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Another tranche of plots sold? Expectations of a significant reduction in loan interest rates?
Low volumes so far, so I won’t get too excited, but I’m certainly enjoying the spike.
Innes Smith, CEO, Iain Logan, CFO and Martin Egan, COO of Springfield Properties hosted an Investor Presentation where they discussed highlights of their Interim results (period to 30th November 2023).
The team talked through the decision actions they have taken to strengthen the company's position and commented on current trading being in line with market expectations. Management provided a detailed Financial Review and insights into the Scottish housing market. They also answered a wide range of questions from the viewing audience.
The full video is available below and has been divided into chapters for ease of viewing:
0:00:03 Introduction & Summary of key points
0:03:20 Financial Review
0:08:40 Large, high-quality Land Bank
0:11:31 Operational & Strategic Review (Private Housing, Affordable Housing, Build quality)
0:15:52 Housing market in Scotland
0:24:37 ESG: Environment and People
0:25:07 Conclusion
0:26:23 Questions & Answers
Link to video: https://www.equitydevelopment.co.uk/research/investor-presentation-interim-results-february-2024
oh, and of course equity development and progressive research dare not talk ill of the ceo because he pays them to push this dog**** to retail investors.
- They bought another company for £40m when inflation/rates were rocketing which means the CEO is an absolute moron and knows nothing about basic macroeconomics. Now they have to reduce debt even though they just took debt on last year. Acquisition was way too big as well. CEO was saying 'It gives us easy access to more land bank', now they are selling it off lol.
- WAY too much cash tied up in a huge land bank and now they are forced to offload it at discounted prices.
Tell me when the entire C-Level team has been removed, until then I'm not touching this with these fools running it.
You paint a very rosy picture 😉
Can you disclose any direct or indirect interest you have in Springfield
New research report with audio summary here: https://www.equitydevelopment.co.uk/research/interim-results-24-looking-to-the-future-with-confidence
Springfield has reported encouraging H1 results, reiterating full year expectations and confidence in longer term growth prospects. The strategy to maximise cash generation is bearing fruit, costs are being carefully controlled and there are signs of market recovery, both in terms of Affordable contract successes and, more recently, a pick-up in Private Housing activity since mid-January. It is too early to extrapolate but the average weekly reservation rate in Private Housing since mid-January has been 62% higher than for the year to that point
Debt reduction is a clear priority for management and today’s results highlight the progress that has been made in realising cash from the land bank in recent periods. Springfield has one of the largest land banks in Scotland and an excellent reputation in both Private and Affordable Housing.
With increasing confidence in forecasts and improving market sentiment, we believe the 40%+ discount to sector peers is unwarranted and reiterate our ED Fair Value/Share of 130p (Price/ Book multiple of c.1.0x).
Springfield Properties (AIM: SPR), a leading housebuilder in Scotland focused on delivering private and affordable housing, will be conducting an online presentation for investors following the release of their Interim results for the period ended 30th November 2023.
The event will take place at 12.45pm on Thursday 22nd February.
Innes Smith, CEO, Iain Logan, CFO and Martin Egan, COO will be hosting the presentation and answering questions submitted by investors. This is open to all existing and potential shareholders, and registration is free.
You can sign up to register at the link: https://www.equitydevelopment.co.uk/news-and-events/spr-investor-presentation-22feb2024
Still a steal @under£1. Improving 24 macros ( interest rates / inflation); sensible debt reduction programme rather than dividend;significant housing supply constraints; substantial land bank undervalued.
New report with audio summary here: https://www.equitydevelopment.co.uk/research/increasing-confidence-debt-reduction-on-track
Springfield’s half year trading update (six months to Nov ’23) confirms an in-line performance for H1 and reiterates full year expectations. After a challenging period for the sector, it is a reassuring update, pointing to subdued but stable conditions in Private housing, increasing activity within Affordable housing and clear progress with the Board’s debt reduction strategy.
Recent indicators suggest that the market may be stabilising (notably mortgage approvals ticking up in October as interest rates appear to have peaked) giving us confidence to introduce FY25 forecasts within this note.
Springfield’s shares have recovered somewhat over recent weeks, alongside sector peers, but still trade on just 9x P/E and 0.5x P/Book for FY25. With increasing visibility of profit recovery and cash generation, we increase our ED Fair Value to 130p (from 110p) based on a sector average Price/ Book multiple of 1.0x.
I would like to see significantly more land sales in coming months ie. £50m + to reduce our debt burden. The company has more land than we need for the next decade or more and IMO we should have done so before now which is a strategic mistake by the Chairman/CEO as this would have allowed them to maintain the dividend which has hammered the share price. If you look at the major house builders in the UK, they have largely maintained or slightly reduced their dividend payouts but not cut them. More land sales along with new ‘ properly priced’ contracts will gradually lift the share price over the next year. I hope that the UK government may surprise the markets in the Autumn Statement by announcing fresh stimulus for housing in the form of a replacement to the Right to Buy scheme which may be wishful thinking but the national shortage of homes continues unabated and the Tories appear to be lacking ambition after Starmers plans for 300,000 new homes per annum. In a couple of years time this will return to 150p and above so a terrific entry price today.
Springfield has announced the sale of c.9.5 acres of land for £5.2m in cash (£0.5m to be received in the coming days, £4.7m on completion). This is a profitable land sale, which is in keeping with the Group’s focus on debt reduction in an uncertain housing market. This again illustrates the value within the Group’s large landbank and discussions are ongoing with other housebuilders and affordable housing providers about a number of sites.
Springfield has one of the largest landbanks in Scotland. As of 31st May, the Group had 6,712 owned plots and strategic options over a further 3,255 acres (equivalent of a further 33,000 plots). The gross development of the owned landbank is c.£1.9bn, providing firm underpinning for long term shareholder value. We recently initiated coverage - see link here: https://www.equitydevelopment.co.uk/research/an-undervalued-high-quality-growth-story - and continue to see scope for a material re-rating of the shares.
Our Fair Value / share is 110p, based on an undemanding rating of 0.9x Price/ Book.
Link to research report: https://www.equitydevelopment.co.uk/research/land-sale-delivering-on-cash-generation-strategy
The management of Springfield Properties, a leading housebuilder in Scotland focused on delivering private and affordable housing, conducted an investor presentation following the release of FY Results to 31 May 2023.
Sandy Adam (Chairman), Innes Smith (CEO) and Iain Logan (CFO) ran viewers through key highlights from the period, including a record year of completions and strong growth in private housing. Management also discussed the strength of their land bank and how they intend to use it to strengthen their balance sheet.
The full video has been divided into chapters as below:
0:00:00 Introduction to presenting team & Springfield Properties
0:01:03 Key summary points
0:06:40 Financial Review
0:15:21 Operational & Strategic Review
0:21:40 ESG
0:22:50 Conclusion
0:25:02 Questions & Answers
Link to video: https://www.equitydevelopment.co.uk/research/springfield-properties-investor-presentation-fy-results-september-2023
If they released the results at 7 a.m. and gave investors time to digest the details things might have been different. Clearly, there is value here but trying to hide the results would concern me and then it leaves doubt over the actual spring recovery mentioned. My first mortgage was 11% and 3x my gross income, 5% rates are supposedly off-putting as the average price is 10x the average salary. My feeling as an ex-landlord is property prices need to come back to about 7-8x the average salary as the yields on BTL are unattractive. £240k-250k 9-10% decline by Jan 26 is my opinion which matches that of the GBAHP ave price chart falling back into a trend.
Pretty harsh reaction today, to be honest.
Plans to sell approx. 1000 plots for +£50m i.e. current amount of wholly owned plots (+6500) should exceed market cap (and debt) with a substantial margin.
Also, we shouldn't be more than 1 year from SPR returning to +£20m yearly PBT. Current market cap £58m.
All the other builders delivered the same results and outlook, but received a decent share rally afterwards. I guess it's the cancellation of the dividend that hurts.
Here at p/tangible book 0.35 one have to bid (I'd argue). What's not included in that price?
Springfield’s results to May ’23 are in line with expectations, confirming a record year of completions despite a challenging market backdrop. Decisive action has been taken to reduce costs (£4m annualised savings) and the main focus for FY24 is cash generation, which should result in a meaningful reduction in net debt by the year end. Whilst the broader market outlook remains uncertain in the near term, we are encouraged by recent developments in Affordable housing (increase in Scottish Government Affordable Housing Investment Benchmarks) and remain confident in the Group’s long term growth prospects, which are underpinned by the large land bank and a very strong market position (top three builder in Scotland).
As of 31st May, the Group had 6,712 owned plots and strategic options over a further 3,255 acres (equivalent of a further 33,000 plots). The gross development of the owned landbank is c.£1.9bn, providing firm underpinning for long term shareholder value. We recently initiated coverage (An undervalued, high quality growth story) and continue to see scope for a material re-rating of the shares. Our Fair Value / share is 110p, based on an undemanding rating of 0.9x Price/ Book.
Link to full research report & audio summary: https://www.equitydevelopment.co.uk/research/results-in-line-prioritising-cash-generation-in-fy24
I'm not in this but on my watchlist, 48-52p about right until things change. However, releasing results midday to hide them isn't exactly good. Quite a time for anyone to begin to look at takeovers, although my personal view is that the UK property market has got a 2-3yr decline coming. I think Spring 2024 is a bit optimistic.
Current Trading & Outlook
Significantly lower levels of reservations in private housing due to demand being impacted by continued high interest rates, mortgage affordability and reduced homebuyer confidence, which the Board does not expect to materially improve before Spring 2024
Springfield Properties (AIM: SPR), a leading housebuilder in Scotland focused on delivering private and affordable housing, will be conducting an online presentation for investors following the release of their FY results for the year ended 31st May 2023.
The event will take place at 8.30am on Thursday 21st September.
Innes Smith, CEO and Iain Logan, CFO will be hosting the presentation and answering questions submitted by investors. This is open to all existing and potential shareholders, and registration is free.
You can sign up to register at the link: https://www.equitydevelopment.co.uk/news-and-events/spr-fy23-investor-presentation-21sept2023
Builders all up today on Redrow numbers. Why is this one 4% off? Don’t get it. News imminent, or is it a reflection that Springfield have paused affordable housing whilst Vistry state it as the way forward?
July 2023 - "An undervalued, high quality growth story"
Link: https://www.docdroid.net/9Vxp94v/spring1-pdf
August 2023: "Distinctive model in growth market"
Link: https://www.docdroid.net/7Hk8wPO/spring2-pdf
As most of you probably know, Warren Buffets only net purchase the last quarter was three (3) different house-builders. Should you buy it now, trading at multi-year lows and sentiment at peak-fear? Or should we wait until the market recovers fully? Absolute no-brainer.
In short:
£65m mcap
~£16m in profit before tax this year
~18m in profit before tax next year
Over +15 000 plots on the balance sheet. On the balance sheet each plot is valued below £8k. However, Springfield occasionally sell plots themselves at +£80k a plot. Furthermore, use any available real estate portal and let me know if you can find wholly owned land at £8k a plot.
Debt is optically high because it's not bank debt in that sense, but recourse to a seller over 5 years (and based on actual sold plots, and can be deterred).
What are we looking at, 1 or 2 more interest increases? Tops. Housing demand isn't going anywhere.
I increased my position today at 60p.
3 sells of 400k shares at £750k says somethin. Somebodys moving...
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Yes the sector has been pummelled as is normal during a period of high inflation and interest rates. Many will have sold out ( including institutions) over the past year and are waiting for a signal to come back into the sector. Early days but the inflation news today is welcome and a couple of months of falls in the same vein will build confidence for money to come back into equities. A very good entry point for a 12 months + hold.
Huge buys coming in today!
The Rns today has answered my question for me! Considering all the headwinds that face the house building industry, and more especially so in Scotland where rents have been capped, I feel the Rns was very positive. I shall look forward to the September update and if funds permit may add further to my holding.
Full detailed report here: https://www.equitydevelopment.co.uk/research/an-undervalued-high-quality-growth-story
Springfield Properties is one of Scotland’s leading housebuilders. It has an enviable track record of growth and profitability and a reputation for building high quality homes in attractive locations. Whilst market headwinds have increased, in our view the 50% decline in Springfield’s share price over the past year is significantly overdone. The business has navigated previous cyclical downturns impressively and has emerged strongly from them.
We initiate coverage with confidence in the Group’s long term growth prospects and see scope for a material re-rating of the shares as investor sentiment improves.
Whilst sector commentary is likely to remain cautious in the near term, we expect investor sentiment to improve once there are clear signs that inflation is easing and interest rate rises are coming to an end. We initiate coverage with a Fair Value per share of 110p, which is based on a sector multiple of 0.9x Price/ Book. This represents a level c.70% above the current share price.