Springfield Properties said private housing sales remain subdued but it expects a substantial increase in profit before tax for the year following a series of land sales.
The housebuilder is forecasting an increase in revenue to £280m (2024: £266m), with profits driven by the “highly profitable” offloading of 2,480 plots on six sites to Barratt Redrow.
This helped the group reduce net debt faster than expectations to £21m at year end (31 May 2024: £39.9m), and to focus on opportunities in the North of Scotland driven by renewable energy development and infrastructure upgrades.
Reservation rates in private housing remained stable compared with the second half of FY 2024. In affordable housing there has been a year-on-year increase in revenue in line with market expectations and a significant improvement in gross margin, which returned to double digits.
As noted in the group’s interim results announcement of 17 February, Springfield’s strategic focus going forward is on the North of Scotland where the board believes substantial opportunities exist driven by incoming UK Government-financed net zero infrastructure development.
The net zero infrastructure development will require new housing for the thousands of additional workers that are needed to deliver and operate the projects as well as the long-term growth in population as a result of the economic stimulus to the region.
The group is holding talks on how to meet the demand for the new housing and is focused on a significant number of plots allocated by Highland Council for housing development.
Innes Smith, CEO of Springfield Properties, said: “I am pleased that we have continued to accelerate the removal of our bank debt, keeping us on track to remove bank debt by the end of FY 2027, and achieved an increase in profit and revenue for the year.
“This reflects our profitable land sales to Barratt and a substantial improvement in our affordable housing gross margin, which has returned to double digits.
“This has put us on a firm footing to be able to capitalise on the sizable opportunities in the North of Scotland where there is significant demand for housing to support the development of net zero infrastructure, which is well underway.
“We are working with the infrastructure providers, the Scottish Government and the Highland and Moray councils to address this need, and we look forward to reporting on our progress.”
The group will provide further details in its final results announcement, which is expected to be announced in September.
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