Springfield Properties revenue up 36% to £191m

Shares of Springfield Properties, which is building a number of new towns and villages throughout Scotland, rose about 5% on Tuesday after it said its revenue increased 36% to £190.8 million in the year to May 31.

Elgin-based Springfield said adjusted profit before tax rose 69% to £16.5 million as it proposed a final dividend of 3.2p per share, bringing the total for the year to 4.4p — an 18.9% increase.

Springfield said its completion of new homes increased 23.6% to 952 and it expanded its 16-year land bank to 15,938 plots, 28.4% of which have planning permission.

Its gross development value (GDV) of land bank at May 31 increased to £3.2 billion from £2.4 billion.

Springfield said it significantly strengthened its geographic presence in the Edinburgh commuter belt with the acquisition of Livingston-based Walker Group and by securing land for a new village at Gavieside near Polbeth.

In its outlook, Springfield said: “The demand for housing in Scotland continues to outstrip supply at a time when interest rates are low and mortgage availability is good.

“House price growth in Scotland is ahead of that in the rest of the UK and the Scottish Government continues to focus on bolstering levels of affordable housing as it seeks to hit its target of building 50,000 new affordable homes by 2021.”

Springfield Properties chairman Sandy Adam said: “I am pleased to report another year of strong growth for Springfield.

“We increased our revenue from both private and affordable housing, and achieved significant improvement in gross margin.

“We expanded our geographic presence and scale and made great progress with our Village developments, with the most advanced strengthening in appeal as they become increasingly established new communities.

“Throughout our history, Springfield’s strategies have been designed to secure growth and future-proof the business.

“We have been successful in achieving this in the past and this continues to be our focus for the future.

“With our strong land bank of nearly 16,000 plots, the progress that we’re making with our Village developments and sustained market drivers, we are well-positioned for continued growth.”

Analysts at Peel Hunt moved their recommendation on Springfield’s stock from “hold” to “add”, writing: “A good set of results, with adjusted PBT up 69% to £16.5m.

“Of note, group gross margin was up 230bp, driven predominantly by performance of the private housing division …

“We continue to like the defensive qualities of the Affordable division and strong growth profile of the group.

“Share price underperformance vs the sector ytd presents an attractive entry point.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.