SPRINGFIELD Properties was upbeat on the state of the housing market as it secured planning permission for 3,000 new homes in Scotland.
The Elgin-based firm was backed by Stirling Council for Durieshill, one of a number of new “village” developments across the country.
Springfield Properties said in an update on trading for the six months ended November 30, 2019, which comes ahead of its interim results on February 25, 2020, that it is on target to report first half revenue growth and gross margin improvement in line with management’s expectations.
It cited milestones such as Bertha Park Secondary School now open to new pupils – which is part of a village development - the Walker Group acquisition performing as anticipated, and a collaboration agreement signed with Sigma for its first private rented sector projects.
READ MORE: Scottish builder moves into private rental sector
It said it entered the current financial year in a strong position “experiencing good growth across the business”.
This momentum was maintained through the first half, with an increase in completions and revenue in both private and affordable housing.
With the contribution from Walker Group, which was acquired last year in a £31 million deal, the group said it expects to report revenue growth and improvement in gross margin for the first half.
Springfield said its village developments have progressed well and “their appeal is strengthening as they become increasingly established, adding further amenities for residents”.
This includes the opening of Bertha Park Secondary School, the first new secondary school to be established in Scotland for more than 15 years, and a sports centre at Linkwood, Elgin.
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At the group’s most advanced village developments, Dykes of Gray and Bertha Park, management estimate that, in total, more than 600 people have moved into the new homes to date.
Bertha Park was earlier cited as having followed an effective model of progression, setting up a working group with representatives from the company and Perth and Kinross Council, which was used again with Stirling Council during the planning process for the village at Durieshill.
Springfield said it expanded its geographic presence with the strategic land acquisition of a private housing development in Inverness, strengthening the group’s reach in the Highlands.
It said it also continued to make good progress in affordable housing.
Walker Group and Dawn Homes continued to trade in line with management’s expectations and the group is pleased with the progress made to date in embedding the acquisitions.
READ MORE: Springfield makes first move into Highland capital
The Walker deal strengthened its position in the east of Scotland and saw Springfield take over five active sites with a gross development value of £100m, with five further sites valued at over £300m in the pipeline.
It followed the company’s acquisition of west of Scotland-focused Dawn Homes for £20.1m.
The group also said the collaboration with Sigma to acquire and develop sites for private rented sector (PRS) projects in Scotland is a milestone.
Springfield said: “This represents Springfield’s first partnership for PRS and the board expects it to accelerate Springfield’s delivery of homes and provide a further revenue stream, alongside its existing private and affordable housing activity.”
Innes Smith, chief executive of Springfield Properties, also hailed the earlier acquisitions and the link-up with Sigma.
He said: “We’re pleased to have achieved another period of growth resulting from sustained progress across our business as we continue to deliver on our targets.
“Our acquisitions are performing well and we are excited about the new opportunities offered by our partnership with Sigma.
“The UK is entering a period promising greater market certainty, which will benefit our customers, our suppliers and our business.
“This, combined with a land bank providing work for at least 16 years and a skilled and dedicated workforce, gives us continued confidence in our future prospects and in achieving our goals.”
Shares in Springfield rose 2%, or 2.5p to 128p.
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