REG - Springfield Props. - Trading Update

Springfield PropertiesAnnouncement

08/07/2025 07:00

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RNS Number : 0714Q  Springfield Properties PLC  08 July 2025

8 July 2025

 

Springfield Properties plc

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

 

Trading Update

 

Springfield Properties plc (AIM: SPR), a leading housebuilder in Scotland
focused on delivering private and affordable housing, is pleased to announce
that it expects to report profit before tax for FY 2025 in line with current
market expectations and that the Group's focus on the removal of its bank debt
has enabled it to reduce net debt in excess of market expectations.

 

The Group expects to report an increase in revenue to £280m (2024: £266m),
driven primarily by the significant growth in land sales, including through
the Group's agreement with Barratt Redrow plc ("Barratt").

 

In private housing, as previously noted, sales during the year continued to be
impacted by subdued market conditions and reservation rates remained stable
compared with the second half of FY 2024. The Group experienced a lengthening
of the sales cycle, particularly from existing homeowner buyers. Therefore,
while reservation rates have remained steady, private housing completions have
been slightly lower than anticipated.

 

In affordable housing there has been a year-on-year increase in revenue in
line with market expectations and a significant improvement in gross margin,
which returned to double digits. The improvement in gross margin was primarily
due to the Group having completed its low-margin legacy contracts at the end
of FY 2024 and the contracts delivered in FY 2025 having much stronger
commercial terms.

 

During the year, the Group entered an agreement to sell to Barratt undeveloped
land, primarily located across Central Scotland, equating to 2,480 plots
across six sites. The land sale enables two strategic actions: to remove the
Group's bank debt and become net cash positive by FY 2027, and to focus the
Group on the significant opportunities that are emerging in the North of
Scotland driven by renewable energy development and infrastructure upgrades.

 

During the period, the sale of five sites to Barratt were completed, with the
sale of the sixth site expected to complete in the coming weeks. The Group's
land sales were highly profitable and, as a result, the Group expects to
report a substantial increase in profit before tax for the year, in line with
current market expectations. The Group also continued its non-binding
discussions regarding the sale by the Group of a number of further future land
holdings.

 

The Group continues to focus on removing its bank debt and accelerated the
receipt of a payment from Barratt that was originally scheduled for March
2026. As a result, the Group has been able to reduce bank debt faster than
expectations to £21m at year end (31 May 2024: £39.9m).

 

As noted in the Group's interim results announcement of 17 February 2025,
Springfield's strategic focus going forward is on the North of Scotland where
the Board believes substantial opportunities exist driven by incoming UK
Government-financed net zero infrastructure development. The net zero
infrastructure development will require new housing for the thousands of
additional workers that are needed to deliver and operate the projects as well
as the long-term growth in population as a result of the economic stimulus to
the region. During the year, the Group continued to have advanced discussions
with key stakeholders about how to meet the demand for the new housing
required. The Group also made significant progress in securing options over
land in the region, which enabled the Group to submit a significant number of
plots in response to the Highland Council's call for new sites to be allocated
for housing development in their forthcoming Local Plan. With land holdings
across North of Scotland, the Group believes that it is well-positioned to
support the economic stimulus in these areas and the proceeds from the recent
land sale to Barrat will enable the Group to capitalise on this opportunity.

 

Innes Smith, CEO of Springfield Properties, said: "I am pleased that we have
continued to accelerate the removal of our bank debt, keeping us on track to
remove bank debt by the end of FY 2027, and achieved an increase in profit and
revenue for the year. This reflects our profitable land sales to Barratt and a
substantial improvement in our affordable housing gross margin, which has
returned to double digits. This has put us on a firm footing to be able to
capitalise on the sizable opportunities in the North of Scotland where there
is significant demand for housing to support the development of net zero
infrastructure, which is well underway. We are working with the infrastructure
providers, the Scottish Government and the Highland and Moray councils to
address this need, and we look forward to reporting on our progress."

 

The Group will provide further details in its final results announcement,
which is expected to be announced in September 2025.

 

Enquiries

 

 Springfield Properties
 Sandy Adam, Chairman                            +44 1343 552550

 Innes Smith, Chief Executive Officer

 Iain Logan, Chief Financial Officer

 Singer Capital Markets
 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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