Springfield Pr. Share Price (SPR)

Innes Smith (CEO) and Iain Logan (CFO) of Springfield Properties hosted an Investor Presentation covering detailed highlights of the company's Half Year results for the six months ended 30 November 2024.

Management discussed the transformational land sale to Barratt Redrow for £64.2m which will accelerate the removal of debt, and a more focussed strategy to capitalise, in particular, on the significant opportunity in the North of Scotland. The team then answered a range of questions submitted by investors.

The full video recording is available for viewing, divided into chapters as below:

0:00:00 H1 period highlights & Barratt Redrow deal

0:12:13 Financial review & Land Bank

0:17:44 Operational Review

0:08:03 Land Bank

0:24:04 Conclusion

0:24:38 Questions & Answers

Link here: https://www.equitydevelopment.co.uk/research/springfield-properties-investor-presentation-hy-results-feb2025

Our local office have been given notice. Looks like move north is already in motion. Back in GLA

New research report with audio summary here: https://www.equitydevelopment.co.uk/research/transformational-land-sale-to-eliminate-debt

Springfield has announced interim results, which are in line with expectations.

The more significant news is a profitable land sale, with the Group selling 2,480 plots to Barratt Redrow for £64.2m. This triggers a material upgrade to revenue and profit expectations in the current year and will eliminate net debt in FY27, as proceeds are received in four instalments.

The land sale will complete by 31 May 2025, with the cash consideration of £64.2m being paid in four tranches over the next four years, with approximately 50% being received in the current financial year.

Springfield will retain a large landbank with 9 years’ visibility at current build rates, with a more focused strategy to capitalise, in particular, on the significant opportunity in the North of Scotland. We believe the deal makes excellent strategic sense, whilst proving the value of the Groups’ substantial land holdings.

Whilst excellent progress has been made on cash generation in recent periods, we believe that the Group’s relatively high debt level has been a factor in the Group’s persistent valuation discount (currently c.15% discount to peers on P/Book basis). Today’s deal should remove any concerns on that front and validate Springfield’s net asset value.

We increase our Fair Value estimate to 150p per share (from 140p), conservatively based on 1x P/Book (FY25E).

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 2024.

The event will take place at 09.00am on Wednesday 19th February.

Innes Smith (CEO) & 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 here: https://www.equitydevelopment.co.uk/news-and-events/spr-investor-presentation-19feb2025

Springfield’s H1 update reiterates current year expectations and reinforces our confidence in the medium-term outlook for the Group.

Momentum in private housing reservations was sustained through the first half, whilst the affordable housing business achieved a significant increase in gross margin driven by contracts won in the prior year.

Affordable housing providers have been more hesitant in awarding contracts in recent months but last week’s Scottish budget confirmed a material increase in funding for affordable homes delivery in FY25/26, which should stimulate activity into FY26. Springfield continues to engage with stakeholders in the major infrastructure projects planned for the North of Scotland, where it has a significant landholding.

Springfield continues to trade at a c.30% discount to peers, which in our view overlooks the Group’s unique positioning, the likely tailwind from the increased affordable housing budget and clear potential for major investment in housing delivery in Springfield’s stronghold in the North of Scotland.

We remain confident in the Group’s growth outlook and reiterate our 140p Fair Value estimate.

Link to latest research report (freely accessible): https://www.equitydevelopment.co.uk/research/confident-h1-update-positive-market-developments