Well-positioned for growth
Springfield enjoys ‘strong position’ and 73% lift in profits
Sandy Adam: strong growth
Housebuilder Springfield Properties said it had entered the 2019/20 financial year in a stronger position than ever before, with a presence across Scotland and an enhanced operational structure.
The group’s land bank provides activity for at least the next 16 years and continues to see good growth across the business.
It said 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.
The company said 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.
Commenting after announcing a 73.3% rise in pre-tax profits, Sandy Adam, executive chairman, described it as “another year of strong growth for Springfield:”
He said:. “We increased our revenue from both private and affordable housing, and achieved significant improvement in gross margin. We expanded our geographic presence and scale and made great progress with our Village developments, with the most advanced strengthening in appeal as they become increasingly established new communities.
“Throughout our history, Springfield’s strategies have been designed to secure growth and future-proof the business. We have been successful in achieving this in the past and this continues to be our focus for the future.
“We are well-positioned for continued growth.”
Innes Smith, chief executive added: “This was another great year for Springfield as we delivered on all of our targets and strengthened our ability to deliver sustained growth.”
Profit before tax for the year to the end of May increased by 73.3% to £16m (2017/18: £9.2m). On an adjusted basis, excluding £0.6m of exceptional items in both 2018/19 and 2017/18 respectively, profit before tax increased by 69.2% to £16.5m (2017/18: £9.8m).
Revenue was 35.6% higher than the previous year at £190.8m (2017/18: £140.7m). Growth was primarily driven by the 40.6% increase in revenue from private housing, which remained the largest contributor to group revenue, accounting for 75.1% of total sales.
There was growth in revenue from affordable housing of 15.1% as well as an increase in other income, largely relating to the recognition of revenue from the sale of land under a land swap with a major housebuilder, to exchange 62 plots at Dykes of Gray for land in Kinross.
The board is recommending a final dividend of 3.2p per share (2017/18: 2.7p) with an ex-dividend date of 31 October and a payment date of 18 November 2019. This brings the total dividend for the year, including the interim dividend already paid, to 4.4p per share (2017/18: 3.7p), an 18.9% increase over the previous year.