Springfield well placed as Scottish construction sites prepare to reopen

Housebuilder Springfield Properties, Scotland’s only listed housebuilder, is strongly positioned to benefit from a resumption of non-essential construction activity north of the Border, analysts have said.

Innes Smith, the chief executive of Springfield Properties, outside one of the firm’s show homes.

In a note on the group’s prospects, Progressive Equity Research highlighted the Scottish housing market’s “strong fundamentals” and pointed to the pent-up demand from potential buyers during lockdown.

Alastair Stewart, an analyst at the firm, noted: “Scotland’s First Minister Nicola Sturgeon has signalled that housing and construction would be two of the sectors that can be released from the country’s lockdown earliest.

“We see this as a positive for Springfield, Scotland’s only quoted housebuilder. Although precise details on timing have still to be finalised, experience in the rest of the UK suggests housing demand could revive quickly and that developers could rebuild production quickly towards pre-lockdown levels.”

He added: “We believe the Scottish housing market offers significant growth in volumes and prices, due to relative under-supply and affordable pricing.

“Springfield’s proactive multi-tenure approach was strengthened by the recent collaboration with Sigma Capital, which offers growth with modest capital requirement.”

Springfield Properties is a research client of Progressive Equity Research.

Last month, the housebuilder agreed an additional £18 million of financing as it awaited a decision on when it can reopen its sites in Scotland.

The group said in a coronavirus-related trading update that in light of the current situation it had sealed an extra £18m under its lending facility with Bank of Scotland. It increases the total credit facility to £85m.

Springfield said it had temporarily closed down all of its sites under construction and its kit factory, as well as closing its sales and administrative offices to the public with employees working from home wherever possible.

Chief executive Innes Smith said: “Throughout the Covid-19 pandemic our first priority has always been the health and safety of our workforce.”

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