Firm only building homes ‘when they are reserved’
Scottish housebuilder Springfield Properties said ongoing problems in the housing market sent revenue and profit tumbling in the first half.
The AIM-listed firm saw income in the six months to November last year drop a quarter to just under £122m while pre-tax profit nosedived 80% to £1.2m.
Turnover from its private housing arm, its biggest, dropped 26% to £88m while income from its contract housing business, which includes PRS work, dropped more than 80% to £1.9m which the firm said in part reflect a rent cap imposed last year by the Scottish government. This is due to be lifted at the start of April.
Total completions at the group during the period fell one third to 432 with the firm saying private housing demand continued to be impacted by high interest rates, mortgage affordability and reduced homebuyer confidence.
It added that it was “carefully managing working capital and curtailing speculative private housing development by only commencing building homes when they are reserved”.
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Springfield said it was on track to reduce its bank debt to around £55m by the end of its financial year at the end of May while it added it spent £900,000 on restructuring costs during the period.
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