Scottish housebuilder Springfield hails record reservations in first week after lockdown

Springfield Properties, Scotland’s only listed housebuilder, has reported record reservations from home buyers after its sites reopened following the easing of lockdown restrictions.
Innes Smith is the chief executive of Scottish housebuilder Springfield Properties.Innes Smith is the chief executive of Scottish housebuilder Springfield Properties.
Innes Smith is the chief executive of Scottish housebuilder Springfield Properties.

In a trading update to investors the group also said it had maintained a “robust” financial position throughout the pandemic.

Construction activity has now resumed on every building site, along with all sales offices reopening on 29 June with safe-working protocols in place.

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Springfield said the number of reservations received in the first week following the reopening was the highest ever recorded in a one-week period, and “substantially higher than normal” for this time of year.

The group has also begun handing over homes that were nearing completion prior to lockdown. As a result, it expects sales in the first quarter of its new financial year to be “significantly higher” than the equivalent period last year.

In addition to the recent reservations, the firm’s order book of contracted revenue currently stands at some £110 million. This includes £44m of largely constructed private housing, much of which was due to be handed over to clients in April and May.

These homes are contracted under the Scottish missive system, Springfield noted, and the group has only had one cancellation since lockdown.

It added: “Whilst the group anticipates robust sales for Q1 2020/21, and is experiencing a strong increase in demand, performance for the remainder of the year is reliant upon operations remaining open with no further Covid-19 disruption.”

Ahead of its full-year results announcement, due in October, the company said it now expects to report revenue of about £144m, which would be down from £190.8m in 2018/19. It also expects to report an improvement in gross margin and profit before tax of “at least £9m”, compared with £16m the year before.

Chief executive Innes Smith said: “Our priority has always been – and remains – the health and safety of our workforce and customers, and we have taken important measures to protect this. Nonetheless, after several months of closure, we are delighted to have reopened to a record week of reservations – reflecting pent up demand and increased desirability for the type of private housing Springfield offers.

“Multiple industry reports have commented on the shifting interests of homeowners as a result of lockdown, with people wanting larger homes, with gardens, located within commuting distance of cities, which is the kind of developments we create.

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“At the same time, the shortage of affordable housing in Scotland has become even more acute.”

Alastair Stewart, an analyst at Progressice Equity Research, noted: “We believe that, once the logistical obstacles from coronavirus normalise, the Scottish housing market should offer significant growth in volumes and prices, due to relative under-supply.”

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