Aim flotation sees housebuilder raise £25m with IPO

Housebuilder Springfield Properties has this morning seen its shares start trading on the Alternative Investment Market (Aim), raising £25 million with the initial public offering (IPO).
Sandy Adam, executive chairman of Springfield Properties. Picture: Dan PhillipsSandy Adam, executive chairman of Springfield Properties. Picture: Dan Phillips
Sandy Adam, executive chairman of Springfield Properties. Picture: Dan Phillips

It said it generated the sum by placing 23,584,906 new shares at 106p each, capitalising the fast-growing company at £87m. The shares equate to 28.7 per cent of the firm’s enlarged share capital.

Springfield Properties, which has offices in Elgin and Larbert, last month revealed the plan to float on the junior London market with an estimated value of up to £65m as it sought to raise up to £25m for the construction of five new ­“village” housing developments incorporating a total of 10,000 homes on completion.

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It also said at the time that developing the sites, located near Edinburgh, Stirling, Dundee, Elgin and Perth, was expected to involve “significant net cash outflows” of £8m to £12m for each.

The firm was founded in 1956 by Wilfred Adam, and his grandson Sandy Adam took over in 1988.

Adam, who holds the title of executive chairman, said: “I am delighted that we have been able to bring £25m of investment into Scotland.

“This will support an increase in the number of homes we build and create new jobs. The level of support shown by our new investors on our admission to Aim is gratifying.” He added that it endorses work to create a “strong and growing” business.

“Springfield is poised to play a significant part in the delivery of the many new homes needed across Scotland.

“Our investment in the infrastructure of new villages will accelerate our building of new homes, private and affordable, in new communities.”

The firm said it offers both private and affordable housing, with the two divisions producing “two distinct revenue streams, which reduces [our] exposure to the Scottish private housing market cycle” and seeing the combination of the two as “key to long-term growth”.

Adam also cited the Scottish Government’s aim of building 50,000 affordable homes by 2021, saying this has “created an opportunity which underpins the growth of our affordable housing business.

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“We welcome our new shareholders, and look forward to updating them and the wider market as we develop our pipeline of projects and position Springfield as a leading housebuilder in Scotland.”

The firm said it has doubled in size every five years and has 500 staff. In the year to 31 May its revenue reached £110.6m from £90.8m 12 months previously, while pre-tax profit climbed to £6.7m from £5.1m.

A report published earlier this month by accountancy giant EY said Scotland could see a rise in IPO activity following the £200m Aim flotation in the summer by Glasgow-headquartered retailer Quiz Clothing. It comes after Edinburgh-based accounting software firm FreeAgent floated on Aim in November last year, raising £10.7m.