Scottish homes builder Springfield says UK has entered period 'promising greater market certainty'

Springfield Properties chief executive Innes Smith outside a Motherwell show home. Picture: Contributed

Releasing results for the six months to the end of November, the group said it had increased sales, profits and margins and was on track to achieve growth for the full year in line with market expectations.

It highlighted a number of achievements in the first half, including expanding its geographical reach with strategic land acquisitions in Inverness and making “excellent progress” on its “village” developments.

That included advanced planning on the firm’s largest development, Durieshill, Stirling, with consent granted post-reporting period for more than 3,000 homes.

The first half also saw the opening of Perth’s Bertha Park Secondary School – the first new high school to be established in Scotland for more than 15 years.

Overall revenue was up 5.4 per cent to £79.8 million, profit before tax nudged up 3.4 per cent to £6.3m and operating profit jumped 14.9 per cent to £7.3m. Gross margin lifted to 19.9 per cent from 17.2 per cent a year earlier.

Shareholders are set to pocket an interim dividend of 1.4p per share, up 16.7 per cent year-on-year.

Progress

Chief executive Innes Smith told investors: “We are pleased to have achieved another period of growth resulting from progress across our business and, in particular, delivering strong improvement in gross margin.

“Our acquisitions are performing well and we are realising benefits group-wide. We continued to expand geographically with strategic land purchases in Inverness and we made good progress in advancing our developments through the planning system, including receiving consent, post period, for over 3,000 homes at Durieshill, Stirling – the largest detailed planning consent to ever be granted in Scotland. Looking ahead, we entered the second half with a strong order book and we are experiencing good growth across the business. Alongside our customers, we are benefiting from the UK having entered a period promising greater market certainty – with an increase in the reservation rate since December.”

Meanwhile, hundreds of new family homes for rent are also to be built across Scotland thanks to a partnership deal struck between Springfield and Sigma Capital Group, the Edinburgh-based residential development and urban regeneration specialist. The deal, outlined last September, saw five cities initially targeted – Dundee, Edinburgh, Inverness, Perth and Stirling.

Under the agreement, Springfield will build family homes for Sigma’s PRS property platform, with the majority of them to be built in the former’s village developments.

Smith said: “We are pleased to now be selling homes at three of our villages and are excited about the opportunities in the private rented sector offered by our partnership with Sigma.

“Consequently, we remain confident of achieving growth for the full year in line with management expectations,” he added.