Housebuilder Springfield Properties on solid ground

Springfield Properties, the fast-growing Scottish housebuilder, has delivered a sharp rise in half-year sales and profits and flagged further growth saying the drivers underpinning the market showed no “sign of abating”.

Michelle Motion (chief financial officer), Sandy Adam and Innes Smith. Picture: Contributed.

The Elgin and Larbert-based group, which floated on the stock market in October 2017, hailed the benefits of its acquisition of Glasgow-based Dawn Homes, which allowed it to expand into the west of Scotland.

First-half results revealed a 38 per cent hike in revenue to £75.7 million, from £54.8m a year earlier. Operating profit was up 75 per cent to £6.4m, from £3.6m, while adjusted profit before tax nearly doubled to £6.1m, compared with £3.1m the year before.

The firm is proposing an interim shareholder dividend of 1.2p per share – a year-on-year increase of 20 per cent.

Sandy Adam, executive chairman, said: “In announcing this set of interim results, I am pleased to be reporting a further period of strong growth for Springfield.

“We have increased revenue from both private and affordable existing sites, and have done this at a faster rate than for the same period last year.

“Looking forward, we have entered the second half of the year with a strong order book of contracted revenues and a greater geographic reach across Scotland.

“With the sustained market drivers showing no sign of abating, Springfield is in a stronger position than ever to deliver many of the new private and affordable homes needed in Scotland.”

Chief executive Innes Smith added: “Springfield made great progress during the first half of the year, with sales increasing in both of our divisions and total completions up 35 per cent at 379 new homes.

“Our investment last year in the acquisition of Dawn Homes and our four high calibre managing directors has greatly strengthened our business.

“We are benefiting from their complementary skillsets and experience, and we’re very pleased that all of the great people at Dawn have chosen to remain with the group. This also gives us confidence that our recent acquisition of Walker Group, another established company with a strong product and reputation, will be an equal success.

“This bulk addition to our land bank also gives us very good visibility in our three-year projections.”

The group announced the acquisition of Livingston-based Walker Group at the start of this month. Under the terms of the agreement, Springfield has paid an initial sum of £21m in cash, with a further £10m spread across several payments, subject to conditions, including the granting of planning consent for a site in Tranent, East Lothian.

The takeover is being funded from the company’s existing cash balances and borrowing facilities with Bank of Scotland. It will expand the group’s land bank and sales presence to the “high-growth” commuter belt surrounding Edinburgh, Springfield noted.

The latest results showed that sales at the firm’s affordable housing division jumped 63 per cent to £19.1m, with the completion of 145 homes. At the private housing arm, revenue was up 23.7 per cent to £53.2m, having completed 234 homes, up from 184.