the Board is confident of delivering strong growth for full year 2018/19 in line with market expectations.”
John Moore, senior investment manager at Brewin Dolphin Scotland, said: “Springfield Properties has used its IPO as a foundation for future growth potential. These results show what may be the first signs of this on many levels: a 27% increase in revenue to £140.7m, operating profit is up 37% to £10.7m, and debt has been cut by more than half to £15.3m.
“What differentiates this housebuilder from many others listed on the stock market is its significant social housing element, which offers the potential to provide growth that is much less sensitive to traditional influences in the sector, such as rising interest rates and second-hand house prices. Springfield’s land bank is growing, which places it well for future growth, despite the potential for uncertainty in the housebuilding sector as flagged by the likes of the Governor of the Bank of England, Mark Carney.”