REG - Springfield Props. - Springfield Signs Land Sale Agreement with Barratt

Springfield PropertiesAnnouncement

17/02/2025 07:00

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RNS Number : 3284X  Springfield Properties PLC  17 February 2025

17 February 2025

 

Springfield Properties plc

("Springfield", the "Company" or the "Group")

 

Springfield Signs Land Sale Agreement with Barratt

Proceeds of £64.2m to accelerate removal of bank debt and capitalise on the
substantial opportunities in the North of Scotland

 

Springfield Properties plc (AIM: SPR), a leading housebuilder in Scotland
focused on delivering private and affordable housing, announces that it has
signed an agreement with BDW Trading Limited ("Barratt"), the principal
operating subsidiary of Barratt Redrow plc, for the profitable sale of 2,480
plots of undeveloped land with planning consent across six sites for £64.2m
(the "Land Sale").

 

Proceeds from the Land Sale will be received over four years and will be used
to accelerate the removal of the Group's outstanding bank debt and to
capitalise on the significant growth opportunities emerging in the North of
Scotland.

 

In addition, the Group and Barratt have entered into non-binding discussions
regarding the possible sale of additional future land holdings on a number of
other sites (the "Prospective Land").

 

The Land Sale

 

The Group will sell to Barratt 2,480 plots of undeveloped land across six
sites (the "Land") 1 .

 

As a result of the Land Sale, the Group expects to report profit for FY 2025
significantly ahead of market expectations. Further details on the Group's
outlook for FY 2025 are provided in its H1 2025 results announcement.

 

The Land and the Prospective Land is from the Group's future land pipeline and
is primarily located across Central Scotland. Following the Land Sale, the
Group will continue to have a large high quality land bank, providing over
nine years of activity (based on owned and contracted land), and will continue
to operate in Central Scotland, including delivering homes at the Bertha Park
and Dykes of Gray villages.

 

The Land Sale will complete by 31 May 2025, with the Group receiving the
consideration of £64.2m in cash in four tranches over the next four years. As
a result, the Group expects to reach a net cash position in FY 2027.

 

The Land Sale only entails the transfer of undeveloped land. No employees or
other assets are being transferred as a result of the Land Sale.

 

Opportunities in the North of Scotland

 

Following the Land Sale, the Group's strategic growth focus will be on
opportunities in the North of Scotland where the Group is uniquely placed to
capitalise on the substantial need for new housing to cater for the high
population and economic growth expectations in the region. This is being
driven by the UK Government-financed green infrastructure development in the
North of Scotland. Scottish and Southern Electricity Networks ("SSEN") are
investing £31bn into upgrading the electricity network in the region and the
project will require around 5,000 worders at its peak in 2027. In addition,
the Inverness and Cromarty Firth Green Freeport is expected to create more
than 10,000 jobs locally with new investment of over £3bn. The Group has
commenced discussions with key stakeholders about how to meet the demand for
the new housing required to cater for the significant population growth.

 

The Directors believe that Springfield is uniquely placed to capitalise on
these opportunities thanks to its large land bank across the Highlands and
Moray, with a majority of plots already having planning in place, and its
established position as a leading housebuilder in the region.

 

Innes Smith, Chief Executive Officer of Springfield Properties, said: "This
profitable land sale will enable us to realise the value of our assets,
accelerate our plans to remove bank debt and focus on the significant
opportunity in the North of Scotland where we are uniquely positioned to
excel. New housing is required to cater for the thousands of workers needed to
deliver the substantial green infrastructure development coming to the region
and the ongoing population growth as result of the economic stimulus these
projects will bring. With significant land holdings across the Highlands and
Moray and an established presence, we are excellently positioned to capitalise
on this opportunity. In addition, we continue to have a large high quality
land bank, with this deal demonstrating the long-term value of that asset.
Accordingly, and with a significantly strengthened balance sheet, we continue
to look to the future with confidence."

 

 

Enquiries

 

 Springfield Properties
 Sandy Adam, Chairman                                          +44 1343 552550

 Innes Smith, Chief Executive Officer

 Iain Logan, Chief Financial Officer

 Singer Capital Markets
 Shaun Dobson, James Moat, Oliver Platts (Investment Banking)  +44 20 7496 3000

 Gracechurch Group
 Harry Chathli, Claire Norbury, Henry Gamble                   +44 20 4582 3500

 

Analyst Research

 

Equity Development and Progressive Equity produce freely available research on
Springfield Properties plc, including financial forecasts. This is available
to view and download here:

https://www.thespringfieldgroup.co.uk/news/updates-and-analyst-reports
(https://www.thespringfieldgroup.co.uk/news/updates-and-analyst-reports)

 1  The Land comprises approximately 998 plots at Durieshill, Stirling; 929
plots at Lingerwood, Midlothian; 100 plots at Tranent, East Lothian; 138 plots
at Ness Side, Inverness; 315 plots across two sites at Western Gateway, Dundee

 

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