Sustained demand keeps Springfield on track for significant growth
Springfield Properties said it remains on track for significant full year growth after posting interim results that revealed excellent build and sales activity across the business.
Announcing its interim results for the six months ended 30 November 2021, the housebuilder said it effectively managed cost and supply chain pressures with gross margins maintained when excluding the impact of regional and housing mix in private and affordable housing respectively.
Springfield’s latest half-year revenue was £87.7 million compared to £94.4m from the first half of 2021, although the previous figure was boosted by sales from completions that had been scheduled for the end of FY 2020, but delayed due to the public lockdown. Private housing revenue of £47.3m (H1 2021: £71.9m) and record affordable housing revenue of £31.7m (H1 2021: £18.3m) both contributed to the results.
A total of 197 private homes were completed during the period (H1 2021: 299), reflecting the more normal seasonal phasing of completions across the financial year, with a record order book to be delivered in H2 following strong sales in the period. Eight new private developments commenced completions post period.
In the affordable housing sector, 204 homes were completed (H1 2021: 126) reflecting delivery against the group’s substantial contracted affordable order book. Springfield said it is on track to deliver a record year in affordable housing, with year-on-year revenue expected to increase by approximately 35%.
In contract housing, where the group provides development services to third party private organisations, 58 homes were delivered (H1 2021: 18).
Planning approval was received for 240 homes during the period and the proportion of land bank with planning permission was 51.6% (31 May 2021: 52.4%). Post period, the firm submitted a planning application for a new, large development of up to 1,000 homes in the Edinburgh commuter belt.
Springfield’s total land bank was 15,308 plots at period end (31 May 2021: 15,281) with a Gross Development Value of £3.1 billion (31 May 2021: £3.1bn).
Also post period, Springfield said its acquisition of Tulloch Homes is set to accelerate growth, enhance earnings and strengthen the company’s foothold in an area of high demand.
Innes Smith, chief executive officer of Springfield Properties, said: “This was a strong period for Springfield. We continued to experience high demand across the business and our total order book grew to a record level. We maintained excellent build activity, setting us up for an outstanding second half of the year – with handovers starting on eight new private sites since period end.
“I am pleased at how we effectively managed the material and supply chain pressures facing our industry, and that we were able to maintain impressive levels of customer satisfaction. Sustainability continued to be a focus. We’re proud that we already deliver over 90% of our homes off-site from timber kits, and we will be setting benchmarks for further measures across operations in our ESG strategy later this year.
“We entered the second half on track for strong growth for FY 2022 in line with market expectations. This confidence is based on homes completed, reserved and missived, and our highest ever revenue in affordable housing, giving us significant visibility over our revenue forecasts. Our position was further strengthened, post period, with the acquisition of Tulloch Homes.
“This enhances our foothold in the Highlands, an area of strategic importance, and will accelerate our growth, being earnings enhancing from the current year. Supported by long-term market drivers and with demand continuing to outstrip supply, the Board continues to look to the future with great confidence and to delivering sustainable value for all of our stakeholders.”