Springfield boss ‘encouraged’ by health of affordable market in Scotland as firm signs £15m deal

The boss of Springfield says he is ‘encouraged’ at the state of the affordable housing sector in Scotland months after the housebuilder returned to the market. 

Springfield paused the signing of new affordable housing contracts in September 2022 and issued a profit warning later that year, but returned to the market last September on the back of easing cost inflation and an increase in subsidy from the Scottish government. 

Today it signed a £15.3m contract with social enterprise development company Highland Housing Alliance for the delivery of affordable housing. 

“Since reengaging with affordable housing providers, we have been greatly encouraged by the interest that we are receiving,” said Innes Smith, chief executive of Springfield.  

“Within the last eight months, we have signed contracts worth c. £40m with local housing authorities and other affordable housing providers.” 

The group will receive £4.1m for a bulk sale of housing, which is scheduled to complete during the current financial year, and another £11.2m for the design and build phase, which is due to commence in the coming weeks. 

The majority of the revenue from this second phase will be recognised in the Group’s next financial year.   

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“Alongside the design and build contract, we are pleased to have this opportunity to deliver a bulk sale that will support our overall sales rates as well as our focus on maximising cash generation,” said Smith. 

A trading update posted in mid-December showed the housebuilder was on track to meet its expectations for the year despite a drop in completions. 

The £330m-turnover business had previously said it expected adjusted pre-tax profit of between £10m and £14m for the year.