Springfield, new town builder, hits record £215m

Shares of Elgin-based Springfield Properties, which is building a number of new communities throughout Scotland, rose about 4% on Thursday as it published a trading update for the year ended May 31, 2021.

Springfield said full year 2020-21 revenue is expected to be approximately £215 million, representing year-on-year growth of 49% and the group’s highest ever annual turnover.

The company said it expects a “substantial” increase in profit before tax, in line with recently upgraded market expectations.

Net debt reduced to £21 million at year end — a £50 million reduction compared with £71 million at May 31, 2020.

Springfield saw strong build and sales activity throughout the year with high demand experienced across the business,” said the Elgin firm.

“This resulted in significant growth in revenue in private and affordable housing, ahead of market expectations set at the beginning of the year, with private housing continuing to be the largest contributor to group revenue.

“In addition, and as previously announced, at the end of the year, the group made strategic land sales, which were material in nature, across two of its large developments in the Central Belt to two national housebuilders.

“As a result, the group expects to report revenue for full year 2020/21 of approximately £215m and profit in line with recently upgraded market expectations, reflecting significant year-on-year growth.

“The group also substantially reduced net debt to approximately £21m at 31 May 2021 compared with £71m at the same point of the prior year.

In private housing, the group achieved excellent sales at its developments across Scotland, reflecting the increased desirability for the type of housing the group offers.

“The Group provides homes that are larger, with space for home offices and with gardens, which are in semi-rural locations.

“In particular, completions at Springfield’s Linkwood Village in Elgin and at three developments launched under the group’s Dawn Homes and Walker Group brands made an important contribution to the revenue growth in private housing.   

In affordable housing, the group delivered a substantial increase in revenue and completions in the second half of the year over the first half, representing significant growth for the full year over 2019/20.

“The group also signed contracts for, and commenced work on, multiple new affordable developments that are due to be delivered in the current year.

“This progress is supported by the continued commitment of the Scottish Government to the delivery of affordable housing, with over £3.4bn earmarked for affordable housing funding through to March 2026 (as announced in February 2021).”

Springfield Properties CEO Innes Smith said: “This has been an excellent year for Springfield.

“We have achieved our highest ever annual revenue – exceeding £200m for the first time – based on significant growth in both our private and affordable housing.

“We have substantially reduced our net debt position, demonstrating our ability to generate cash, and our strategic land sales towards the end of the year reflect our capacity to realise value from our large, high-quality land bank.  

“A key driver of our growth has been the greater popularity of the spacious homes that we provide, with private gardens and easy access to surrounding greenspace, particularly at our Village developments.

“At the same time, there continues to be a chronic undersupply of housing of all tenures across Scotland.

“Thanks to the strength of our offer and of our partnerships, which will now include the delivery of homes for the Private Rented Sector, we are exceptionally well-positioned to help meet this housing demand and provide great places for people to live, building quality homes and creating sustainable communities.”