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Been a follower and holder of this share for quite a while now. Not seen the share price this weak during that time. Does anyone have an overview of how house sales are going for this company at the moment? Is this just SP weakness due to a quiet news flow? Many thanks.
Up and up we go :))
Results due imminently, looks like they will be good :))
I understand that Sandy Adams has been a big supporter of the SNP over the years. Perhaps that support will ease going forward as she will always make decisions which help her politically which is why she is so dangerous as a politician who is typically self-serving. Hope we can wave goodbye to her soon. This is a good buy at 75p as it will return to double these levels and beyond when inflation is brought back under control and interest rates follow them down. Housing will continue to be an important sector to attract investment when the current economic problems are behind us. With more people coming into this country than leave year upon year we will always be on the back foot in satisfying demand. Buy and hold for a couple of years as this is the time to cherry pick bargains in my view. Land bank is just too strong to overlook the upside here.
'In addition, the Group's plans to deliver homes for the private rented sector (PRS) are unlikely to come forward in the next couple of years following the Scottish Government's introduction of a temporary rent freeze.'
At least they are still expecting a profit. No clue as to how much less than last year though.
https://projectscot.com/2022/06/springfield-enjoys-double-success-at-scottish-home-awards/
Making nice progress
I actually think the housing market will crash too. It certainly has had a good run recently. I think the tipping point will be a rise in interest and that is only a matter of time. The US and the UK may deny rising rates as there are obvious other economic factors to consider, but they will not be able to hold it back forever. I see Poland have already increased interest rates and not by the standard 0.25% but a 0.75%.
I have bought here a small amount under £900 just to keep an eye on it more. I'm looking to start adding to it if it drops to around £1.10 and lower.
The market either housing or stock market are about to implode
We are soon to go back into lockdown and building sites will be closed again
The price of food, fuel and building materials are increasing by the day
The cost of house building is increasing by the day, the bubble will burst
The availability of materials has never been so restricted
Wake up people before you loose your shirt
That’s an incredibly low carrying value for a 15,281-plot land bank. To put it into some perspective, the sale of 200 plots of land to two national housebuilders at the end of the financial year accounted for majority of the £15m increase in other income Springfield booked in its accounts. Moreover, with interest rates at record lows, and private housing demand outstripping supply, then both house prices and land prices should continue to trend upwards.
ensibly, Springfield continues to invest in its strategic land bank, acquiring 150 hectares of land at a site at Newton Grange in Edinburgh’s commuter belt for the development of 1,000 new homes. The strategic land was purchased for a bargain basement £2.6m, and that includes a farm house, too. A train station takes commuters to the city withing 15 to 20 minutes, so the location is ideal. The directors can continue to to do so as net debt was slashed last year from £70.9m to £20.8m, so balance sheet gearing is only 19 per cent.
Importantly, shareholders are being rewarded as the dividend has been raised from 2p to 5.75p a share including a final dividend of 4.45p, the pay-out covered 2.5 times by underlying earnings per share (EPS) of 14.4p. Analysts at Progressive Equity Research expect a dividend of 6p a share in the 2021/22 financial year, so the prospective dividend yield is just shy of 4 per cent. The estimate is based on EPS of 14.8p which factors in 1,057 completions with a higher weighting to affordable housing in the mix. Adjusting for the aforementioned land sale, Springfield’s underlying pre-tax profit is forecast to rise by 12 per cent in the current year. There’s certainly scope to make further land deals, but analysts have not factored them into their estimates.
Springfield’s robust trading prospects, solid asset backing and potential for both earnings and dividend growth were key reasons why I included the shares, at 135.6p, in my 2021 Bargain Shares Portfolio. The investment case is even stronger now given the high level of the group’s forward order book, and scope to release substantial hidden balance sheet value from land holdings. Analysts NAV estimates of 117p (May 2022), 128p (May 2023) and 144p (May 2024) only factor in the net profits retained after dividend payments (6p in 2022, 6.8p in 2023, and 7.5p in 2024), further highlighting the progressive value accretion for shareholders.
Importantly, Springfield also ticks the right boxes with its ESG credentials. Around 90 per cent of homes are timber built and utilise in house manufacturing, and half use environmentally friendly air sourced heat pumps. This gives the group a competitive advantage over rivals looking to adopt such build practices.
Priced on around 10 times earnings, offering a near 4 per cent prospective dividend yield, and rated on 1.3 times forward book value, the shares are modestly rated for a company that is forecast to deliver 29 per cent EPS growth over the 2022-24 forecast period. Target 220p
Annual pre-tax profit rises 81 per cent to £18.5m on 51 per cent higher revenue of £216m.
973 properties completed, 33 per cent higher than in 2019/20 financial year.
Record affordable housing order book of £91.5m.
Scottish house price inflation 11 per cent in 12 months to 31 May 2021.
Springfield Properties (SPR: 153p), a housebuilder focused on developing a mix of private and affordable housing in Scotland, flagged up its buoyant trading performance in a pre-close trading in early summer when analysts upgraded their full-year pre-tax profit estimates by 20 per cent on record levels of revenue (‘Exploiting margins of safety’, 1 June 2021). Importantly, the strong momentum has continued into the new financial year.
Springfield’s affordable homes division delivered 380 completions in the 12 months to 31 May 2021 and lifted its revenue contribution by almost 30 per cent to £55m, accounting for 25 per cent of the group total. The unit has a record order book of £91.5m for delivery over the next two years, significantly de-risking sales visibility. Ongoing projects include the construction of 104 affordable flats at The Wisp, Edinburgh with PfP Capital, and 144 homes at Dalmarnock, Glasgow for West of Scotland Housing Association. The two contracts have a combined value of £36.7m excluding follow-on work on a further 132 homes. The Scottish Government has earmarked almost £3.5bn for affordable funding through to March 2026, supporting demand for Springfield’s 4,200 plot strong land bank which has a gross development value (GDV) of £542m.
On the private construction side, completions surged 41 per cent to 593 homes at an average price of £244,000. Springfield’s 11,078 plot land bank has a GDV of £2.6bn of which more than half has planning consent and a further 24 per cent is in the planning process. The group acquired 603 plots in the year to replenish the sold plots. It makes sense to do so at this stage of the cycle given that house prices remain buoyant, rising by 11 per cent in Scotland in the year to 31 May 2021. Springfield’s private homes are proving highly desirable to house hunters, being more spacious and offering gardens and greenspaces. Such is their popularity, that 99 per cent of all homes at Springfield’s Villages have been sold, reserved or are under contract. These are standalone developments close to major cities such as Perth, Dundee, and Elgin. Around 25 per cent of all private completions were from Villages in the 2020/21 financial year, and they could account for around half in the new financial year.
The investment case is de-risked even further when you consider that Springfield’s private land holdings are significantly undervalued in its balance sheet. The group’s latest net asset value (NAV) of £111m (109p a share) includes inventories (land holdings and work in progress) of £157m.
Steady as she goes, I am sure we will see a sustained rise over the next few months. Be interested to see what any Chartists make of the current sp levels.
A great RNS today and some big buys at the end of the day. Should be heading past all time highs by now!
Really happy with the update today , massive debt reduction this year, great land bank, expansion plans are succeeding, let’s keep up the great work.
What can August the 1st bring
Great update!!
Full year 2020/21 revenue expected to be approximately £215m, representing year-on-year growth of 49% and the Group's highest ever annual turnover
· Growth driven by increased sales in private and affordable housing and contribution from strategic land sales
· Substantial increase expected in profit before tax, in line with recently upgraded market expectations
· Net debt reduced to approximately £21m at year end, achieving a £50m reduction compared with £71m at 31 May 2020
Nice update today, let’s hope it generates some interest. Wish I had bought more
Gla
Evening all
I listened into Simon Thompson online stock picking masterclass yesterday and he stated he liked this stock a lot, it was the size of the land bank that impressed me, they have enough plots for 20 years of building at current rates.
After more due diligence I have placed my order .
GLA
The private placing by Chairman and family @ 138p has put the brakes on here. This company flies under the radar, has modest PR so remains undervalued. The CEO and FD really should work more actively with their broker to enhance the company’s profile in the investment community. I suspect that free float is also fairly small. Lots to like here so a case of staying patient and holding until true value is reflected.
There seems to be a few selling here. Why I don't know. The development value of the land owned by the company is worth
£3 billion !!!! M/c presently £146m! Number of homes completed and profit is also increasing.
It’s pathetic Cantseeit. Today looks like a sea of red. But 152 is the buy price and 150.25 the sell price. So I strongly suspect all bar 2 trades so far today are actually buys.
Where do they get the info from for the buy & sell prices ???? I purchased 2000 shares today and they are showing them as a sell on the list. Tell me tell me who does it, it could cost a shareholder money if they are watching the prices move using this chart.
As predicted by ST, a terrific set of interims and outlook for f/y ended 31/05/21. Lower debt, very strong land bank and concept of village housing which has appeal for those who want more space influenced by the pandemic. Under the radar stock with controlling block held by Chairman so difficult to acquire without his acquiescence. Hoping for a good lift today.
Agreed. Simon also points out that they are delivering against a substantial backlog, with more demand. I think potential buyers just see this as another “property” share and with stamp duty exemption disappearing shortly plus the price for Redrow and others falling, people aren’t realising the value here. I am staying in
I agree that debt can be issue but with ultra low interest rates expected to persist for some years this is a cheap way to achieve rapid growth. The reduction in borrowings seen over the last year was notable and the interims will give us an update on current position as we come out of lockdown and people start to get on with their lives again. Properties in ‘village’ communities at affordable prices are likely to be attractive for the foreseeable future. With Sandy Adams having such a large holding directly and indirectly and the company having a relatively low profile I would like to know how senior management intend to enhance the company’s profile in the investment community. IC’s piece was perfect but momentum needs to be maintained IMO and I will seek to understand how they can do so when the interims come out. Hopefully the results will do most of the talking.
I have been in SPR since well before it dipped in the lock down and is now rising again - what attracted me was also the only listed house builder in Scotland (big fish in a small pond) and then it's tie up with Sigma PRS to build for private rented houses that gives it an extra secure outlet in balance to private sales.
It's relatively poor profit margins (to other listed builders) should also mean an ability to increase these and further amplify profit that is not currently priced in.
Just for balance the main downside was it's borrowings and already poor margins if house sales did dry up.