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Elgin housebuilder tight-lipped over Stewart Milne Homes after £46m central belt swoop

l-r Innes Smith, chief executive, Springfield Group, Sandy Adam, chairman, Springfield, Ross Mickel, director, Mactaggart & Mickel (M&M) and Paul McAninch, finance director, M&M.
l-r Innes Smith, chief executive, Springfield Group, Sandy Adam, chairman, Springfield, Ross Mickel, director, Mactaggart & Mickel (M&M) and Paul McAninch, finance director, M&M.

Springfield Properties announced another acquisition today but its boss was non-committal on speculation linking the Moray housebuilder with a potential takeover of Stewart Milne Homes (SMH).

Asked if SMH, headquartered in Westhill, near Aberdeen, could be London-listed Springfield’s next target, chief executive Innes Smith said; “It would not be appropriate to comment.”

A sale of Stewart Milne Group’s housebuilding business is expected to get under way before the end of this year.

It comes after Stewart Milne, the group’s multi-millionaire founder and owner, decided to retire.

Central belt deal

Mr Innes was speaking after Springfield unveiled plans to bolster its fortunes with a £46.3 million deal in the central belt.

The firm has entered an agreement to buy the housebuilding business of Glasgow-based Mactaggart & Mickel (M&M).

Mr Smith said the acquisition was the result of a “chance meeting” between bosses of the two companies at a housebuilding awards ceremony in London earlier this year.

Elgin-based Springfield is buying a total of 17 sites, of which 16 have planning consent.

This acquisition gives us land, with planning permission, in areas of significant demand.”

Innes Smith, chief executive, Springfield Homes.

These equate to the delivery of about 700 homes, with a development value of around £230m.

Springfield is also acquiring M&M’s timber systems operation, including a manufacturing facility in Bellshill, near Glasgow.

Meanwhile, the two firms have entered a strategic alliance that gives Springfield opportunities for future acquisitions from M&M’s strategic land portfolio – currently totalling about 2,300 acres across Scotland and about 3,600 acres south of the border.

Innes Smith, chief executive of Springfield Properties.
Innes Smith, chief executive of Springfield Properties.

Springfield said the addition of the new factory alongside its timber frame business in Elgin would “increase capacity for future growth while further reducing its carbon footprint”.

The company, whose shares were up 1.73% at 117.5p by market close, constructs 90% of its homes from timber kits.

Under the terms of the acquisition, Springfield will pay the owners of M&M £10.5m in cash on completion and a deferred amount of £35.8m to be paid as homes are sold over the next five years.

A Springfield Properties development in Kintore, Aberdeenshire.

Springfield said the deal would be funded from “internal resources” and existing debt facilities with Bank of Scotland.

Mr Smith said: “As well as bringing another premium brand into the group, this acquisition gives us land, with planning permission, in areas of significant demand.

“The structure of the acquisition, with the majority of the payment to be made as homes are completed, de-risks the deal and creates an effective and efficient means of acquiring land.

“The addition of a timber frame facility in the central belt, alongside our existing facility in Elgin, secures our supply of timber kits and provides further capacity to support our next stage of growth.

“It will also reduce our carbon footprint by enabling local manufacture of all kits.

“We welcome our new colleagues to the group and look forward to working together to continue delivering high-quality homes across Scotland.”

Springfield Properties chairman Sandy Adam, centre with chief executive Innes Smith and finance director Michelle Motion.
Springfield Properties CEO Innes Smith, right, with chairman Sandy Adam and chief finance officer Michelle Motion.

Springfield, which is listed on the junior Alternative Investment Market on the London Stock Exchange, last year made a £56.4m swoop on Inverness housebuilder Tulloch Homes.

M&M is a family owned business with more than 100 years of history.

Paul McAninch, the group’s finance director and soon-to-be CEO, with current boss Ed Monaghan due to retire in October, said the deal with Springfield was “a strong platform for growth for both parties”.

‘Proud tradition’

He added: “Our company has had a proud tradition as a leading housebuilder in Scotland which is built on the work of its dedicated teams.

“This tradition will continue, and I’m pleased there will be continuity of employment.”

M&M’s housebuilding business, employing more than 110 people, will continue to operate under its own brand.

It boasts six live development projects and 11 future private and affordable sites across the central belt

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