SPRINGFIELD Properties has reported a 19.8% drop in revenue to £266.5 million for the financial year ended May 31, with demand impacted by high interest rates, mortgage affordability, the cost-of-living crisis, and reduced homebuyer confidence.
Adjusted pre-tax profit was £10.6 million – down from £16 million in 2023, but ahead of management’s original expectations due to ‘strong’ profits on land sales.
Springfield revealed it delivered the key objective of ‘significantly’ reducing net bank debt, exceeding the target of £55 million with net bank debt of £39.9 million.
Total housing completions for the year stood at 878 (2023: 1,301), described as being ‘in line with market expectations’, reflecting the ‘challenging’ housing sector conditions.
Private housing revenue dropped from £253.4 million to £184.7 million. Affordable housing revenue was £47 million (2023: £53.9m) reflecting the decision in the prior year to pause entering into new affordable-only fixed price contracts.
Springfield declared a resumption of dividend, declaring a total dividend for the year of 1p per share.
In terms of outlook, since year end the group revealed it is experiencing ‘initial signs of recovery’, with private housing reservation rates ahead of the same period last year.
Innes Smith, CEO of Springfield Properties, said, “Against a challenging market backdrop, we successfully delivered our objectives for the year. A key priority was reducing our debt, and we’re very pleased that we have exceeded our target. This was achieved through taking decisive action to reduce costs, manage working capital and secure profitable land sales of sites that do not impact on our near-term development pipeline. We are now in a strong position to deliver future growth as more favourable economic and trading conditions return.
“We are also encouraged by early indications for an improving backdrop. Many of the key elements that underpin homebuyer confidence are strengthening, including decreasing inflation and the first Bank of England interest rate reduction in over four years. While it remains early days, we are pleased we have started to see an improvement in private housing demand since year end – with reservation rates being ahead of the same time last year. Similarly, having actively recommenced signing affordable contracts, contracted order book in affordable housing at year end was also ahead of where it was at the same point in the previous year.
“We continue to have one of the largest owned land banks in Scotland, with a high proportion of sites having planning already in place. We are particularly excited about the forthcoming investment in Scotland with the creation of the Inverness and Cromarty Firth Green Freeport and the development of Scottish & Southern Energy Networks’ new powerlines to provide the UK with renewable energy, which will require the building of thousands of new homes. We have worked across the north of Scotland for decades and are passionate about growth and development for the region. With significant land holdings in Moray and the Highlands, we are uniquely placed to help deliver this opportunity as the housing market recovers.
“As a result, we look to the future with increasing confidence and, accordingly, we are pleased to be able to return to making dividend payments earlier than initially anticipated. We thank our shareholders for their continued support and look forward to updating them on our progress.”
