For the six months to 30th November 2023 Springfield Properties saw turnover fall 25% to £121.7m and pre-tax profit dive 80% to £1.2m.
Total completions during the period were just 432, compared to 673 in the same period the previous year.
Meanwhile net bank debt rose 38% to £93.4m but action has been taken on debt over the past couple of months and this is expected to be down to around £55m by the end of May by selling land, the board said.
Chief executive Innes Smith said: “Trading for the first half of the year was in line with our expectations, and reflects the challenging market conditions experienced across the industry. To mitigate the impacts of the downturn and ensure we are in a stronger position for when trading conditions recover, we took decisive actions to maximise cash generation and reduce our debt by year-end. A key element of this was actively pursuing profitable land sales. We are pleased to have agreed sales worth £18m so far and we expect to conclude negotiations for further sales in the near term.
“Looking ahead, we are encouraged by the improvement in private housing reservations that we have experienced in recent weeks and the signs of increasing homebuyer confidence, as has been reported by other housebuilders. We are receiving strong demand in affordable housing – and have already signed contracts worth c. £40m since 31 May 2023. We are also hopeful that the ending of the Scottish government’s emergency rent cap in April 2024 will enable a return of PRS [private rented sector] activity. Alongside this, build cost inflation is continuing to reduce and is expected to stabilise at low levels. We are on track to meet our year-end target for net bank debt, which will continue to reduce in the next financial year.
“The fundamentals of our business and our position within the Scottish housing market remain strong. We have one of the largest land banks in Scotland with over 6,421 owned plots, 86% of which has planning permission, and a further 3,217 acres of strategic land. We have an excellent reputation of offering high quality, energy efficient homes in desirable locations in key housing markets, and a track record of delivering developments exclusively for affordable housing. In addition, there is an undersupply of housing of all tenures, which can only be addressed through building new homes. As a result, while there remains uncertainty in the near term, with our position having been strengthened through the decisive action that we have taken, we remain confident in Springfield’s prospects.”
Got a story? Email news@theconstructionindex.co.uk
