Springfield Properties Share Discussion Threads

[warranty] 22/2/2023 10:03

Actually the shares recovered a little before the close to nearly 84p but it’s still a big drop. As long as the economy doesn’t get worse I can see the shares recovering over the summer but not by much until the numbers look better so it’s a long term hold for me. Shame about the dividend though understandable in the current conditions but hopefully it will be reinstated later in the year if things improve.

[scotches] 22/2/2023 08:56

SHARES in Springfield Properties plunged by nine per cent after the Elgin-based housebuilder revealed spiralling inflation had led it to pause activity in the affordable housing market, sparking an unspecified number of redundancies at the company.

Springfield declared the impact of cost inflation on fixed-price contracts in affordable housing had offset the growth it had seen in the private market as it reported profits had fallen by 5% to £5.9 million in six months to November 30.

The company said it will not enter any new long-term fixed contracts for affordable housing until market conditions improve.

And chief executive Innes Smith said it would not invest in speculative building in the near future, with the company focusing on reducing its debt.

Profits at Springfield dipped in the first half amid the fall-out from former Prime Minister Liz Truss’s mini-Budget in September, which Mr Smith said had reduced homebuyers’ confidence and increased the cost of mortgages “significantly” in light of the subsequent rise in interest rates.

He told The Herald that Springfield has seen “green shoots” in the New Year, with reservation rates gradually increasing in January, but said the recovery had still to be established.

Springfield underlined the impact of its acquisitions of Mactaggart & Mickel Homes in July and Tulloch Homes in December 2021, as revenue from its private housing business increased to £118.6m in the first half from £47.3m at the same stage last year.

The company completed 429 homes in the first half, and is on track to deliver 1,200 for the full year, the company said.

However, revenue from affordable housing dipped by 12% to £27.9m from £31.7m amid the impact of cost inflation on fixed price contracts that were signed two to three years ago, which reduced margins.

Overall revenue increased by 85% to £161.9m.

Springfield said it would hold back from further work in affordable housing until conditions improve and the Scottish Government reviews its affordable housing investment benchmark.

Next year, affordable housing will account for 13% of Springfield’s business, compared to the 30% it has been responsible for previously.

“It has just become an incredibly difficult market,” Mr Smith said. “We have had 15 very good years of affordable. It’s a bad year this year so clearly we are pulling back and we have got the projects right down on affordable.

“But on the positive side the customer reservations are up.”

Mr Smith noted reservation rates in the private housing had steadily recovered in January to levels seen before the Truss mini-Budget, declaring that “there is more confidence in the market”.

He added: “People can see where the mortgage rates are at. Inflation is on its way down. We have seen prices remain stable. We have had no price decreases and we have no need of doing that so we do think the green shoots are there. Whilst we can’t quite see the flowers, we do see the green shoots.”

Mr Smith went on to highlight the falling price of commodities such as natural gas, oil and timber, which he said will accelerate as housebuilders reduce output and, ultimately, feed through to energy bills and the cost of living.

“That is coming, so that is clearly a positive,” he said.

Springfield reported that it undertook a restructuring further to its £46.3m acquisition of the housebuilding business of Mactaggart & Mickel which, along with other actions to save costs, will lead to annualised cost savings of around £3m.

Asked where the savings have been made, Mr Smith said “some senior management have left the business” further to the restructuring, while other people have departed and not been replaced.

He said: “Obviously, as turnover has gone down in affordable [housing], then unfortunately redundancies have had to happen.

“That is one of the consequences of taking the foot off the gas.

“There are real people getting impacted – [it is not just that] they are not getting the houses, [there are] employees that are no longer here because of that.”

Asked to specify how many people had been made redundant, Mr Smith said: “I would prefer not to.”

Springfield currently directly employs around 900 people, plus a further 1,500 on a sub-contracted basis.

The company has also stepped back from building homes for the private rented sector, following the move by Scottish ministers to cap rent increases to help people amid the cost-of-living crisis. It had previously been planning to build 300 PRS homes in partnership with Sigma Capital Group.

Springfield reported that net debt stood at £73.7m on November 30, compared with £38m at May 31. It noted that the increase reflected the “usual working capital cycle... with significant work-in-progress at period-end for delivery in the second half of the year and in the next financial year, as well as the Mactaggart & Mickel Homes acquisition.”

Shares closed in Springfield Properties closed down 8p, or 9%, at 80p.

[warranty] 21/2/2023 17:58

Yes bad decision that but now Sturgeons gone you never know? Clearly also the low cost housing turned out a noose around the company’s neck but at least that’s been paused. The company claims that recent enquiries have improved so with interest rates and inflation on the wane, affordability should lead to more sales for the second half when hopefully the dividend is resumed. According to the z telegraph this morning the average buying price in Scotland is only five and a half times earnings compared to eight in England and even ten times in London so hopefully that will also help?

[c3479z] 21/2/2023 10:48

seems rent controls has killed building to rent.... short-sighted and had the opposite effect to intended. labour party should take note but won't,

[warranty] 21/2/2023 07:54

So clearly people were “in the know” yesterday before results were published, profits down, eps down and dividend cancelled. Not good and expecting a big drop on opening.

[warranty] 20/2/2023 17:24

What the hell happened there at 11am, can’t see any downgrades or anything!! Interim results tomorrow so I hope it’s not due to somebody getting a sneaky preview of bad news?

[warranty] 18/1/2023 18:41

Was way oversold this so hopefully now on the recovery path.

[dros1] 22/12/2022 12:27

some good news for SPR

No rent restrictions for social landlords in Scotland next year
hxxps://www.insidehousing.co.uk/news/news/no-rent-restrictions-for-social-landlords-in-scotland-next-year-79532

[swiss paul] 21/12/2022 20:43

Yes but share price is based on the future not the past and if you look at property prices they have been falling which means????
I see the Directors have alos decided to top up. Either they have confidence about something or they cant read the economic situation - which wou,d eb quite worrying

[dros1] 21/12/2022 13:50

Average house price in Scotland rises to record level and Scotland bigger housebuilder is falling to record level

[scotches] 20/12/2022 09:35

Directors topping up at the current lows.

[jimarilo] 15/12/2022 22:36

saying drivel is drivel

do you do more than one word at a time ??

[warranty] 13/12/2022 18:51

I think everybody anticipated tough times for at least the next twelve months so really no rush to buy and HB stocks at the moment which may appear cheap but probably will get even cheaper yet. Obviously if SPR aren’t selling houses they won’t be paying a dividend so expect that to be cut or shelved as well in the forthcoming results statement.

[mr hangman] 12/12/2022 10:41

Thanks for that Jim, Best stick to Exploration stocks

[c3479z] 12/12/2022 09:54

rent freezes have the opposite effect in the medium term to that intended by driving up demand for fewer available properties>

[bulltradept] 12/12/2022 07:48

80p anyone?

[spob] 27/10/2022 10:51

and almost 16p dividends forecast for the next two years

gives approx 22% total yield in the next 2 years from right now at the current bargain price

[spob] 27/10/2022 10:41

final ex dividend next week

4.7p

[swiss paul] 11/8/2022 19:48

RNS Number : 7610V
Springfield Properties PLC
11 August 2022
Springfield Properties plc (AIM: SPR), a leading housebuilder in Scotland delivering private, affordable and PRS housing, announces that Michelle Motion, Chief Financial Officer of the Company, and Michael Holm, husband and PCA of Michelle Motion, today purchased, through respective ISAs, a total of 25,000 ordinary shares of 0.125 pence each in the capital of the Company ("Ordinary Shares") at a price of 134 pence per Ordinary Share.



Following these transactions, Michelle Motion has an interest in 127,5261 Ordinary Shares, representing approximately 0.1% of the issued share capital of the Company.