Springfield, Scots new town builder, sees shares soar

Shares of Elgin-based Springfield Properties, which is building a number of new communities throughout Scotland, have risen about 15% in the past few days thanks to “greater market certainty” since the UK general election and a positive trading update on Tuesday.

Springfield, building new communities from Polbeth to Perth, saw its shares rise another 3% on Tuesday to trade around 130p — giving the firm a current stock market value of roughly £125 million.

Helped by the acquisition of Walker Group, Springfield said it expects to report revenue growth and improvement in gross margin for the first half of 2019-20 in line with management’s expectations.

In a trading update for the six months ended November 30, 2019, Springfield said: “As noted in the full year 2018/19 results announcement, Springfield entered the current financial year in a strong position, experiencing good growth across the business, supported by sustained market drivers.

“This momentum was maintained through the first half of 2019/20, with an increase in completions and revenue in both private and affordable housing.

“As a result, and with the contribution from Walker Group, which was acquired in H2 2018/19, the group expects to report revenue growth and improvement in gross margin for the first half of 2019/20, in line with management’s expectations.

“Springfield’s Village developments have progressed well, and their appeal is strengthening as they become increasingly established, adding further amenities for residents.

“This includes the opening of Bertha Park Secondary School (in Perth), the first new secondary school to be established in Scotland for more than 15 years, and a sports centre at Linkwood, Elgin.

“At the group’s most advanced Village developments, Dykes of Gray (near Dundee) and Bertha Park, management estimate that, in total, more than 600 people have moved into the new homes to date. 

“During the period, Springfield expanded its geographic presence with the strategic land acquisition of a private housing development in Inverness, strengthening the group’s reach in the Highlands.

“The group also continued to make good progress in affordable housing, including under its local authority framework agreement for 10 affordable-only developments, with the completion of one development and beginning construction on two others, as well as a third affordable development (outside the framework agreement) also commencing during the period.  

“Walker Group and Dawn Homes continued to trade in line with management’s expectations and the group is pleased with the progress made to date in embedding these acquisitions.

“In addition, the group achieved a key milestone, as announced on 25 September 2019, with the entry into a collaboration agreement with Sigma PRS Management Ltd to acquire and develop sites in Scotland for PRS (private rented sector).

“This represents Springfield’s first partnership for PRS and the board expects it to accelerate Springfield’s delivery of homes and provide a further revenue stream, alongside its existing private and affordable housing activity.”

Springfield Properties CEO Innes Smith said: “We’re pleased to have achieved another period of growth resulting from sustained progress across our business as we continue to deliver on our targets.

“Our acquisitions are performing well and we are excited about the new opportunities offered by our partnership with Sigma.

“The UK is entering a period promising greater market certainty, which will benefit our customers, our suppliers and our business.

“This, combined with a land bank providing work for at least 16 years and a skilled and dedicated workforce, gives us continued confidence in our future prospects and in achieving our goals.” 

About the Author

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.