Springfield Properties on track for record year in affordable housing

In its interim results, Scotland’s Springfield Properties has forecast a bumper year for affordable housing, with year-on-year revenue expected to increase by approximately 35%.

Financial Summary

* H1 2021 results reflect additional sales from completions rolled over due to COVID-19

** Gross margin reflects sales mix, namely record revenue from affordable housing in H1 2022

Operational Summary

• On track to deliver full year results in line with market expectations
• Private housing
• 197 private homes completed (H1 2021: 299), reflecting the more normal seasonal phasing of completions across the financial year, with H1 2021 being boosted by completions that had been scheduled for the end of FY 2020, but delayed due to the public lockdown
• Record order book to be delivered in H2 following strong sales in the period
• Eight new private developments commenced completions post period

Affordable housing

• 204 affordable homes completed (H1 2021: 126) reflecting delivery against the Group’s substantial contracted affordable order book
• On track to deliver a record year in affordable housing, with year-on-year revenue expected to increase by approximately 35%

Contract housing

• In contract housing, where the Group provides development services to third party private organisations, 58 homes were delivered (H1 2021: 18)
• Commenced generating revenue under private rented sector (PRS) housing contract
• Effectively managed cost and supply chain pressures with gross margins maintained when excluding the impact of regional and housing mix in private and affordable housing respectively
• Planning approval received for 240 homes during the period and the proportion of land bank with planning permission was 51.6% (31 May 2021: 52.4%); post period submitted planning application for a new, large development of up to 1,000 homes in Edinburgh commuter belt
• Total land bank of 15,308 plots at period end (31 May 2021: 15,281) with Gross Development Value of £3.1bn (31 May 2021: £3.1bn)
• Post period, acquired Tulloch Homes, an Inverness-based housebuilder focused on building high-quality private housing in the Scottish Highlands and with a GDV of £375.4m, to accelerate growth, enhance earnings and strengthen the Company’s foothold in an area of high demand

Innes Smith, Chief Executive Officer of Springfield Properties, said: “This was a strong period for Springfield. We continued to experience high demand across the business and our total order book grew to a record level. We maintained excellent build activity, setting us up for an outstanding second half of the year – with handovers starting on eight new private sites since period end. I am pleased at how we effectively managed the material and supply chain pressures facing our industry, and that we were able to maintain impressive levels of customer satisfaction. Sustainability continued to be a focus. We’re proud that we already deliver over 90% of our homes off-site from timber kits, and we will be setting benchmarks for further measures across operations in our ESG strategy later this year.

“We entered the second half on track for strong growth for FY 2022 in line with market expectations. This confidence is based on homes completed, reserved and missived, and our highest ever revenue in affordable housing, giving us significant visibility over our revenue forecasts. Our position was further strengthened, post period, with the acquisition of Tulloch Homes. This enhances our foothold in the Highlands, an area of strategic importance, and will accelerate our growth, being earnings enhancing from the current year. Supported by long-term market drivers and with demand continuing to outstrip supply, the Board continues to look to the future with great confidence and to delivering sustainable value for all of our stakeholders.”