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Housebuilder Springfield Properties says it could survive year-long shutdown

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

Springfield Properties said it had the financial firepower to withstand a 12-month shutdown after securing a further £18 million loan facility with Bank of Scotland.

The housebuilder is behind the Bertha Park development of 3,000 homes in Perth and Dykes of Gray on the outskirts of Dundee.

In accordance with Scottish Government Covid-19 guidance, Springfield temporarily closed down all of its sites under construction and its kit factory on March 24.

The AIM-listed company said it was not possible to know when operations will recommence.

The new funding means Springfield has increased its total credit facility to £85m.

The firm said: “Financial modelling has demonstrated to the board that this additional support gives Springfield sufficient headroom, should it be necessary, to withstand even the most unlikely event of a 12-month shutdown.

“Beyond continued liquidity, the fundamental basis of the models was the punctual payment of Springfield’s employees, suppliers and sub-contractors throughout the period.

“The board is satisfied that the Group is in a strong financial position and able to operate within its new facilities even under the most extreme of these highly stressed scenarios: a full year shutdown.”

More than 90% of the group’s workforce has been furloughed. Of the core team still working, executive and non-executive directors have agreed to a voluntary 50% reduction in base salary until further notice, and at least until sales recommence, with 30% deferred and 20% forgone.

The firm believes it possesses the largest land bank in Scotland.

Chief executive Innes Smith said: “While the impact of the disruption is still unknown, Scotland will continue to need more good quality housing to address its housing shortage and I believe that Springfield is in a very strong position to meet this demand once our business can restart.”

rmclaren@thecourier.co.uk

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