SPRINGFIELD Properties has issued a trading update in which the housebuilder revealed it expects to record its highest ever annual revenue.
Full year revenue is expected to be approximately £330 million, which would represent year-on-year growth of 28%.
Springfield added that pre-tax profit is expected to be in line with market expectations, with net debt reduced from £73.7 million to £68 million.
Revenue and private housing completions increased significantly, driven by the contributions from Tulloch Homes and Mactaggart & Mickel Homes. The average selling price for private housing increased to approximately £290,000 (2022: £245,000).
In affordable housing, there was a reduction in revenue as the group took a ‘cautious’ approach to entering into new long-term contracts. However, Springfield revealed it is pleased to note that the Scottish Government has increased the affordable housing investment benchmarks by 16.9%. This is expected to enable housing associations to increase the price of affordable housing contracts to progress building programmes.
As at 31 May 2023, the group’s land bank consisted of circa 16,300 plots, of which over half had planning permission.
Innes Smith, CEO of Springfield Properties, said, “Against a challenging market backdrop, we delivered our highest annual revenue, reflecting our acquisitions as well as organic growth in private housing. While our margins were impacted by significant build cost inflation, particularly in affordable housing, we took decisive action to address this.
“We remain cautious about the near-term outlook, particularly given the softening in demand following the increase in rates by the Bank of England to 5%. We are closely monitoring the economy and buyer behaviour in both the housing and land market and carefully managing our activities to limit our exposure in the slower sales environment.
“This will also ensure that we can respond quickly when normalised demand returns. With over half of our large, high-quality land bank having planning permission, we are well-positioned for when market conditions improve. We are also encouraged that the Scottish Government has now increased its affordable housing investment benchmarks, supporting the viability of affordable housing projects going forward.
“Moreover, the fundamentals of the housing sector in Scotland remain strong. There is an undersupply of housing, which is being exacerbated by the current conditions, and there is greater affordability in Scotland compared with the UK as a whole.
“Above all, we remain committed to delivering great quality housing for our communities and value for our broader stakeholders both now and in the years to come.”
