Springfield Pr. Share News (SPR)

(Sharecast News) - Scottish housebuilder Springfield Properties said on Wednesday that trading in the first half had been in line with management expectations, setting the group on a course to meet its debt reduction targets.

Springfield Properties said demand in private housing had remained "stable but subdued" in the six months ended 30 November, and said it had recommenced the signing of new affordable-only housing contracts, with roughly £24.0m of new contracts entered into.

The AIM-listed firm noted that two profitable land sales were agreed to in the half for a total of £9.3m, with funds to be received by the end of the financial year, and said building cost inflation continued to reduce mad was now expected to be roughly 4% for the first half.

Springfield Properties said net bank debt as of 30 November 2023 was roughly £94.0m, not including the approximately £8.8m outstanding proceeds from recent land sales, and noted it was on track to meet its target of reducing net bank debt to around £55.0m by 31 May 2024.

"The group expects results for the first half of 2024 to be in line with management expectations. While there remains uncertainty in the near-term market, the group is confident of meeting market expectations for the year to 31 May 2024, with growth anticipated in H2 over H1 across the business, in line with usual seasonality, and with a significant contribution from land sales," said Springfield.

"Looking further ahead, the board is encouraged by the early indications of a return in homebuyer confidence, with inflation reducing and the Bank of England holding interest rates for two consecutive months. Build cost inflation continues to moderate and there is greater availability of materials and subcontractors. The interest that the group is receiving in its land bank - and at attractive valuations - reflects the market preparing for an upturn in trading conditions."

As of 1110 GMT, Springfield shares were untraded at 74.0p.

Reporting by Iain Gilbert at Sharecast.com