Springfield Properties posts pre-tax profit of £6.3mn

Scotland’s Springfield Properties has posted a pre-tax profit of £6.3mn – an increase of 3.4%. The provider of private and affordable housing said it expects continued growth as political uncertainty recedes.

Financial Highlights

Innes Smith, Chief Executive Officer of Springfield Properties, 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.”

Operational Highlights

• Increased sales, profit and margin – on track to achieve growth for FY 2019/20 in line with market expectations;
• Declared increase in interim dividend of 16.7% to 1.4p (H1 2018/19: 1.2p);
• Completion of new homes increased by 15.6% to 438 (H1 2018/19: 379);
• Successful acquisitions driving strong margin improvement;
• Expanded geographical presence with strategic land acquisitions in Inverness;
• Increased proportion of land bank with planning permission to 30.1% (31 May 2019: 28.4%);
• Total land bank of 15,862 plots (31 May 2019: 15,938) with Gross Development Value (GDV) of £3.2bn (31 May 2019: £3.2bn);
• Entered private rented sector with signing of a Collaboration Agreement with Sigma PRS Management Ltd (Sigma).

Private Housing Delivery

• Revenue increased by 7.3% to £57.1m (H1 2018/19: £53.2m);
• Completions grew by 10.3% to 258 homes (H1 2018/19: 234);
• Excellent progress on Village developments, with key highlights including:
• Advanced planning on Springfield’s largest development, Durieshill, Stirling – with consent (subject to completing a Section 75 agreement) granted post period for 3,042 homes
• Launched sales at third Village development, Linkwood, Elgin, with strong demand
• Opening of Bertha Park Secondary School at Bertha Park, Perth: the first entirely new secondary school to be established in Scotland for more than 15 years

Affordable Housing Delivery

• Revenue increased by 15.8% to £22.2m (H1 2018/19: £19.1m);
• Completions grew by 24.1% to 180 homes (H1 2018/19: 145);
• Completed handovers at first development under local authority framework agreement for 10 affordable home-only developments, and commenced construction on two new developments;
• Commenced handovers, which completed post period, to local housing association of 54 affordable homes at Bertha Park, Perth – the first affordable housing at a Village development;
• Planning consent received for 237 affordable homes at Dalmarnock, Glasgow, and 139 affordable homes at The Wisp, Edinburgh;

Smith said: “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.”