Springfield Properties assures on Scottish housing market as revenues build

Springfield Properties, the fast-growing Scottish housebuilder, said market conditions remained favourable with the demand for housing continuing to outstrip supply as it delivered an acquisition-fuelled surge in revenues.

Michelle Motion, CFO; Sandy Adam, executive chairman; and Innes Smith, CEO. Picture: Contributed

The group said it had “significantly strengthened” its geographic presence within the Edinburgh commuter belt thanks to the acquisition of Livingston-based Walker Group at the start of the year and by securing land for a new development at Gavieside, in the West Lothian town.

Unveiling a 36 per cent hike in full-year revenues to £190.8 million, chief executive Innes Smith said the firm had “delivered on all of our targets”.

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He hailed the acquisition of Walker Group and last year’s takeover of Dawn Homes for “greatly enhancing our business”, adding: “With a great product, an excellent team and sustained demand for housing in Scotland, we have established a solid pipeline and remain on track to deliver continued growth in line with market expectations.”

The results for the year to the end of May showed that adjusted profit before tax rose 69 per cent to £16.5m.

Within the group’s private housing arm, revenue grew by 40.6 per cent to £143.3m, completions were up 37 per cent to 630 homes and the average selling price nudged up 2.7 per cent to £227,000. The land bank grew to 11,511 plots, from 8,757 a year earlier.

Springfield’s affordable housing operation saw its revenues rise 15.1 per cent to £42.9m, while the average selling price increased by 10.8 per cent to £133,000. The land bank grew to 4,427 plots from 3,719 at the same stage last year.

Some housebuilders, notably those exposed to the south-east of England, have reported a softening in demand in recent months as potential homebuyers stay put amid Brexit uncertainty.

However, Springfield, which is quoted on London’s Alternative Investment Market, provided an upbeat outlook, telling investors: “The delivery of both private and affordable housing is supported by strong market drivers.

“The demand for housing in Scotland continues to outstrip supply at a time when interest rates are low and mortgage availability is good.

“House price growth in Scotland is ahead of that in the rest of the UK and the Scottish Government continues to focus on bolstering levels of affordable housing as it seeks to hit its target of building 50,000 new affordable homes by 2021.

“The group’s land bank provides activity for at least the next 16 years at current sales rates and its focus is on progressing its active sites and developing future sites,” it added.

The group is proposing a final dividend of 3.2p per share, up from 2.7p, bringing the total dividend for the year to 4.4p, a year-on-year increase of 18.9 per cent.

Executive chairman Sandy Adam said: “I am pleased to report another year of strong growth for Springfield.”