Springfield profits soar in record year for housebuilding

Left to right: Michelle Motion, Sandy Adam and Innes Smith of Springfield Properties. Picture: Stuart Wallace
Left to right: Michelle Motion, Sandy Adam and Innes Smith of Springfield Properties. Picture: Stuart Wallace
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Springfield Properties is confident of maintaining strong growth after reporting a record number of house completions in its maiden annual results since floating on the stock market.

The Elgin-based housebuilder, listed on London’s junior Alternative Investment Market since October 2017, reported a 46 per cent rise in profit before tax to 9.8 million, excluding exceptional items.

Springfield’s revenue grew by 27 per cent to £140m in the year to 31 May, with its affordable housing arm enjoying a 60 per cent sales increase. The company enjoyed a record total of 770 house completions across all divisions.

The group reported exceptional costs of £300,000 in IPO-related expenses and £300,000 related to the acquisition of Glasgow-based Dawn Homes, which has allowed it to expand into the west of Scotland. It proposed a final dividend of 2.7p per share, equating to a total annual dividend of 3.7p.

The group more than halved its net debt, to £15.3m.

Executive chairman Sandy Adam said: “We’re very pleased with the results. As you can see, everything is up except debt.”

He said the group is confident of further growth, with more than 12,000 plots across its private and affordable housing divisions, and has a dual focus on expanding its work in affordable homes and growing its village sites in Dundee, Perth, Stirling, Elgin and Livingston.

He said: “With the villages we’ve got, we’ve secured a large land bank and we’re able to develop communities and places for people to live, and they are obviously going to go on over 15 or 20 years.

“We’ve also seized upon the affordable housing that the government is trying to achieve, which is 50,000 houses in this parliament. We see that as a cornerstone for our growth.”

“Houses are affordable and there’s an undersupply of them, so we’re confident that the projections that we’ve given to the market can be achieved and we’ll continue with the growth and success that we’ve had over the last year.”

Springfield currently employs 620 staff and reported a rise of more than £2m in administrative costs, which it attributed to “investment in its future growth” and increasing employee wages.

Adam added: “20 per cent of our staff are in training and education. We’re going to continue investing in our staff and hopefully that will give us success going forward.”

John Moore, senior investment manager at Brewin Dolphin Scotland, said: “Springfield Properties has used its IPO as a foundation for future growth potential.

“What differentiates this housebuilder from many others listed on the market is its significant social housing element, which offers the potential to provide growth that is much less sensitive to traditional influences in the sector, such as interest rates and second-hand house prices.”