Housebuilder Springfield Properties has announced record profits and turnover, boosted by strategic land sales and strong demand for new homes.
And the Moray-based company said its growth is continuing this year, driven, in particular, by demand for affordable housing in Scotland.
Annual results for the firm, which is behind developments in areas including Inverness, Elgin, Dundee and Perth, showed an 81% leap in pre-tax profits to £18.5million for the year to the end of May.
And, with a 51% year-on-year surge, its turnover passed the £200m mark for the first time, rising to £216.7m.
Chief executive, Innes Smith, said they were figures he would “never in a million years” have predicted at the start of the Covid-19 pandemic.
He added they were all the more remarkable given that, along with other builders, the firm stopped work for a month last June because of coronavirus restrictions.
Housing market defied pandemic predictions
Mr Smith said: “The housing market has, against all predictions, been strong and we’ve been in a good place to take advantage of that.”
During the year the Elgin-headquartered company, which is listed on the London Stock Exchange’s Alternative Investment Market (AIM), reduced its net debt by £50m to around £20m.
Earlier this year, the firm announced it had sold approximately 200 of its plots across two of its large developments in the Edinburgh area to two national housebuilders.
In total, Springfield completed 973 homes in 2020/21, compared to 727 in the previous 12 months, with 593 of them for private buyers.
We are receiving sustained demand across the business supported by low interest rates, a competitive mortgage market and a prevailing shortage of homes across all tenures.”
Springfield chief executive, Innes Smith
The average selling price rose to £244,000 from £236,000 and the company said the increase was down to “housing mix and house price inflation.”
In July, Springfield, which employs around 700 people, said it had started work on “multiple” new developments around Scotland, which are due to be completed in the current financial year.
They include its first homes for the private rented sector (PRS), with Sigma Capital Group, at the 3,000 house Bertha Park development in Perth.
Mr Smith said 2020/21 had been an “excellent” year for the company.
He continued: “We have achieved our highest ever annual revenue and profit – exceeding £200m in revenue for the first time and by a significant amount – based on record results in both our private and affordable housing.
“We have substantially reduced our net debt position, demonstrating our ability to generate cash, and our strategic land sales towards the end of the year reflect our capacity to realise value from our large, high-quality land bank.”
High demand from affordable homes market
He continued: “Looking ahead, we entered the new financial year delivering against a significant order book, with excellent visibility over full year revenue.
“We are receiving sustained demand across the business supported by low interest rates, a competitive mortgage market and a prevailing shortage of homes across all tenures.
“In particular, this year we expect a significant increase in the contribution to revenue from affordable housing where we are delivering against a record order book.”