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Builder's maiden figures

Springfield ‘stronger than last year’, says CEO Adam

Sandy Adam- Springfield

Sandy Adam: ‘great progress’


 

House builder Springfield Properties has reported a sharp rise in profits in its first annual results since last October’s flotation on the Alternative Investment Market.

Sales increased in both the private housing and affordable housing divisions, total completions increasing by 24.2% to 770 homes (2016/17: 620).

The group significantly added to its land bank to secure growth, including 1,379 plots over six active sites and 13 future sites through the acquisition of Dawn Homes, which also expanded the group’s land bank into the West of Scotland.

In addition, the group achieved a number of milestones in the development of its Villages across Scotland.

Consolidated revenue for the year to 31 May was 27.2% higher than the previous year at £140.7m (2016/17: £110.6m).

Profit before tax increased by 37.7% to £9.2m (2016/17: £6.7m). On an adjusted basis, excluding £0.6m of exceptional items, profit before tax increased by 46.1% to £9.8m

The company has proposed a final dividend of 2.7p per share, equating to a total dividend for the year of 3.7p.

Sandy Adam, executive chairman, said: “In our first full year results since floating on AIM, I am pleased to report another year of strong growth for Springfield.

“We built more private and affordable homes than in any previous year. We made great progress with the development of our village sites and we added significantly to our strong land bank, securing future growth.

“In particular, in the final month of our financial year, we extended our geographic reach with the acquisition of Dawn Homes, who share Springfield’s core values of looking after customers and building high-quality homes.

“Springfield entered the new financial year in a stronger position than at the same point of the previous year. With an established pipeline, strengthened foundations and the long-term drivers showing no sign of abating, the board is confident of delivering strong growth for full year 2018/19 in line with market expectations.”

John Moore, senior investment manager at Brewin Dolphin Scotland, said: “Springfield Properties has used its IPO as a foundation for future growth potential. These results show what may be the first signs of this on many levels.

“What differentiates this housebuilder from many others listed on the stock market is its significant social housing element, which offers the potential to provide growth that is much less sensitive to traditional influences in the sector, such as rising interest rates and second-hand house prices.

“Springfield’s land bank is growing, which places it well for future growth, despite the potential for uncertainty in the housebuilding sector as flagged by the likes of the Governor of the Bank of England, Mark Carney.”

Financial Highlights

2017/18

£m

2016/17

£m

Change

Revenue

140.7

110.6

+27%

Gross profit margin

15.7%

15.1%

+60bps

Adjusted operating profit*

10.7

7.8

+37%

Adjusted profit before tax*

9.8

6.7

+46%

Net debt

15.3

33.2

-54%

* Adjusted to exclude exceptional items – relating to IPO and acquisition of Dawn Homes

Operational Highlights

·     Increased revenue across both Private Housing and Affordable Housing divisions

·     Completion of new homes increased by 24.2% to 770 (2016/17: 620 completions)

·     Expanded into the West of Scotland through the acquisition of DHomes 2014 Holdings Limited (trading as Dawn Homes) for a consideration of up to £20.1m

·     Strengthened 15-year land bank to 12,476 plots, including 1,379 acquired through the acquisition of Dawn Homes (31 May 2017: 9,195), 39.5% of which have planning permission

·     Gross development value (GDV) of land bank was £2.4bn (30 November 2017: £1.8bn; 31 May 2017: £1.6bn)



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