REG - Springfield Props. - Trading Update

Springfield PropertiesAnnouncement

10/12/2024 07:00

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RNS Number : 4333P  Springfield Properties PLC  10 December 2024

10 December 2024

 

Springfield Properties plc

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

 

Trading Update

Trading in line with market expectations

 

Springfield Properties plc (AIM: SPR), a leading housebuilder in Scotland
focused on delivering private and affordable housing, provides the following
update on trading for the six months ended 30 November 2024.

 

The Group entered the new financial year experiencing an improvement in
private housing reservation rates as homebuyer confidence returned. This
momentum was sustained through the first half, resulting in an increased
number of private housing reservations being secured in H1 2025 compared with
H1 2024. In addition, selling prices have remained resilient across the
Group's brands.

 

In affordable housing, the Group progressed the delivery of its contracts
secured in the prior year. This, combined with the Group having completed its
legacy contracts at the end of FY 2024, enabled a significant improvement in
gross margin, which returned to double-digits. There has been some hesitancy
among affordable housing providers to commence new projects due to uncertainty
around availability of public funding. As a result, some of the affordable
housing projects in the Group's pipeline will be initiated slightly later than
previously anticipated. However, with the Scottish Budget last week allocating
£768m to affordable housing supply for 2025/26, the Group expects affordable
housing providers to now proceed with new contracts. In addition, the Scottish
Government funding for affordable housing supply in 2025/26 is substantially
higher than in the current year, which the Group expects to drive further
growth in this market.

 

The Group has continued to engage with key stakeholders regarding the creation
of the Inverness and Cromarty Firth Green Freeport and new powerlines in the
North of Scotland. With land holdings across the region, the Group is
extremely well-placed to deliver the new housing required for the development
of this green infrastructure.

 

Net bank debt at 30 November 2024 was £63.6m (30 November 2023: £93.4m; 31
May 2024: £39.9m). This primarily reflects the strategic action undertaken in
FY 2024 to reduce the debt position, but also a sustained focus on carefully
managing costs and generating cost savings in H1 2025 through further
rationalisation across the Group. The increase in net bank debt over the
six-month period reflects the usual seasonal working capital cycle, with
work-in-progress at the end of the first half that will unwind as houses
complete and are sold in the second half of the year.

 

In addition, demand for well-located, deliverable land remains high and, with
one of the largest owned land banks in Scotland and a high proportion of sites
already having planning in place, the Group continues to consider
opportunities for profitable land sales of sites that do not impact its
near-term development pipeline.

 

As a result, the Group remains confident in meeting market expectations for FY
2025. Further details will be provided in the Group's interim results
announcement, which is expected to be announced in mid-February 2025.

 

Innes Smith, CEO of Springfield Properties, said: "Trading for the first half
of the year was in line with our expectations, as homebuyer confidence
continued to increase and we progressed delivery of our affordable housing
contracts that we won last year. Thanks to the decisive action that we took in
FY 2024, we are in a much stronger position and well-placed to address the
significant undersupply of housing across all tenures in Scotland.

 

"We are pleased that the Scottish Government has reconfirmed its commitment to
delivering affordable housing, which has been established as one of its top
priorities. With last week's Scottish Budget allocating nearly £800m to be
invested in new affordable home supply in 2025/26, this reverses the funding
cuts from last year and will give our partners the confidence to progress new
contracts in the second half.

 

"Springfield continues to have one of the largest owned land banks in
Scotland, with a high proportion of sites having planning already in place. 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. We also have
established relationships with key stakeholders across the housing supply
chain and we are particularly excited by the discussions we are having about
the provision of housing to support the development of new powerlines and the
Inverness and Cromarty Firth Green Freeport in the North of Scotland. As a
result, 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)

 

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