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Major Tayside housebuilder searches for more development sites

Springfield Properties chief executive Innes Smith.
Springfield Properties chief executive Innes Smith.

A major Tayside housebuilder is eyeing further growth after reporting a jump of more than 40% in profits.

Springfield Properties chief executive Innes Smith said the firm was “on the lookout for opportunities” following a significant reduction in its net debt last year.

Springfield has the Bertha Park development in Perth and the Dykes of Gray project in Dundee.

Soaring profits for housebuilder

Announcing interim results for the six months to the end of last November, Mr Smith hailed it as an “excellent” period for the group, which is behind housing developments in the areas including the Highlands and Moray, Dundee and Perth.

Springfield’s Dykes of Gray housing estate.

The figures showed a 42.9% rise in pre-tax profits to £9 million, from £6.3m in the corresponding spell in 2019, and 18% increase in turnover to £94.4m, from £79.8m.

Springfield said that after building and sales activity “rebounded strongly” following last year’s Covid-19 lockdown, it had been able to reduce its net debt level from £68.8m in May last year to £33.2m by the start of December.

The company, which is listed on the London Stock Exchange’s Alternative Investment Market, announced a 1.3p interim dividend for shareholders.

Reduction in debt

Mr Smith said: “This has been an excellent six months for Springfield. We safely and efficiently resumed construction to complete the homes that had been scheduled for handover at the end of the previous financial year.

Bertha Park development in Perth by Springfield Properties.

“Our sales offices reopened to significant interest, reflecting pent-up demand and the increasing desirability for the type of housing Springfield provides, with spacious homes with private gardens and easy access to plenty of green space.

“As a result, we were able to deliver significant revenue growth and substantially reduce our net debt position, reflecting the operational gearing of the business.”

He added: “Springfield has a large, high-quality land bank across almost all the key geographies in Scotland, which we continued to develop and received planning approval for over 450 homes.

“We strengthened our operations by implementing a number of efficiency and rationalisation measures that will reduce our cost base going forward.

“We are also pleased to have agreed, post period, with Sigma Capital that we will be progressing our first housing for the private rental sector at our Bertha Park Village.

Bertha Park development in Perth by Springfield Properties.

“With substantial visibility over our private and affordable housing revenue for the full year, we look forward to delivering significant growth for 2020-21, and expect to be slightly ahead of current market expectations.”

Looking to expand into other Scottish locations

Mr Smith said that, while Springfield remained “unashamedly loyal” to areas such as the north, Dundee and Perth, the firm was interested in expanding into parts of Scotland where it currently does not have a presence.

Springfield Properties Michelle Motion, Sandy Adam and Innes Smith.

He continued: “We are open to looking at other areas. We very much had the foot down on getting the debt down over the last six months, but I think we are looking at growing the business again.

“Our chairman, Sandy Adam, is an entrepreneur and is always looking to grow the business and that’s why we went to the market. So we are on the lookout for opportunities and are very keen to continue the success we have had so far.

“We want to do it well and we do know the north, Dundee and Perth very well but there are parts of the country that haven’t experienced Springfield we could be looking at.”

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