Scottish housebuilder Springfield Properties seals bumper takeover of Highland peer Tulloch Homes

Springfield Properties has undertaken its third acquisition since floating on the stock market in 2017 after agreeing a £56 million-plus deal for Highlands housebuilder Tulloch Homes.

Bosses at Springfield, which is Scotland’s only quoted housebuilder, described Inverness-based Tulloch as a “profitable, cash generative and well-run housebuilder”.

They said the deal would enhance the company’s foothold “in an area of high demand in Scotland”, and where Springfield has been organically building a presence in recent years. It is set to strengthen the group’s private housing land bank and “create opportunity for affordable housing”.

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Springfield, which is listed on the Alternative Investment Market, is raising some £22m from shareholders to partially fund the acquisition.

Sandy Grant (Tulloch Homes managing director), Innes Smith (Springfield chief executive) , Sandy Adam (Springfield chairman) George Fraser (Tulloch Homes). Picture: Ewen Weatherspoon
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Chief executive Innes Smith said: “This is another great acquisition for Springfield - and our third since coming to the market in 2017.

“Tulloch Homes has an excellent reputation for building high-quality homes in the Scottish Highlands in and around Inverness. This is an area of high demand where we have been organically building a presence in recent years.

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“As a result, it will significantly strengthen our foothold in an area of strategic importance and accelerate our growth, being earnings enhancing from the current year.”

He added: “We welcome all of the Tulloch Homes employees to the Springfield group and we look forward to working together to continue to grow our business.”

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Under the terms of the deal, the firm is paying a net £56.4m for the business, reflecting a gross consideration of £77.6m, less expected net cash in the Tulloch Homes business, on completion, of not less than £21.2m.

Springfield, which operates out of offices in Elgin and Larbert, with developments in various locations across the country, has previously acquired Livingston-based Walker Group and Glasgow-based Dawn Homes.

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Updating investors on current trading, the group reported good reservations in private housing while continuing to deliver against its record order book in affordable housing.

That follows September’s results which revealed revenues of £216.7m for the year to the end of May, up 51 per cent from a year earlier.

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Operating profit jumped 75.2 per cent to £19.8m while profit before tax was up 81.4 per cent to £18.5m.

The board recommended a final dividend of 4.45p per share, bringing the total dividend for the year to 5.75p, up from 2p.

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The firm, which had flagged turnover of more than £200m in July, pointed to strong build and sales activity throughout the year with high demand experienced across the business resulting in “significant growth” in revenue within its private and affordable housing divisions.

Total completions increased to 973 homes, up from 727 the year before.

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Meanwhile, Tulloch Homes recently said it was eyeing fresh land acquisitions as it looked to meet “pent-up demand” in the region and beyond. The firm said in September that prospective land deals were being examined in the Black Isle and Drumnadrochit, as well as a couple of sites in the Central Belt.

Several housebuilders have reported changing demand patterns in the wake of the pandemic and lockdown restrictions forcing more people to work from home.

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