By Karen Peattie
SCOTTISH housebuilder Springfield Properties has attributed strategic land acquisitions and "excellent progress" on its "village" developments at Elgin, Perth and Dundee for increased sales, profits and margins for the six months to the end of November. The Elgin-based company said it was on track to achieve growth for the full year in line with market expectations, pointing to "greater market certainty" and low mortgage rates for an upturn in sales during January and February. Springfield, which joined the Alternative Investment Market (AIM) in 2017, saw revenues for the six months to November 30 rise by 5.4 per cent to £79.8 million, with pre-tax profits increasing by 3.4% to £6.3m. Successful acquisitions, including last year's purchase of Walker Homes for £31m and Dawn Homes, continued to drive strong margin improvement. Sales increased in both private and affordable housing, with total completions increasing by 15.6% higher to 438 new homes. In its affordable housing business, revenue increased by 15.8% to £22.2m. Springfield commenced handovers of 54 homes, completed post-reporting period, to a local housing association at Bertha Park, Perth – its first affordable housing at a village development. Planning consent was also received for 237 affordable homes at Dalmarnock, Glasgow, and 139 at The Wisp, Edinburgh. Innes Smith, the group's chief executive, said: “We are pleased to have achieved another period of growth resulting from progress across our business and, in particular, delivering strong improvement in gross margin. Our acquisitions are performing well and we are realising benefits group-wide. "We continued to expand geographically with strategic land purchases in Inverness and we made good progress in advancing our developments through the planning system, including receiving consent, post-reporting period, for over 3,000 homes at Durieshill, Stirling – the largest detailed planning consent to ever be granted in Scotland." Bullish about the future, Mr Smith said that Springfield had entered the second half with a strong order book. “Alongside our customers, we are benefiting from the UK having entered a period promising greater market certainty with an increase in the reservation rate since December," he added. "We are also now selling homes at three of our villages and are excited about the opportunities in the private rented sector offered by our partnership with Sigma. "Consequently, we remain confident of achieving growth for the full year in line with management expectations and are pleased to have declared an interim dividend 17% above last year.” Mr Smith said that Springfield's village developments represented a "significant investment in infrastructure", stating: "It's a formula we have stumbled upon that works for us that not many national builders want to pursue – it's very much a long-term strategy. "We have another village development, at Gavieside in Livingston, going through planning for 500 homes with the potential to go up to 2,000." Its expansion in the Highlands saw Springfield make strategic land acquisitions at Easterfield, Inverness Inverness, for 90 homes with the first sales expected in 2020/21, and a further development for 100 homes at Milton of Culloden. Both developments will include a proportion of affordable housing. In its private housing business during the period, other highlights included the launch of sales at Banff and receiving consent for a 116-home development – including 29 affordable homes – at at Ardersier, near Inverness. There was also planning approval for in central Scotland for 240 homes at Dalhousie South and planning permission in principle for 561 homes at Tranent, both near Edinburgh. The company's "milestone" collaboration with Sigma for the development of housing for the private rented sector (PRS), Mr Smith said, saw several Springfield developments, including Dundee, Edinburgh, Perth, Stirling and Inverness, identified for this purpose. Springfield said it expects PRS to provide an additional revenue stream alongside its existing private and affordable housing activity, with good visibility over cash flows. Mr Smith pointed to the "feeling of optimism and confidence in the housing market just now", suggesting that people who might have been holding off buying a home because of the political situation were now "going for it".
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