Moray-based housebuilder Springfield Properties said it expects annual revenue and profits to be “ahead of market expectations”, reflecting “significant” year-on-year growth.
In a trading update, AIM-listed Springfield said excellent sales of its private housing were being driven by the increased desirability for homes with gardens, especially within its village developments.
Chief executive Innes Smith revealed analysts projections are showing profits are expected to be up 20% while debt decreased to around £25 million this year, from £70m 12 months ago.
The announcement cheered investors. Shares in the firm were 10% higher to 165p at close of trading last night.
The company said strong build and sales activity in the first six months of its trading year to May 31 had been sustained during the second half, with the Elgin-headquartered group continuing to experience high demand.
We’ve seen a very strong market which I don’t think anyone would have predicted a year ago.”
Innes Smith, Springfield Properties chief executive
Mr Smith said: “Last financial year we were shutdown for two to three months so a lot of our handovers we were going to have for 2020 were pushed into 2021. We’ve had, if you like, two year-ends this year.
“But added to that there’s very strong interest throughout in almost every product, and we are seeing huge demand on housing and new housing. And the affordable housing demand is still very strong from government.
‘Strong market’
“We’ve seen a very strong market which I don’t think anyone would have predicted a year ago.
“It’s got us to a position where we’ve managed to get our sales up and our debt down. The analysts’ predictions show our debt down from last year’s £70m down to about £25m.
“The profit is expected to be 20% up on the projections which is significantly up on last year’s figures.
“Everything is healthy and we managed to retain as many staff as we possibly could.
The profit is expected to be 20% up on the projections which is significantly up on last year’s figures.”
“We are going forward with a big commitment to our ESG (environmental, social, and governance) credentials now, which is one of the main focuses on how to build as greenly as we possibly can.”
In addition, at the end of the year, the group sold land, approximately 200 plots, across two of its large developments in the Edinburgh area to two unnamed national housebuilders.
Mr Smith said: “We did sell two pieces of land to other housebuilders. They were land sales that were on sites that have five to 10 years of sales on them. It’s good to sell land which releases cash that you can invest somewhere else.”
Covid-19 challenges
Mr Smith now hopes the industry can continue to perform well despite the challenges it has faced with Covid-19.
He added: “There are concerns. If everyone is busy, it means everything gets difficult to get a hold of.
“The reports are all coming now about difficulties in the supply chain, so there are a few challenges.
‘There was a real threat the industry could be closed down.’
“The thing about last year was there were many things that could’ve gone wrong. Yet construction was able to keep working throughout with the newly named variants.
“With those things coming through in January there was a real threat the industry could be closed down, so there is a lot of finger-crossing and hoping the vaccines do their jobs – and we can continue housing people.
“It’s an important part of the economy housebuilding, so it’s important we can keep going.”
Springfield Properties is due to announce a further update on year-end results in July.
