Group preserves cash
Springfield ‘notes’ shutdown order, scraps dividend
Sandy Adam of Springfield Properties
Springfield Properties, the Scottish housebuilder, said it will ‘respond’ to calls by First Minister Nicola Sturgeon yesterday for all building sites to close.
The Elgin-based company said further guidance is expected to be given by the Scottish Government on this matter and the group will update the market in due course. In the meantime, it will preserve cash by not paying the previously declared interim dividend.
Ms Sturgeon included building and construction in her list of business activities that should halt operations for three weeks to help combat the spread of coronavirus.
In an update, Springfield said it entered the second half of 2019/20 with a strong order book of contracted revenue for the period to 31 May 2020 and was experiencing good growth across the business.
The COVID-19 outbreak has not negatively impacted the group’s completions or reservations to date. However, the COVID-19 situation is rapidly evolving and it had noted Ms Sturgeon’s comments.
Net debt as of 30 November 2019 was £56m. The group has a £67m credit facility with Bank of Scotland and it has maintained a constructive dialogue over the past few weeks regarding the bank’s support and availability of additional funding if required.
“While the group maintains a strong financial position, given the rising level of uncertainty as to how the situation will develop, alongside other measures that the group intends to take to preserve its cash position, the board has decided to withdraw the proposed interim dividend of 1.4 pence per share (amounting to a saving of £1.4m), announced on 27 February.
“The interim dividend will therefore not be paid on 26 March as previously scheduled. The board recognises the importance of the dividend to shareholders, but believes that this is an appropriate and prudent measure to preserve liquidity in these uncertain times.
“The board will consider the quantum of any final dividend for 2019/20 in light of the position and outlook of the group at that time.”