Springfield Properties plc (AIM: SPR), a leading housebuilder in Scotland offering private and affordable housing, is pleased to provide the following update on trading for the year ended 31 May 2019, ahead of announcing its full year results on 17 September 2019.
As noted in the interim results announcement on 26 February 2019, Springfield delivered strong growth across its Private Housing and Affordable Housing divisions in the first half. This growth has been maintained through the second half of the year, with an increase in completions, which has been supported by a strong Scottish housing market across the private and affordable housing sectors. In addition, management’s target of improving gross margins has been successfully achieved through strong sales rates and sustained prices combined with tight cost control.
Springfield’s Village developments progressed well, with their appeal strengthening as they become increasingly established. At Dykes of Gray near Dundee, the most advanced Village, 178 homes were occupied as at 31 May 2019 (30 November 2018: 136). At Bertha Park near Perth, the first owners moved in at the beginning of the second half and 34 homes were occupied by year-end. Works, led by the local authority, on a new major road connecting the Village directly to Perth have been completed and a new secondary school is due to open in August. Also in Private Housing, sales commenced on three new developments during the second half of the year.
In the Affordable Housing division, the Group continued to make good progress. For example, under its local authority framework agreement for 10 developments, the Group commenced the handover of homes at one of the developments, commenced construction at two developments, and secured development contracts for another two of the developments. In the second half of the year, progress was also made by the Affordable Housing division at Bertha Park with the first 54 affordable homes reaching an advanced stage of construction.
Following its acquisition in February 2019, Walker Group continued to trade as expected and the integration of the business has progressed positively. In addition, Dawn Homes, which was acquired in May 2018, continued to perform strongly, in line with management’s expectations.
With the sustained increase in completions and revenue in the Private Housing and Affordable Housing divisions, and with Walker Group and Dawn Homes continuing to perform as expected, the Group expects to report results for the full year 2018/19 in line with market expectations, representing significant growth over the previous year with improved gross margins.
Following the acquisition of Walker Group during the second half of the year, Springfield is in a strong position, with a presence in almost all of the key geographies within Scotland. The expanded land bank has secured activity for approximately 18 years and both of the Group’s divisions continue to be supported by strong market drivers. Consequently, the Board of Directors remains confident that the Group will continue to achieve sustained growth, in line with market expectations, and deliver shareholder value.
The Group will provide further details at the time of its full year results announcement.