Housebuilder positive for the future as Covid delays impact financial results

L-R: Michelle Motion (chief financial officer), Sandy Adam (chairman), and Innes Smith (CEO)

HOUSEBUILDER Springfield Properties has revealed the impact the Covid-19 lockdown period had on its full-year financial results.

For the year ended 31 May 2020, revenue fell from £190.8 million to £144.4 million, while operating profit was £12.1 million, down from £17.6 million the previous year.

The group explained that the results were impacted by the delivery of handovers scheduled for April and May this year. For the previous two years, these months had accounted for 30% of the annual revenue.

Springfield added that with these sales contracted under the Scottish missive system, the revenue anticipated for the last two months of 2019/20 is expected to be recognised in the first half of the current financial year.

In response to Covid-19, the housebuilder has secured an additional £18 million bank term loan facility to provide sufficient capital in case of a twelve-month lockdown to protect the business and supply chain.

Over the year, 727 homes were completed and the businesses expanded its geographical presence with land acquisitions in Inverness. Springfield said it has seen ‘significant increase in demand’ since resuming operations.

Innes Smith, CEO of Springfield Properties, said, “During the year, ahead of the Covid-19 pandemic, we were delivering on our strategy, with notable successes across the business. We progressed the development of our large, high-quality land bank and expanded geographically. We continued to deliver great places to live against a backdrop of sustained demand for housing in Scotland.

“As a result of the lockdown, the completion of homes scheduled to take place in April and May 2020 was postponed into 2020/21, however, with these sales under contract, we were able to complete the homes for handover to our customers early in the current financial year.

“Since resuming operations, we have seen a strong increase in demand, with private reservations 24% above the same period last year. This reflects both the pent up demand and the increasing desire for buyers to move out of city centres and into larger homes with gardens, which is the type of home that Springfield offers. We are delivering on a solid pipeline in affordable housing, with £38.8 million of contracted revenue.

“We are in a strong financial position, having increased our credit facility during the year, and as we have recommenced handovers post period end, our net debt position has reduced. Consequently, we look to the future with confidence.”