Springfield Properties reports record order book

Elgin-based Springfield Properties, Scotland’s only listed house builder, has reported a record order book despite revenue and profit before tax declining in the six months ended November 30, 2021.

And following the post-period acquisition of Inverness-based Tulloch Homes, Springfield said it is on track to deliver its highest ever annual revenue.

Springfield, which is building a number of new communities throughout Scotland, said first-half revenue fell to £87.3 million from £94.4 million and profit before tax slipped to £6.2 million from £8.6 million.

However, Springfield said results in the first half of the previous year reflected additional sales from completions rolled over due to Covid-19.

Springfield declared an interim dividend of 1.5p per share, up from 1.3p.

In its outlook, the company said: “Springfield entered the second half of the financial year with substantial work-in-progress for delivery in H2 and with excellent visibility over full year revenue forecasts based on homes delivered, contracted (missived and affordable contracts) and reserved.

“The group also entered the second half with a record total order book.

“The group’s position was further enhanced with the acquisition of Tulloch Homes – strengthening the group’s foothold in an area of strategic importance and further accelerating growth.

“Accordingly, the group is on track to deliver its highest ever annual revenue.

In particular, the group continues to expect a significantly increased contribution to revenue from affordable housing, which is on track for a record year.

“In private housing, the group anticipates delivering strong growth, reflecting the same level of private housing sales year-on-year (despite the beneficial contribution to FY 2021 from the large number of homes that were rolled over due to the pandemic) on an underlying basis and bolstered by the contribution from Tulloch Homes.

“Revenue from contract housing is also expected to increase, supported by the generation of revenue from PRS housing this year.

The group is experiencing excellent demand across the business, which is supported by strong market drivers in private and affordable housing.

“There remains an undersupply of housing in Scotland and the desirability of the type of housing Springfield offers has increased.

“There is good mortgage availability and the Scottish Government has restated its commitment to investing in the delivery of more affordable homes. 

The group is well-positioned to manage the moderate inflationary cost pressures that are being experienced across the industry thanks to its robust supply chain, with a high proportion of materials being procured directly.

“The group also continues to expect house price inflation to absorb any increased build costs this year.

As a result, the board remains confident of delivering growth for the full year in line with market expectations.”

Springfield said that post period it submitted a planning application for a large development of up to 1,000 homes in Edinburgh commuter belt and that it had a total land bank of 15,308 plots at period end with gross development value of £3.1 billion.

Springfield Properties CEO Innes Smith 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.”