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Mon September 27 2021

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Springfield reports record revenue and profit

14 Sep The latest annual results for Scottish house-builder Springfield Properties show its highest-ever revenue and profit together with a substantial reduction in net debt.

The Bertha Park development
The Bertha Park development

Its final results for the year ended 31st May 2021 report revenue of £216.7m, a 51% increase on the £143.5m of the previous year. Its gross margin was 17.9% in the 2021 results, down from 19.1% in 2020. The company’s operating profit and profit before tax in the latest results were £19.8m and £18.5m, respectively, compared to £11.3m and £10.2m in the previous year.

Springfield said that there was strong build and sales activity throughout the year with high demand experienced across the business resulting in significant growth in revenue in private and affordable housing.

The realisation of work in progress and strategic land sales enabled a reduction in net debt to £20.8m at 31st May 2021 from £70.9m at 31st May 2020.

Total completions increased to 973 homes (2020: 727). There was also progress towards future work, with planning approval received for 609 homes during the year and the proportion of land bank with planning permission increasing to 52.4% (31st May 2020: 49.4%). At 31st May, the total land bank stood at 15,281 plots with a gross development value of £3.1bn.

Implementation of efficiency and rationalisation measures reduced costs by approximately £1m on an annualised basis.

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The company began work on site for its first homes for the private rental sector with Sigma Capital Group at Bertha Park Village.

In private housing delivery, revenue increased 46.2% to £144.6m (2020: £98.9m) with 593 completions (2020: 419). Significant growth driven by factors including the completion of homes postponed due to Covid-19 lockdown; and increased desirability of the type of larger housing with plenty of green space that the group offers. There was continued progress on Springfield’s ‘Village’ developments.

For affordable housing, revenue increased by 29.7% to £55.1m (2020: £42.5m) with 380 completions (2020: 308). The company was active in securing new contracts, with an order book of £91.5m as at 31st May 2021 – its largest-ever contracted order book for affordable housing.

Innes Smith, chief executive officer of Springfield Properties, said: “This has been an excellent year for Springfield. We have achieved our highest ever annual revenue and profit - exceeding £200m in revenue for the first time and by a significant amount - based on record results in both our private and affordable housing. We have substantially reduced our net debt position, demonstrating our ability to generate cash, and our strategic land sales towards the end of the year reflect our capacity to realise value from our large, high-quality land bank. I am also pleased that we have been able to maintain high levels of customer satisfaction and we have continued to take steps to improve our build quality, process and the sustainability of our business.

“Looking ahead, we entered the new financial year delivering against a significant order book, with excellent visibility over full year revenue. We are receiving sustained demand across the business supported by low interest rates, a competitive mortgage market and a prevailing shortage of homes across all tenures. In particular, this year we expect a significant increase in the contribution to revenue from affordable housing where we are delivering against a record order book. Our growth will also be supported by our first revenue from PRS housing and continued progress in private housing. As a result, on an underlying basis (excluding the contribution from land sales) we expect to report strong growth for the full year, in line with market expectations. Consequently, the Board continues to look to the future with confidence and to delivering sustainable value for all of our stakeholders.”   

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