17th Feb 2025 12:23
(Alliance News) - Springfield Properties PLC on Monday said it will sharply beat market expectations for the current financial year, noting an expected sharp increase in demand for housing.
The Elgin, Scotland-based based housebuilder announced the "profitable" sale of 2,480 plots of undeveloped land with planning consent across six sites for GBP64.2 million to larger peer Barratt Redrow PLC. The sale is via BDW Trading Ltd, the principal operating subsidiary of Barratt Redrow.
"Proceeds from the land sale will be received over four years and will be used to accelerate the removal of the group's outstanding bank debt and to capitalise on the significant growth opportunities emerging in the north of Scotland. In addition, the group and Barratt have entered into non-binding discussions regarding the possible sale of additional future land holdings on a number of other sites," Springfield said.
Separately, Springfield reported that pretax profit surged to GBP3.5 million in the six months to November 30, from GBP1.2 million a year prior.
Revenue fell 13% to GBP105.6 million from GBP121.7 million.
Cost of sales reduced by 16% to GBP86.9 million from GBP103.7 million.
Looking ahead, the company is optimistic as it highlighted it will "benefit from the expected sharp increase in demand for housing": "Overall, the group anticipates reporting profit that significantly exceeds market expectations for financial 2025. Looking further ahead, with reaching a net cash position by financial 2027 and the significant growth opportunity in the North of Scotland, the board remains confident of delivering sustainable shareholder value."
Springfield said the expected uptick in demand for housing is to support the delivery of the Inverness and Cromarty Firth Green Freeport and substantial upgrades to the power network.
The company's financial year ends on May 31.
The company did not declare an interim dividend, unchanged from a year ago, and remains committed to declaring a final dividend for financial year 2025. For financial 2024, it had paid a dividend of 1 pence per share.
Springfield shares rose 10% to 108.75 pence each on Monday afternoon in London.
By Tom Budszus, Alliance News slot editor
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