Record turnover expected at Springfield Properties
Increased sales in private and affordable housing coupled with a contribution from strategic land sales have driven an expected year-on-year revenue growth of 49% for Springfield Properties.
In a trading update for the year ended 31 May 2021, the housebuilder said its full year 2020/21 revenue is expected to be approximately £215 million, representing the group’s highest ever annual turnover, as well as a substantial increase in profit before tax, in line with recently upgraded market expectations.
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.
Springfield saw strong build and sales activity throughout the year with high demand experienced across the business. 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.
In private housing, the group achieved excellent sales at its developments across Scotland. 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.
Innes Smith, CEO of Springfield Properties, 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.
“At Springfield, sustainability has always been at our core and we are proud of our Group’s performance in relation to ‘people’ and the ‘planet’ as much as we are ‘profit’. Following the identification of a board member to lead on ESG, we look forward to sharing how we intend to formalise our approach to sustainability with our full results in September.”
The group will provide further details in its final results announcement in September.