Springfield reports sharp drop in completions and profit

Springfield Properties has reported a sharp drop in profit, turnover and completions.

The Scottish housebuilder, in its results for the year to 31 May, reported revenue of £266.5m, down 19.8% on the £332.1m reported the previous year. It’s pre-tax profit fell 36.7% to £9.7m over the same period, which it said was in line with expectations.

Springfield said: “Demand in the year was impacted by high interest rates, mortgage affordability, the cost-of-living crisis and reduced homebuyer confidence” It said however it has experienced “initial signs of recovery” with reservation rates up year-on-year.

The group’s affordable housing revenue fell from £53.9m to £47m which the housebuilder said was due to its decision to pause the signing of new affordable housing contracts in September 2022. It issued a profit warning later that year but then returned to the affordable housing market in September 2023 due to falling inflation and increased subsidy from the Scottish government.

Springfield completed 878 homes in the year, down from 1,301 the previous year, in line with expectations. The group again cited subdued homebuyer confidence and reduced affordable housing activity.

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A spokesperson for Springfield said: “The group acted decisively in response to these conditions and adopted a strategy focusing on lowering its debt by reducing costs, managing working capital and pursuing profitable land sales to accelerate cash realisation from its large land bank. “

Springfield reduced its net bank debt to £39m ahead of a target of £55m set earlier in the year. Its land sales totalled £28.1m, up from £3.7m the previous year.

The housebuilder said its total owned land bank stood at 5,593 plots, 88% of which have planning permission and a strategic land bank equating to 31,471 plots.