Springfield Properties hails sustained growth and ‘strong’ gross margin improvements

Scottish housebuilder Springfield Properties said today it remains confident of achieving growth in line with management expectations after reporting increased sales, profit and margin.

Springfield Properties hails sustained growth and ‘strong’ gross margin improvements

Innes Smith

Interim financial results for the six months ended 30 November 2019 revealed revenues at the AIM-listed developer rose 5.4% to £79.8 million while pre-tax profit is up 3.4% to £6.3m.

New home completions increased by 15.6% to 438 (H1 2018/19: 379) and the company’s proportion of land bank with planning permission increased to 30.1% (31 May 2019: 28.4%).

Springfield added that acquisitions are “driving strong margin improvement” and it welcomed an expanded geographical presence with strategic land acquisitions in Inverness.

Highlights included:

Private Housing Delivery

  • Revenue increased by 7.3% to £57.1m (H1 2018/19: £53.2m)
  • Completions grew by 10.3% to 258 homes (H1 2018/19: 234)
  • Excellent progress on Village developments, with key highlights including:
    • Advanced planning on Springfield’s largest development, Durieshill, Stirling – with consent (subject to completing a Section 75 agreement) granted post period for 3,042 homes
    • Launched sales at third Village development, Linkwood, Elgin, with strong demand
    • Opening of Bertha Park Secondary School at Bertha Park, Perth: the first entirely new secondary school to be established in Scotland for more than 15 years

Affordable Housing Delivery

  • Revenue increased by 15.8% to £22.2m (H1 2018/19: £19.1m)
  • Completions grew by 24.1% to 180 homes (H1 2018/19: 145)
  • Completed handovers at first development under local authority framework agreement for 10 affordable home-only developments, and commenced construction on two new developments
  • Commenced handovers, which completed post period, to local housing association of 54 affordable homes at Bertha Park, Perth – the first affordable housing at a Village development
  • Planning consent received for 237 affordable homes at Dalmarnock, Glasgow, and 139 affordable homes at The Wisp, Edinburgh

Innes Smith, chief executive officer of Springfield Properties, said: “We are pleased to have achieved another period of growth resulting from progress across our business and, in particular, delivering strong improvement in gross margin. Our acquisitions are performing well and we are realising benefits group-wide.

“We continued to expand geographically with strategic land purchases in Inverness and we made good progress in advancing our developments through the planning system, including receiving consent, post period, for over 3,000 homes at Durieshill, Stirling – the largest detailed planning consent to ever be granted in Scotland.

“Looking ahead, we entered the second half with a strong order book and we are experiencing good growth across the business. Alongside our customers, we are benefitting from the UK having entered a period promising greater market certainty – with an increase in the reservation rate since December.

“We are also pleased to now be selling homes at three of our Villages and are excited about the opportunities in the private rented sector offered by our partnership with Sigma. Consequently, we remain confident of achieving growth for the full year in line with management expectations and are pleased to have declared an interim dividend 17% above last year.”

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