Redrow deal and new expansion into Central Belt boosts Springfield profit

Innes Smith said house sales hit by mortgage limitations
Innes Smith said house sales hit by mortgage limitations
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expansion into the Central Belt and its takeover of Redrow’s Scottish operation last year has helped Springfield Properties significantly increase turnover and profits.

Springfield, which has bases in Elgin and Larbert and is now one of Scotland’s largest privately owned housebuilders, saw turnover rise 32 per cent to £53 million from £40m in the year to the end of May.

Pre-tax profits increased to £3.9m, a 56 per cent rise on last year’s £2.5m.

During the year, Springfield handed over 190 private houses and 235 affordable houses.

Managing director Innes Smith said the firm had performed “consistently well in a challenging market”.

He said house sales were still being curbed by problems with mortgage availability but that had been alleviated to some extent with the introduction of the MI New Home mortgages scheme organised by the Scottish Government and industry body Homes for Scotland.

“The scheme has brought new customers into the market and the first few sales have already come through the system,” said Smith.

The company has 25 active sites throughout Scotland and expects more to come on stream next year.

Springfield bought Welsh builder Redrow’s Scottish operation in July 2011 in a £49m deal it described at the time as “transformational”.

Under the agreement, Springfield, founded in 1956, paid Redrow £5m up front with the £44m balance in instalments over three years as housing developments are sold.