LARGER properties with gardens and space for home offices in its “village” developments have driven growth at Elgin-based housebuilder Springfield Properties with revenue for the full year revenue expected to grow by 49 per cent to about £215 million, a record for the group and in line with recently upgraded market expectations.
The company, in a trading update for the year ending May 31, 2021, ahead of announcing its final results in September, said it anticipated a “substantial increase” in pre-tax profit.
Net debt reduced to about £21m at year end, a £50m reduction compared with £71m at the same time last year.
Aim-listed Springfield Properties said that growth had been driven by increased sales in private and affordable housing, plus strategic land sales across two of its large developments in the central belt to two national housebuilders.
The group’s Linkwood Village in Elgin and other developments launched under its Dawn Homes and Walker Group brands made a key contribution to the revenue growth in private housing, the housebuilder noted.
Springfield Properties provides homes that are larger, with space for home offices and with gardens, in semi-rural locations.
Its standalone “village” developments, each with up to 3,000 plots and the infrastructure and amenities a village community needs to become established, are located in Dundee and Perth as well as Elgin.
Other current developments are located in areas including Inverness, Banff, Buckie, Blairgowrie, Kinross and Gartcosh.
Future developments are planned for locations including Beauly and Dornoch in the north of Scotland and Milnathort, Pool of Muckhart and Dunfermline.
In the affordable housing sector, Springfield delivered a “substantial increase in revenue and completions in the second half of the year over the first half, representing significant growth for the full year over 2019/20”.
The group also signed contracts for, and commenced work on, multiple new affordable developments, pointing to the “continued commitment of the Scottish Government to the delivery of affordable housing, with over £3.4 billion earmarked for affordable housing funding through to March 2026”.
Innes Smith, the chief executive of Springfield Properties, pointing to an “excellent year” for the business, said: “We have achieved our highest-ever annual revenue – exceeding £200m for the first time – based on significant growth 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.”
Noting that a key driver of growth has been increased demand for the more spacious homes that Springfield provides, Mr Smith warned that there “continues to be a chronic undersupply of housing of all tenures across Scotland”.
However, he added: “Thanks to the strength of our offer and of our partnerships, which will now include the delivery of homes for the private rented sector, we are exceptionally well positioned to help meet this housing demand and provide great places for people to live, building quality homes and creating sustainable communities.”
Earlier this year, the company noted that its order book had been strengthened amid “robust” sales since last summer, reflecting “pent-up” demand.
Its sites have remained open since June 2020, when housebuilding recommenced following the imposition of the first Covid lockdown.
Mr Smith also said that the group will outline how it intends to formalise its approach to sustainability when it unveils its full results in September.
He concluded: “At Springfield, sustainability has always been at our core and we are proud of our group’s performance in relation to ‘people’ and the ‘planet’ as much as we are ‘profit’.
“Following the identification of a board member to lead on ESG, we look forward to sharing how we intend to formalise our approach to sustainability with our full results in September.”