Progress for housebuilder
Springfield benefiting from greater market certainty
Innes Smith: ‘progress across the business’
Springfield Properties has begun its second half with a strong order book and is experiencing good growth across the business, it said in interim figures showing a 3.4% rise in pre-tax profit to £6.3 million (2018: £6.1m).
The company, active mainly in the north of Scotland, is benefiting from greater market certainty, said Innes Smith, chief executive.
Completion of new homes increased in the half year to 30 November 2019 by 15.6% to 438 (379) and the company has expanded geographical presence with strategic land acquisitions in Inverness.
The company has a total land bank of 15,862 plots (31 May 2019: 15,938) with Gross Development Value of £3.2bn (£3.2bn)
It entered the private rented sector with the signing of a collaboration agreement with Sigma PRS Management.
Group revenue rose by 5.4% to £79.8m (£75.7m) and the interim dividend is increased 16.7% to 1.4p (1.2p).
Mr Smith sold 250,000 shares at 145p each, raising £362,500 towards the purchase of a family home, Springfield said. He now holds 952,428 shares, worth just shy of 1% of the entire company. This also includes shares held by his wife.
The shares closed 11% lower Tuesday at 142.51p each.
Commenting on the results, he said: “We are pleased to have achieved another period of growth resulting from progress across our business and, in particular, delivering strong improvement in gross margin.
“Our acquisitions are performing well and we are realising benefits group-wide.
“We continued to expand geographically with strategic land purchases in Inverness and we made good progress in advancing our developments through the planning system, including receiving consent, post period, for over 3,000 homes at Durieshill, Stirling – the largest detailed planning consent to ever be granted in Scotland.
“Looking ahead, we entered the second half with a strong order book and we are experiencing good growth across the business.
“Alongside our customers, we are benefitting from the UK having entered a period promising greater market certainty – with an increase in the reservation rate since December.
“We are also pleased to now be selling homes at three of our Villages and are excited about the opportunities in the private rented sector offered by our partnership with Sigma.
“Consequently, we remain confident of achieving growth for the full year in line with management expectations and are pleased to have declared an interim dividend 17% above last year.”