TIDMSPR
RNS Number : 5052Q
Springfield Properties PLC
21 February 2023
21 February 2023
Springfield Properties plc
("Springfield", the "Company", the "Group" or the "Springfield
Group")
Interim Results
Springfield Properties (AIM: SPR), a leading housebuilder in
Scotland focused on delivering private and affordable housing,
announces its interim results for the six months ended 30 November
2022.
Financial Summary
H1 2023 H1 2022 Change
GBPm GBPm
Revenue 161.9 87.3 +85%
Private housing revenue 118.6 47.3 +151%
Affordable housing revenue 27.9 31.7 -12%
Contract housing revenue 10.6 7.5 +41%
Other revenue* 4.8 0.8 +500%
Gross margin 14.0% 18.5% * 450bps
Adj. operating profit** 8.2 6.8 +21%
Operating profit 7.6 6.7 +13%
Adj. profit before tax** 6.6 6.4 +3%
Profit before tax 5.9 6.2 -5%
Adj. basic EPS (p) 4.68 5.09 -8%
Basic EPS (p) 4.24 4.93 -14%
* Includes land sales of GBP3.7m in H1 2023 (H1 2022:
GBP0.1m)
** Adjusted to exclude exceptional costs of GBP0.6m (H1 2022:
GBP0.2m) (See the Financial Review for further detail)
Operational Summary
-- Strong growth during the period in private housing,
reflecting acquisitions of Tulloch Homes and Mactaggart &
Mickel Homes and organic growth despite challenging market
backdrop
-- Significant impact from build cost inflation, particularly on
fixed-price contracts in affordable housing, affecting margins
across the Group
-- Decisive action taken during, and post, period across the
business to address the market conditions, resulting in expected
annualised cost savings of approximately GBP3.0m
-- Strategic acquisition of the Scottish housebuilding business
of Mactaggart & Mickel Group Ltd ("Mactaggart & Mickel
Homes") on 21 June 2022, a premium brand housebuilder with a land
bank in highly desirable locations within the Central Belt of
Scotland
-- Private housing
o 429 private homes were completed (H1 2022: 197), reflecting
acquisitions of Tulloch Homes and Mactaggart & Mickel Homes and
organic growth
o Sales for this current financial year are largely protected by
the Scottish missive system with approximately 94% of market
forecast private housing revenue for 2023 secured
o Reduced homebuyer confidence impacted private housing
reservations towards the end of the period
o Since period end, the Group has been encouraged by the
reservation levels across its brands
-- Affordable housing
o Strategic decision taken to temporarily pause entering new
long-term affordable housing contracts until market conditions
improve
o 175 affordable housing completions (H1 2022: 204), with
revenue and margin impacted by build cost inflation due to
industry-wide model of fixed-price contracts
-- Contract housing
o Progressed delivery of first contract for private rented
sector ("PRS") housing, with final handovers occurring post
period
o Plans for the delivery of further PRS housing were withdrawn,
following the Scottish Government's intervention in rent
control
-- Proportion of land bank with planning permission at 30
November 2022 was 55.0% (31 May 2022: 52.1%):
o Planning approval obtained for 753 homes
o An additional 533 homes with planning were received through
the Mactaggart & Mickel Homes acquisition
-- Completed a strategic land sale to generate GBP3.7m; will
consider further opportunities where the terms and price are
desirable
-- Total land bank of 16,975 plots at period end (31 May 2022:
16,652) with Gross Development Value ("GDV") of GBP3.7bn (31 May
2022: GBP3.5bn)
Innes Smith, Chief Executive Officer of Springfield Properties,
commented: "This has been a challenging period for the
housebuilding industry with significant headwinds having a combined
effect, which largely offset the excellent growth that we achieved
in private housing. The UK government's mini-budget in September
reduced the confidence of homebuyers and the cost of mortgages
increased significantly. Our affordable housing business was
greatly impacted by build cost inflation and, with the Scottish
Government still to review its affordable housing investment
benchmark, it is not currently possible to continue building
affordable homes at the same pace as we have in the past. Our plans
to deliver additional homes for families through PRS were
unfortunately withdrawn as a result of the Scottish Government's
intervention in rent control. Plus, while one land sale to a
housebuilder was achieved, the industry-wide stalling of land
purchases meant that we could not secure acceptable value for
additional sales.
"We have taken decisive action in response to these conditions.
We've paused entering new long-term affordable housing contracts
and reduced our fixed cost base. We've made a strategic land sale
on good terms; reduced land buying activity; and are approaching
new site openings with caution. We are also encouraged by the signs
that market conditions are improving. While it is too early to call
a recovery, the green shoots we are experiencing and which are
being seen across the industry, through increased reservations and
visitor levels, are encouraging.
"The foundations of Springfield remain strong. We offer high
quality, energy efficient homes in popular locations across
Scotland and have a large land bank, over half of which has
planning. This, combined with the actions we are taking as we focus
on reducing our net debt position, provides an excellent platform
from which we can take advantage as the markets continue to improve
and we remain confident in our future prospects and ability to
generate shareholder value."
Enquiries:
Springfield Properties
Sandy Adam, Chairman
Innes Smith, Chief Executive Officer +44 1343 552550
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Singer Capital Markets
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Shaun Dobson, James Moat, Oliver Platts
(Investment Banking) +44 20 7496 3000
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Gracechurch Group
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Harry Chathli, Claire Norbury +44 20 4582 3500
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Results Presentation
Innes Smith, Chief Executive Officer, Michelle Motion, Chief
Financial Officer, and Martin Egan, Chief Operating Officer, will
be holding a presentation for analysts at 9.00am GMT today at the
office of Gracechurch Group, Fourth Floor, 48 Gracechurch Street,
London, EC3V 0EJ. To register to participate, please contact
henrygamble@gracechurchpr.com
Operational Review
During the first half of 2023, the Group delivered its highest
number of completions in a six-month period, at 673 (H1 2022: 459).
This was driven by the Group's private housing, which grew on an
underlying basis and by the contributions from Tulloch Homes and
Mactaggart & Mickel Homes, which were acquired in H2 2022 and
at the start of the period respectively.
The Group's growth was achieved against an increasingly
difficult market backdrop, with significant build cost inflation,
which particularly impacted affordable housing, and reduced
homebuyer confidence resulting from rising mortgage rates and
cost-of-living challenges, which peaked around the time of the UK
Government's mini-budget. Following the Scottish Government's
intervention in rent control, the Group's plans for expanding its
PRS housing activity were withdrawn, with its planned land sales
and construction contracts falling through.
However, as described further below, the Group has acted
decisively to address these conditions. The Group took the
strategic decision, during the period, to temporarily halt entering
new long-term affordable housing contracts, which are more exposed
to inflationary pressures due to the fixed-price nature of
contracts, and it is carefully considering the opening of new
private housing developments. Other actions include reducing land
buying activity to retain capital; pausing recruitment and reducing
staffing levels in areas most impacted by the market downturn; and
maintaining tight cost control, including identifying synergies
across the business. In addition, the Group completed a strategic
land sale during the period - albeit the Group's expectations of
selling further land did not come to fruition as the terms on offer
were not favourable as land purchases stalled across the industry.
The Group continues to consider opportunities for land sales where
they represent strong value.
Land Bank
During the period, the Group strengthened its land bank with the
acquisition of Mactaggart & Mickel Homes. This comprised a
total of 701 plots in highly desirable locations within the Central
Belt of Scotland.
At the same time, the Group continued to realise value from its
large, high-quality land bank, and thereby strengthening the
balance sheet, with the strategic sale of land (of approximately 60
plots) to a national housebuilder. Springfield will consider
further opportunities for strategic sales or land swaps where the
terms and price are desirable. In addition, in response to the
current market conditions, the Group has significantly reduced its
land buying activity, and is focused on realising the value of its
existing land bank.
As at 30 November 2022, the Group had 56 active developments (31
May 2022: 51 active developments) and during the period:
-- 10 developments were completed;
-- 15 new active developments were added to the land bank (of
which 9 were under Mactaggart & Mickel Homes);
-- Planning was granted on 753 plots on 6 developments;
-- the Group received 533 plots with planning through the Mactaggart & Mickel Homes acquisition;
-- resulting in the total consented land bank increasing to
9,337 plots, representing 55.0%, at 30 November 2022 (31 May 2022:
8,680 plots and 52.1%); and
-- the land bank consisted of 16,975 plots (31 May 2022: 16,652).
Private Housing
The number of private home completions increased by 117.8% to
429 (H1 2022: 197). This reflects growth across the majority of the
Group's brands and regions as well as the contributions from
Tulloch Homes and Mactaggart & Mickel Homes.
As previously noted, demand for private housing was sustained
during much of the first half of the year, but against a
challenging market backdrop that began to impact reservations
materially towards the end of the period. The Group has been
encouraged, however, by the reservation levels across its business
during January and February 2023. This is being supported by
falling mortgage rates and an increase in customers visiting the
Group's sales offices as homebuyers adjust to the market
conditions.
The Group's private housing secured sales for the current
financial year are largely protected by the Scottish missive
system. As a result, the Group remains on track for good growth for
the full year. The Group currently has homes delivered, missived or
reserved representing approximately 94% of market forecast private
housing revenue for 2023.
The average selling price ("ASP") for private housing was
GBP277k (H1 2022: GBP240k). This reflects the regional and
housing-type mix, including the contribution from Tulloch Homes and
Mactaggart & Mickel Homes, which have higher selling prices
than the rest of the Group, as well as a general increase in sales
prices. This served to mitigate some of the build cost inflation in
private housing during the period. As previously stated, private
house price growth is no longer anticipated in the short term,
however the Group is pleased to note that selling prices have
remained stable across its developments post period end, supported
by the established reputation of high quality across its
brands.
As at 30 November 2022, Springfield was active on 38 private
housing developments (31 May 2022: 31), with 10 active developments
added during the period, of which 9 were from Mactaggart &
Mickel Homes, and 3 developments completed. In total, as at 30
November 2022, the private housing land bank consisted of 11,920
plots on 83 developments (31 May 2022: 11,565 plots on 74
developments). As previously stated, in response to market
conditions, the Group is taking a cautious approach to opening new
developments, including undertaking 'soft launches' to test the
market before making further investment into site
infrastructure.
Planning consent was granted for 492 plots on 5 developments for
private housing, and the Group gained 512 private plots (394 with
planning) through the acquisition of Mactaggart & Mickel Homes.
As at 30 November 2022, 54.5% (6,500 plots) of private housing
plots had planning consent (31 May 2022: 52.2%), with 21.8% going
through the planning process and 23.6% at the pre-planning
stage.
Village developments
Springfield Villages are standalone developments that include
infrastructure and neighbourhood amenities. Each Village is
designed with the potential to deliver up to approximately 3,000
homes, with ample green space and community facilities. They
primarily offer private housing, but also include affordable
housing and, at Bertha Park, PRS housing. The Group has three
Villages that are already home to growing communities; one Village
that has received planning permission with the Section 75 agreement
to follow; and a further Village going through the planning
process.
Demand for Springfield's Villages remains high, driven by the
desirability of larger family housing, with local amenities and
commuting distance to major cities. In total, there were fewer
private housing completions at the Villages than in the first half
of the previous year, which reflects the phasing of homes being
made available for sale.
There was also a continued expansion of amenities and
strengthening of community engagement at the Village developments.
The success of Springfield's Villages has been recognised by
several industry awards. This includes Bertha Park being named
Large Development of the Year by the Scottish Homes Awards in June
2022 and Best Sustainable Development by WhatHouse? Awards, which
celebrates residential developments across the UK, in November.
Dykes of Gray also received the silver award for Best Public Realm
from WhatHouse?, reflecting the Group's commitment to
sustainability, quality and placemaking.
Affordable Housing
Margin in affordable housing was significantly impacted by build
cost inflation due to the industry's model of fixed-price
contracts. In particular, margin suffered from the delivery of two
large, long-term contracts that had been signed in early 2020 and
were therefore based on expectations of lower material and labour
costs. The Group was also impacted by key subcontractors going out
of business, which necessitated the Group finding replacement
subcontractors that led to some delays and higher costs. In
addition, the Scottish Government is yet to review its affordable
housing investment benchmark to take into account the recent
inflation.
As a result, during the period, Springfield took the decision to
pause entering into new long-term affordable contracts, and it has
maintained this position since period end. However, the Group
believes that the longer-term fundamentals of affordable housing
remain strong and it expects to recommence signing contracts when
more normal market conditions resume.
The Group completed 175 affordable homes during the first half
of 2023 (H1 2022: 204). Average selling price was in line with the
same period of the prior year at GBP159k (H1 2022: GBP155k).
The number of active affordable housing developments was 16 at
30 November 2022 (31 May 2022: 18), with 5 active developments
added during the period and 7 developments completed. As at 30
November 2022, the total affordable housing land bank consisted of
4,439 plots on 61 developments (31 May 2022: 4,412 plots on 60
developments).
As at 30 November 2022, 50.0% (2,221 plots) of affordable
housing plots had planning (31 May 2022: 44.8%), with 27.2% of
plots going through the planning process and 22.8% at the
pre-planning stage.
Contract Housing
In contract housing, the Group provides development services to
third party private organisations (compared with affordable housing
where the Group's services are delivered to local authorities,
housing associations or other public bodies). To date, contract
housing delivery has largely consisted of services provided to
Bertha Park Limited, the developer of the Bertha Park Village,
under a framework agreement. Springfield performs development
services and receives revenue based on costs incurred plus a fixed
mark up. During the period, it also included a small number of PRS
houses through Mactaggart & Mickel Homes.
As at 30 November 2022, the contract housing land bank with
planning consent consisted of 616 plots (31 May 2022: 675). The 69
homes completed during the period (H1 2022: 58) comprised 27
private homes, 8 affordable homes and 24 PRS homes at Bertha Park
Village as well as 10 homes through Mactaggart & Mickel
Homes.
Post period, the Group completed the final handovers of homes
under its first PRS contract. As previously noted, the Group's
plans to deliver further PRS homes have been withdrawn. The
Scottish Government's intervention in rent control has created
uncertainty and reduced the appetite of PRS providers to invest in
Scotland.
Acquisition
During the period, Springfield continued to execute on its
stated strategy of expanding via acquisition and into new
territories to accelerate growth. On 21 June 2022, Springfield
acquired the Scottish housebuilding business of Mactaggart &
Mickel Group Ltd for a total consideration of GBP46.3m. Mactaggart
& Mickel Homes is a premium brand housebuilder that has been
delivering high-quality housing across the Central Belt of Scotland
for almost 100 years. Under the terms of the acquisition, the Group
acquired six live private and affordable sites with work in
progress, and acquired a brand licence to build homes as Mactaggart
& Mickel Homes on a further 11 private and affordable sites,
which would transfer to Springfield as homes are sold in line with
the payments of the deferred consideration.
The acquisition also included Timber Systems, a timber frame
factory near Glasgow. The addition of a second timber frame
factory, to complement Springfield's pre-existing facility in
Elgin, will secure kit supply and increase capacity for future
growth while further reducing the Group's carbon footprint. Since
acquisition, the Group has progressed transitioning the use of the
new factory, which is now supplying a number of the Group's private
and affordable developments as well as new commercial opportunities
arising. In addition, as part of the consolidation progress, the
Group restructured the Mactaggart & Mickel Homes business,
which is expected to generate cost savings going forward.
Financial Review
For the six months ended 30 November 2022, revenue increased by
85.6% to GBP161.9m (H1 2022: GBP87.3m). This primarily reflects
significant growth in private housing along with a strategic land
sale and increased revenue in contract housing.
Revenue H1 2023 H1 2022 Change
GBP'000 GBP'000
Private housing 118,626 47,257 +151.0%
--------- --------- --------
Affordable housing 27,843 31,670 -12.1%
--------- --------- --------
Contract housing 10,634 7,510 +41.6%
--------- --------- --------
Other* 4,827 833 +479.5%
--------- --------- --------
TOTAL 161,930 87,270 +85.6%
--------- --------- --------
*Primarily land sales
Private housing remained the largest contributor to Group
revenue, accounting for 73.3% (H1 2022: 54.2%) of total sales, and
increased by GBP71.4m to GBP118.6m. This significant growth was
driven mainly by the contributions from Tulloch Homes, which was
acquired in H2 2022, and from Mactaggart & Mickel Homes, which
was acquired at the start of the period, as well as increased sales
on an organic basis.
The reduction in affordable housing revenue to GBP27.9m (H1
2022: GBP31.7m) reflects some reduction in activity as well as
continued inflation in expected development costs.
In contract housing, revenue grew as the Group neared the
completion of delivery of its contract for PRS homes at Bertha
Park; completed two PRS developments for Mactaggart & Mickel
Homes; and generated increased revenue from private housing
delivery at Bertha Park. There was also a significant increase in
other revenue, driven by GBP3.7m received from a strategic land
sale at a Walker site (H1 2022: GBP0.1m in land sales).
Gross profit increased by 41.0% to GBP22.7m (H1 2022: GBP16.1m)
due to the growth in revenues. Gross margin was 14.0% (H1 2022:
18.5%), which reflects a significant reduction in affordable
housing margin as well as a reduction in private housing margin,
primarily reflecting sales mix. In private housing, higher costs
impacted the margin of a small number of sites that were reaching
the end of development. However, in general, cost price inflation
in private housing was softened by house sales price inflation. In
affordable housing, margin was significantly impacted by the
industry-wide inflation in materials and labour costs as a result
of the fixed-price nature of the Group's contracts in this area of
the business. As noted, the Group has paused entering into new
long-term contracts in affordable housing until normal market
conditions resume.
Administrative expenses, excluding exceptional items, were
GBP14.7m (H1 2022: GBP9.4m). This reflects the increase in
overheads from the acquisitions of Tulloch Homes and Mactaggart
& Mickel Homes. The Group, however, focused on tight cost
control during the period and, accordingly, administrative
expenses, excluding exceptional items, as a proportion of revenue
decreased to 9.1% in H1 2023 from 10.8% in H1 2022. In addition,
during the period, the Group undertook a restructuring of the
acquired Mactaggart & Mickel Homes business to consolidate some
of the operations with the existing Group. This, combined with the
other actions that the Group has taken and is taking to reduce its
fixed cost base, is expected to generate further savings of
approximately GBP3.0m on an annualised basis.
Finance costs were GBP1.7m (H1 2022: GBP0.5m), which represents
greater bank interest payments due to the rise in interest rates
and the increase in bank debt to fund the Mactaggart & Mickel
Homes acquisition.
Exceptional items during the period were GBP0.6m (H1 2022:
GBP0.2m). This mainly relates to the Mactaggart & Mickel Homes
acquisition.
Operating profit grew by 13.4% to GBP7.6m (H1 2022: GBP6.7m).
Excluding exceptional items, operating profit increased by 20.6% to
GBP8.2m (H1 2022: GBP6.8m). Adjusted profit before tax and
exceptional items increased by 3.1% to GBP6.6m (H1 2022: GBP6.4m)
and statutory profit before tax decreased by 4.8% to GBP5.9m (H1
2022: GBP6.2m), which reflects the increased bank interest payments
and exceptional items described above.
Basic earnings per share (excluding exceptional items) were 4.68
pence (H1 2022: 5.09 pence). Statutory basic earnings per share
were 4.24 pence (H1 2022: 4.93 pence).
Net debt at 30 November 2022 was GBP73.7m (31 May 2022:
GBP38.0m; 30 November 2021: GBP43.0m). The increase over the
six-month period primarily reflects 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. The increase
compared with the same time of the previous year also includes the
funding of the Tulloch Homes acquisition.
The Group continues to have a strong relationship with the Bank
of Scotland. The Group's revolving credit facility of GBP87.5m is
in place until January 2025 and the Group also has a GBP2.5m
overdraft facility that is renewed annually. On 30 December 2022,
the overdraft facility was increased by GBP10m to GBP12.5m for the
period until May 2023, to provide extra short-term headroom.
In June 2022, the Group acquired Mactaggart & Mickel Homes
for a total consideration of GBP46.3m, comprising GBP10.5m cash
paid on completion and a deferred cash consideration of GBP35.8m to
be paid proportionally as homes are sold over a five-year period.
The acquisition is being funded from Springfield's internal
resources and existing debt facilities with Bank of Scotland.
Customer Satisfaction
The Group maintained its strong focus on customer satisfaction
and is pleased to report that, in customer surveys received in this
financial year to date, 94% of customers reported that they would
recommend the Group to a friend.
This is reflected in initiatives such as the introduction and
roll out, during the period, of a new website format to the
Springfield Properties, Walker Group and Dawn Homes brands that is
designed to improve the user experience for homebuyers visiting
online. Following customer feedback on the importance of energy
efficiency, a comprehensive instructional video was shared with
customers on the operation of the hybrid air-source heating systems
installed in their homes to ensure they were able to maximise
efficiency savings.
In rolling out a new Quality Management System across each of
the brands within the Group, Springfield achieved re-certification
of ISO9001 in October. In July, the Group registered for the New
Homes Quality Board Code of Practice ("NHQB Code"), which aims to
improve consumer protections covering important aspects of the new
home construction, inspection and sales process. Post period, the
Group has been preparing for the activation of the NHQB Code this
spring, including setting up training for customer facing staff and
programming construction to allow customers to inspect their home
two weeks prior to handover.
Environment & People - ESG
The Group's inherent culture of looking after the environment,
through the design of energy efficient homes within sustainable
communities, and looking after people, through engagement with
stakeholders and looking after customers and employees, was
formalised during the period through the publication of the Group's
first ESG strategy. Good progress has been demonstrated against a
number of the first-year objectives set within the strategy.
During the period, the Group introduced new statistics for
monitoring Health & Safety and Waste, undertook a comprehensive
survey on customer attitudes to sustainability and achieved a
significant milestone in the development of an Environmental
Management System with Springfield gaining ISO14001 certification.
Crucially, to ensure governance of ESG within the Group itself, a
new Board Committee was created during the period, and which has
since met three times. The Committee, chaired by the Group's CEO,
has agreed a project plan and an approach to reporting on
progress.
Post period, the Group published its first Equality, Diversity
& Inclusion Policy and refreshed its Modern Slavery Statement,
reinforcing its commitment to looking after employees. With the aim
of promoting wider resilience, the Group has also written to each
of its suppliers to raise awareness of Springfield's commitments to
sustainability and to survey the supply chain on their own progress
with ESG.
Markets
The market backdrop during the period, and subsequently, has
remained challenging across the Group's activities. Material and
labour supply constraints and, consequently, build cost inflation
persisted. In private housing, the increase in interest and
mortgage rates, combined with the ongoing cost-of-living pressures,
reduced affordability and impacted homebuyer confidence. However,
as noted, the Group is now experiencing signs of stabilisation in
this respect, with customers adjusting to the market conditions and
mortgage rates beginning to reduce, supported by greater
affordability in Scotland compared with the wider UK. In addition,
with the vast majority of sales within the Group being to second-,
third- or fourth-time buyers, the Group's customer base is less
exposed to higher interest rates because mortgages tend to be at a
lower loan to value.
In affordable housing, the Scottish Government is yet to review
its affordable housing investment benchmark. The policy environment
for PRS housing continues to be uncertain following the Scottish
Government's intervention with a temporary rent freeze in September
2022, which was replaced by a temporary rent cap in January
2023.
Nonetheless, the medium- to long-term fundamentals of the
housing market in Scotland remain strong. There is an undersupply
of housing across all tenures, which will continue to be
exacerbated by population growth. The Scottish Government maintains
its commitment to delivering 110,000 energy efficient affordable
homes by 2032. There is also increased interest from homebuyers in
energy efficient private homes, which the Group's offer caters
to.
Dividend
While the Group maintains a strong financial position, given the
continued market uncertainty, the Board has taken the decision not
to propose an interim dividend for the six months ended 30 November
2022. The Board recognises the importance of the dividend to
shareholders, but believes that this, alongside other measures that
the Group is taking to preserve its cash position, is an
appropriate and prudent measure to preserve liquidity in these
uncertain times. The Board will consider the payment of any final
dividend for FY 2023 in light of the position and outlook of the
Group at that time.
Outlook
The Group remains on track to deliver good revenue growth for FY
2023, driven by strong secured sales in private housing. The
Scottish missive system, which ensures that customers are
contracted into the purchase much earlier in the build programme,
means revenue expectations for the current financial year are
largely protected. In addition, with the actions that the Group is
taking in response to the challenging market conditions, the Group
is confident that it will be able to manage the inflationary
pressures and report profit for the full year to 31 May 2023 in
line with market expectations.
Looking further ahead, the Board is encouraged by the
reservation levels experienced across its private housing business
during January and February 2023. However, it is taking a cautious
approach to future sales rates given the continued market
uncertainty. The Group is maintaining tight cost control and will
continue to closely monitor market conditions to ensure it can
respond in a timely manner as required.
The Board continues to believe that the fundamentals of the
business remain strong. The Group offers high quality, energy
efficient homes in popular locations across Scotland under multiple
highly respected brands. The large land bank, over half of which
has planning permission already granted, provides visibility. As a
result, and combined with the Group focusing on reducing its net
debt position, this provides Springfield with an excellent platform
from which to take advantage of the next upturn in the market
cycle. In addition, there remains an undersupply of all tenures of
housing across Scotland, with the Scottish Government committed to
investing in the delivery of more affordable homes and there being
greater affordability of private housing compared with the UK as a
whole.
As a result, while the current period is not without its
challenges, the Board remains confident in the Group's prospects
and in its ability to generate shareholder value.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE HALF YEARED 30 NOVEMBER 2022
Unaudited Unaudited Audited
Period to Period to Year to
30 November 30 November 31 May
2022 2021 2022
Note GBP000 GBP000 GBP000
Revenue 4 161,930 87,270 257,095
Cost of sales (139,235) (71,151) (213,960)
-------------
Gross profit 4 22,695 16,119 43,135
Administrative expenses
before exceptional items (14,713) (9,386) (20,950)
Exceptional items 5 (643) (163) (1,100)
------------- ------------- ------------
Total administrative expenses (15,356) (9,549) (22,050)
Other operating income 215 88 396
------------- ------------- ------------
Operating profit 7,554 6,658 21,481
Finance income 66 66 134
Finance costs (1,700) (512) (1,889)
------------- ------------- ------------
Profit before taxation 5,920 6,212 19,726
Taxation 6 (896) (1,170) (3,652)
------------- ------------- ------------
Profit for the period
and total comprehensive
income 4 5,024 5,042 16,074
============= ============= ============
Profit for the period
and total comprehensive
income is attributable
to:
* Owners of the parent company 5,024 5,042 16,074
============= ============
Earnings per share
Basic earnings per share 7 4.24p 4.93p 14.74p
Diluted earnings per share 7 4.12p 4.84p 14.37p
The Group has no items of other comprehensive income.
The accompanying notes form an integral part of these financial
statements
CONSOLIDATED BALANCE SHEET - AS AT 30 NOVEMBER 2022
Unaudited Unaudited Audited
30 November 30 November 31 May
2022 2021 2022
Non-current assets Note GBP000 GBP000 GBP000
Property, plant and equipment 7,778 4,935 5,799
Intangible assets 5,665 1,649 5,758
Investments - - 520
Deferred taxation 1,893 524 2,133
Accounts receivable 5,381 5,324 5,641
------------- ------------- --------
20,717 12,432 19,851
------------- ------------- --------
Current assets
Inventories 283,786 185,809 230,095
Trade and other receivables 25,721 22,742 21,363
Corporation tax 149 191 -
Cash and cash equivalents 19,369 70,887 16,390
------------- ------------- --------
329,025 279,629 267,848
------------- ------------- --------
Total assets 349,742 292,061 287,699
Current liabilities
Trade and other payables 62,954 57,996 68,513
Short-term bank borrowings - 43,200 -
Deferred consideration 10 14,023 - 6,119
Short-term obligations under
lease liabilities 1,677 902 1,284
Provisions 12 821 - 821
Corporation tax - - 273
79,475 102,098 77,010
------------- ------------- --------
Non-current liabilities
Long-term bank borrowings 87,208 67,422 50,486
Long-term obligations under
lease liabilities 4,148 2,322 2,670
Deferred taxation 3,651 2,861 3,726
Deferred consideration 10 27,954 - 6,455
Contingent consideration 11 2,000 3,900 2,000
Provisions 12 1,819 961 1,825
------------- ------------- --------
126,780 77,466 67,162
------------- ------------- --------
Total liabilities 206,255 179,564 144,172
Net assets 143,487 112,497 143,527
============= ============= ========
Equity
Share capital 9 148 128 148
Share premium 9 78,744 57,262 78,744
Retained earnings 64,595 55,107 64,635
------------- ------------- --------
Equity attributable to owners
of the parent company 143,487 112,497 143,527
============= ============= ========
The accompanying notes form an integral part of these financial
statements
CONSOLIDATED Statement of Changes in Equity
FOR THE HALF YEARED 30 NOVEMBER 2022
Share Share Retained Total
capital premium earnings
Note GBP000 GBP000 GBP000 GBP000
1 June 2021 128 56,761 54,341 111,230
Share issue - 501 - 501
Total comprehensive
income for the
period - - 5,042 5,042
Dividends 8 - - (4,558) (4,558)
Share-based payments - - 282 282
--------- --------- ---------- --------
30 November 2021 128 57,262 55,107 112,497
Share issue 20 21,482 - 21,502
Total comprehensive
income for the
period - - 11,032 11,032
Dividends 8 - - (1,776) (1,776)
Share-based payments - - 272 272
--------- --------- ---------- --------
31 May 2022 148 78,744 64,635 143,527
Total comprehensive
income for the period - - 5,024 5,024
Dividends 8 - - (5,568) (5,568)
Share-based payments - - 504 504
--------- --------- ---------- --------
30 November
2022 148 78,744 64,595 143,487
========= ========= ========== ========
The share capital accounts record the nominal value of shares
issued.
The share premium account records the amount above the nominal
value for shares issued, less share issue costs.
Retained earnings represents accumulated profits less losses and
distributions. Retained earnings also includes share-based
payments.
The accompanying notes form an integral part of these financial
statements
CONSOLIDATED Statement of Cash Flows
FOR THE HALF YEARED 30 NOVEMBER 2022
Unaudited Unaudited Audited
Period Period Year to
to to 31 May
30 November 30 November 2022
2022 2021
Cash flows generated from operations GBP000 GBP000 GBP000
Profit for the period 5,024 5,042 16,074
Adjusted for:
Exceptional items 643 163 1,100
Taxation charged 896 1,170 3,652
Finance costs 1,700 512 1,889
Finance income (66) (66) (134)
------------- ------------- ---------
Adjusted operating profit before
working capital movement 8,197 6,821 22,581
Exceptional items (643) (163) (1,100)
Gain on disposal of tangible fixed
assets (91) (72) (187)
Gain on disposal of investment (158) - -
Share-based payments 504 282 554
Non-cash movement 95 - 100
Amortisation of intangible fixed
assets 123 - 161
Depreciation of tangible fixed
assets 1,061 826 1,724
-------------
Operating cash flows before movements
in working capital 9,088 7,694 23,833
Increase in inventory (8,346) (29,035) (16,505)
(Increase)/decrease in trade and
other receivables (4,023) (3,487) 4,253
(Decrease)/increase in trade and
other payables (6,170) 6,142 7,503
------------- ------------- ---------
Net cash (used in)/generated
from operations (9,451) (18,686) 19,084
Taxation paid (1,153) (2,305) (3,522)
------------- -------------
Net cash (outflow)/inflow from
operating activities (10,604) (20,991) 15,562
------------- ------------- ---------
Investing activities
Purchase of property, plant and
equipment (172) (170) (376)
Proceeds on disposal of property,
plant and equipment 109 124 247
Proceeds on disposal of investment 678 - -
Deferred consideration paid on
acquisition of subsidiary (4,450) - (2,362)
Acquisition of subsidiary, net
of cash acquired (11,212) - (41,525)
Purchase of intangible assets (30) - (84)
Interest received - 4 -
-------------
Net cash used in investing activities (15,077) (42) (44,100)
------------- ------------- ---------
Financing activities
Proceeds from issue of shares - 501 22,728
Costs relating to share raise - - (724)
Proceeds from bank loans 36,722 76,622 16,486
Payment of lease liabilities (973) (545) (1,437)
Dividends paid (5,568) - (6,334)
Interest paid (1,521) (484) (1,617)
-------------
Net cash inflow from financing
activities 28,660 76,094 29,102
------------- ------------- ---------
Net increase in cash and cash
equivalents 2,979 55,061 564
Cash and cash equivalents at beginning
of period 16,390 15,826 15,826
------------- ------------- ---------
Cash and cash equivalents at
end of period 19,369 70,887 16,390
============= ============= =========
The accompanying notes form an integral part of these financial
statements
NOTES TO THE FINANCIAL STATEMENTS
FOR THE HALF YEARED 30 NOVEMBER 2022
1. Organisation and trading activities
Springfield Properties PLC ("the Group") is incorporated and
domiciled in Scotland as a public limited company and operates from
its registered office in Alexander Fleming House, 8 Southfield
Drive, Elgin, IV30 6GR.
The consolidated interim financial statements for the Group for
the six-month period ended 30 November 2022 comprises the Company
and its subsidiaries. The basis of preparation of the consolidated
interim financial statements is set out in note 2 below.
The financial information for six-month period ended 30 November
2022 is unaudited. It does not constitute statutory financial
statements within the meaning of Section 434 of the Companies Act
2006. The consolidated interim financial statements should be read
in conjunction with the financial information for the year ended 31
May 2022, which has been prepared in accordance with International
Accounting Standards in conformity with the requirements of the UK
adopted international accounting standards. The statutory financial
statements for year ended 31 May 2022 have been delivered to the
Registrar of Companies. The auditors' report on those financial
statements was unqualified, did not draw attention to any matters
by way of emphasis, and did not contain a statement under 498(2) or
498(3) of the Companies Act 2006.
2. Basis of preparation
The interim financial statements have been prepared in
accordance with IAS 34 - Interim Financial Reporting and in
accordance with UK adopted international accounting standards.
The interim financial statements have been prepared on a going
concern basis and under the historical cost convention, except for
contingent consideration.
The preparation of financial information requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period. These are also disclosed in the 31 May 2022 year-end
financial statements and there have not been any changes. Although
these estimates are based on management's best knowledge of the
amounts, events or actions, actual events may ultimately differ
from those estimates.
The interim financial statements do not include all financial
risk information and disclosures required in the annual financial
statements and they should be read in conjunction with the
financial information that is presented in the Group's audited
financial statements for the year ended 31 May 2022. There has been
no significant change in any risk management polices since the date
of the last audited financial statements.
Going Concern
As noted in the Group's trading update issued on 12 December
2022, Springfield entered the 2023 financial year with a strong
order book and sustained demand in private housing, but against a
challenging market backdrop. Since then, the rise in interest rates
and broader economic uncertainty have impacted reservations for the
Group's private housing. The Group's revenues for this current
financial year are largely protected by the Scottish missive
system, which ensures that customers are contracted into the
purchase much earlier in the build programme. As a result, the
Group remains on track for good revenue growth for FY 2023.
However, cognisant of the continued market uncertainty, the Board
is taking a cautious approach to expectations of future sales
rates.
The industry-wide inflationary pressures in materials and labour
remain challenging as supply chain disruption has persisted.
Private house price growth is not anticipated in the short-term,
rendering the increase in build costs more difficult to mitigate.
The Group's affordable housing business continues to be impacted
due to the industry's model of fixed-price contracts and with the
Scottish Government yet to review its affordable housing investment
benchmark. The Group therefore continues to hold off from entering
into long-term fixed-price contracts in affordable housing. 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 intervention in rent
control.
The Group continues to have a strong relationship with the Bank
of Scotland - the revolving credit facility of GBP87.5m has an
expiry date in January 2025 and the Group also has a GBP2.5m
overdraft facility in place which is renewed annually. On 30
December 2022, the overdraft facility was increased by GBP10m to
GBP12.5m for the period until May 2023.
The Group prepared revised projections in December 2022 to cover
the years to May 2023 and May 2024 - these projections form the
basis of the assessment to confirm the appropriateness of the going
concern basis being adopted for the preparation of these
consolidated interim financial statements.
The Board continues to believe that the fundamentals of the
business and of the housing market in Scotland remain strong. There
is an undersupply of housing across all tenures, and the Group
offers high quality, energy efficient homes in popular locations
across the country - with greater affordability in Scotland
compared with the UK as whole. The Scottish Government maintains
its commitment to investing in the delivery of more affordable
homes and the Group's strategic land bank provides opportunities
for land sales in the short term.
The Group is focused on maintaining tight cost control during
this volatile period, whilst the historic investment in the land
bank, over half of which has planning permission already granted,
provides the Group with visibility and an excellent platform from
which to take advantage of the next upturn in the market cycle.
The Directors are confident that the Group has adequate
resources to continue in operational existence for the foreseeable
future. Accordingly, they continue to adopt the going concern basis
in preparing these half year financial statements.
3. Accounting Policies
The accounting policies used in preparing these interim
financial statements are the same as those set out and used in
preparing the Group's audited financial statements for the year
ended 31 May 2022.
Principal risks and uncertainties
As with any business, Springfield Properties PLC faces a number
of risks and uncertainties in the course of its day-to-day
operations.
The principal risks and uncertainties facing the Group are
outlined within the Group's latest annual financial statements for
the year ended 31 May 2022. The Group has reviewed these risks and
uncertainties, which remain relevant for both the 6 months to 30
November 2022 and the full financial year to 31 May 2023. The Group
continues to manage and mitigate these where relevant.
Exceptional items
Exceptional items are those material items which, by virtue of
their size or incidence, are presented separately in the
consolidated profit and loss account to enable a full understanding
of the Group's financial performance. Transactions that may give
rise to exceptional items include transactions relating to
acquisitions, costs relating to changes in share capital structure
and restructuring costs.
Redundancy costs relate to a review of the Group's business to
identify areas for greater efficiency and rationalisation.
4. Segmental Analysis
A segment is a distinguishable component of the Group's
activities from which it may earn revenues and incur expenses,
whose operating results are regularly reviewed by the Group's chief
operational decision makers to make decisions about the allocation
of resources and assessment of performance and about which discrete
financial information is available.
In identifying its operating segments, management generally
follows the Group's service line which represent the main products
and services provided by the Group. The Directors believe that the
Group operates in one segment:
-- Housing building activity
As the Group operates solely in the United Kingdom segment
reporting by geographical region is not required.
Unaudited Unaudited
Period to Period to Audited
30 November 30 November Year to 31
2022 2021 May 2022
Revenue GBP000 GBP000 GBP000
Private residential properties 118,626 47,257 174,442
Affordable housing 27,843 31,670 64,251
Contracting 10,634 7,510 16,494
Other 4,827 833 1,908
------------- ------------- ------------
Total Revenue 161,930 87,270 257,095
============= ============= ============
Gross profit 22,695 16,119 43,135
Administrative expenses (14,713) (9,386) (20,950)
Exceptional items (643) (163) (1,100)
Other operating income 215 88 396
Finance income 66 66 134
Finance expense (1,700) (512) (1,889)
Profit before tax 5,920 6,212 19,726
Taxation (896) (1,170) (3,652)
------------- ------------- ------------
Profit for the period 5,024 5,042 16,074
============= ============= ============
5. Exceptional items
Unaudited Unaudited
Period to Period to Audited
30 November 30 November Year to 31
2022 2021 May 2022
GBP000 GBP000 GBP000
Redundancy costs 276 141 141
Acquisition and other transaction
related costs (1) 367 - 859
Other acquisition and other
transaction related costs
(2) - - 100
Wage cost for furloughed
employees - 22 -
--------------- ------------- ------------
Exceptional items 643 163 1,100
=============== ============= ============
(1) Acquisition and other tractions costs relating to acquiring
the business of Mactaggart and Mickel Group Limited (y/e 31 May
2022 Tulloch Homes Group and its subsidiary companies)
(2) Y/e 31 May 2022 - other acquisition costs and other related
costs relating to planning being achieved at Carlaverock which had
previously been assessed as 95% likely
6. Taxation
The results for the six months to 30 November 2022 include a tax
charge of 15.1% of profit before tax (30 November 2021: 18.8%; 31
May 2022: 18.5%), representing the best estimate of the average
annual effective tax rate expected for the full year, applied to
the pre-tax income of the six-month period.
7. Earnings per share
The calculation of the basic (and diluted) earnings per share is
based on the following data:
Unaudited Unaudited Audited
Period to Period to Year to
30 November 30 November 31 May 2022
2022 2021
Earnings GBP000 GBP000 GBP000
Profit for the period 5,024 5,042 16,074
Adjusted for the impact
of tax adjusted exceptional
costs in the year 521 163 970
------------- ------------- -------------
Normalised earnings 5,545 5,205 17,044
============= ============= =============
Unaudited Unaudited Audited
Period to Period to Year to
30 November 30 November 31 May
Number of Shares 2022 2021 2022
Weighted average number of
ordinary shares for the purpose
of basic earnings per share 118,469,399 102,306,694 109,022,146
Effect of dilutive potential
ordinary shares: share options 3,377,930 1,929,619 2,797,323
------------ ------------- ------------
Weighted average number of
ordinary shares for the purpose
of diluted earnings per share 121,847,329 104,236,313 111,819,469
============ ============= ============
Unaudited Unaudited Audited
Period to Period to Year to
30 November 30 November 31 May
2022 2021 2022
Pence Pence Pence
Earnings per ordinary share
(pence per share)
Basic earnings per share 4.24 4.93 14.74
Diluted earnings per share 4.12 4.84 14.37
Adjusted earnings per ordinary
share (pence per share)
Basic earnings per share 4.68 5.09 15.63
Diluted earnings per share 4.55 4.99 15.24
8. Dividends
Unaudited Unaudited Audited
Period to Period to Year to
30 November 30 November 31 May 2022
2022 2021
GBP000 GBP000 GBP000
Final dividend - y/e 31
May 2021 - 4,558 4,558
Interim dividend - y/e
31 May 2022 - - 1,776
Final dividend - y/e 31 5,568 - -
May 2022
------------- ------------- -------------
5,568 4,558 6,334
============= ============= =============
The final dividend declared for the year ended 31 May 2022 was
4.7p per share amounting to GBP5,568,061. This dividend was
declared before 30 November 2022 and is included within liabilities
at 30 November 2022. The dividend was paid in December 2022.
9. Share Capital
The company has one class of ordinary share which carries full
voting rights but no right to fixed income or repayment of capital.
Distributions are at the discretion of the Company.
The share capital account records the nominal value of shares
issued. The share premium account records the amount above the
nominal value received for shares sold, less transaction costs.
Ordinary shares of 0.125p Share premium
- allotted, called up and Number of Share capital GBP000
fully paid shares GBP000
At 1 December 2021 102,565,316 128 57,262
Share issue 15,904,083 20 21,482
At 31 May 2022 and 30 November
2022 118,469,399 148 78,744
============ ============== ==============
10. Deferred Consideration
As part of the purchase agreement of Tulloch Homes Holdings
Limited, there was a further GBP13,000,000 of deferred
consideration payable. This can be broken down into (i) GBP362,300
paid on 24 April 2022 (ii) GBP6,137,700 paid on 1 December 2022 and
(iii) GBP6,500,000 payable on 1 July 2023. The outstanding
discounted amount payable at the period end is GBP12,611,876 (p/e
November 2021: GBPnil; y/e 31 May 2022: GBP12,574,228).
As part of acquiring the Scottish housebuilding business of
Mactaggart & Mickel Group Limited, there is a further
GBP30,781,108 of deferred consideration payable. This is to be paid
proportionally as homes are sold over 5 years, commencing in
September 2023. The outstanding discounted amount payable at the
period end is GBP29,365,111 (p/e November 2021: GBPnil; y/e 31 May
2022: GBPnil).
Unaudited Unaudited Audited
Period to Period to Year to
30 November 30 November 31 May 2022
2022 2021
GBP000 GBP000 GBP000
Deferred consideration
< 1 year 14,023 - 6,119
Deferred consideration
> 1 year 27,954 - 6,455
41,977 - 12,574
============= ============= =============
11. Contingent consideration and contingent liabilities
As part of the purchase agreement of Walker Group Springfield
Holdings Limited, there was a further GBP6,000,000 payable which
was included within Provisions. GBP4,000,000 was payable when
outline planning was granted at Carlaverock and GBP2,000,000
payable when detailed planning is granted at Carlaverock the
probability of which was assessed at 98% and 95% respectively. This
has been discounted at a market rate of interest. GBP4,000,000 was
paid in December 2019 and GBP2,000,000 was paid in January 2022.
The outstanding discounted amount payable at the period end is
GBPnil (30 November 2021: GBP1,900,000; 31 May 2022: GBPnil).
As part of the purchase agreement of Dawn Homes Holdings Limited
there is a further GBP2,500,000 payable for an area of land if (i)
the Group makes a planning application when it reasonably believes
the council will recommend approval; or (ii) it is zoned by the
council . The directors have assessed the likelihood of the land
being zoned and have included provision of GBP2,000,000 based on
80% probability. The outstanding amount payable at the period end
included within Provisions is GBP2,000,000 (30 November 2021:
GBP2,000,000; 31 May 2022: GBP2,000,000).
The remaining GBP500,000 has been treated as a contingent
liability due to the uncertainty over the future payment.
Contingent consideration Unaudited Unaudited Audited
Period to Period to Year
30 November 30 November to 31
2022 2021 May 2022
GBP000 GBP000 GBP000
Walker Group Springfield - 1,900 -
Holdings Limited
Dawn Homes Holdings Limited 2,000 2,000 2,000
------------- ------------- ----------
2,000 3,900 2,000
============= ============= ==========
Contingent liabilities Unaudited Unaudited Audited
Period to Period to Year
30 November 30 November to 31
2022 2021 May 2022
GBP000 GBP000 GBP000
Walker Group Springfield - 100 -
Holdings Limited
Dawn Homes Holdings Limited 500 500 500
------------- ------------- ----------
500 600 500
============= ============= ==========
12. Provision
Dilapidation provisions are included for all rented buildings
within the Group. Maintenance provisions relate to costs to come on
developments where the final homes have been handed over. In the
prior period, an onerous lease provision has been created due to
the closure of the Walker office in Livingston.
Unaudited Unaudited Audited
Period to Period to Year
30 November 30 November to 31
2022 2021 May 2022
GBP000 GBP000 GBP000
Dilapidation provision 177 190 150
Onerous lease provision - 100 -
Maintenance provision 2,463 671 2,496
------------- ------------- ----------
2,640 961 2,646
============= ============= ==========
Unaudited Unaudited Audited
Period to Period to Year
30 November 30 November to 31
2022 2021 May 2022
GBP000 GBP000 GBP000
Provisions < 1 year 821 - 821
Provisions > 1 year 1,819 961 1,825
------------- ------------- ----------
2,640 961 2,646
============= ============= ==========
13. Transactions with related parties
Other related parties include transactions with a retirement
scheme in which some of the directors are beneficiaries, and close
family members of key management personnel. During the period
dividends totalling GBP1,854k (p/e November 2021: GBP1,993k; y/e
May 2022: GBP2,343k) were paid to key management personnel.
During the period the Group entered into the following
transactions with related parties:
Unaudited Unaudited Audited
Period to Period to Year to
30 November 30 November 31 May
Sale of goods 2022 2021 2022
GBP000 GBP000 GBP000
Bertha Park Limited (1) 8,090 7,726 18,691
Other entities which key management
personnel have control, significant
influence or hold a material
interest in 45 39 83
Key management personnel 189 10 176
Other related parties 17 2 29
------------- ------------- ---------
8,341 7,777 18,979
============= ============= =========
Sales to related parties represent those undertaken in the
ordinary course of business.
Unaudited Unaudited Audited
Period to Period to Year to
30 November 30 November 31 May
Purchase of goods 2022 2021 2022
GBP000 GBP000 GBP000
Bertha Park Limited (1) - 350 371
Entities which key management
personnel have control, significant
influence or hold a material
interest in 17 196 45
Key management personnel - - 11
Other related parties 118 42 332
------------- ------------- ---------
135 588 759
============= ============= =========
Unaudited Unaudited
Period to Period Audited
30 November to 30 November Year to
2022 2021 31 May
2022
Rent paid to GBP000 GBP000 GBP000
Entities which key management
personnel have control, significant
influence or hold a material
interest in 81 80 170
Key management personnel 3 5 -
Other related parties 50 14 107
------------- ---------------- ----------
134 99 277
============= ================ ==========
13. Transactions with related parties (continued)
Unaudited Unaudited
Period to Period Audited
30 November to 30 November Year to
2022 2021 31 May
2022
Interest received from GBP000 GBP000 GBP000
Bertha Park Limited (1) 63 63 125
63 63 125
============= ================ ==========
The following amounts were outstanding at the reporting end
date:
Unaudited Unaudited
Period to Period Audited
30 November to 30 November Year to
2022 2021 31 May
2022
Amounts receivable GBP000 GBP000 GBP000
Bertha Park Limited (1) 10,022 6,566 9,167
Entities which key management
personnel have control, significant
influence or hold a material
interest in 4 56 54
Key management personnel 40 3 39
Other related parties 4 - 1
------------- ---------------- ----------
10,070 6,625 9,261
============= ================ ==========
Unaudited Unaudited
Period to Period to Audited
30 November 30 November Year to
2022 2021 31 May
2022
Amounts payable GBP000 GBP000 GBP000
Entities which key management
personnel have control, significant
influence or hold a material
interest in 32 44 -
Other related parties 43 - 52
------------- ------------- ----------
75 44 52
============= ============= ==========
Amounts owed to/from related parties are included within
creditors and debtors respectively at the year-end. No security has
been provided on any balances.
Transactions between the company and its subsidiaries, which is
a related party, have been eliminated on consolidation and are not
disclosed in this note.
(1) Bertha Park Limited, a company in which Sandy Adam and Innes
Smith are shareholders and directors.
14. Analysis of net debt Unaudited Unaudited Audited
Period to Period to Year to
30 November 30 November 31 May
2022 2021 2022
GBP000 GBP000 GBP000
Cash in hand and bank 19,369 70,887 16,390
Bank borrowings (87,208) (110,622) (50,486)
------------- ------------- ---------
Net bank debt (67,839) (39,735) (34,096)
Lease liability (5,825) (3,224) (3,954)
------------- ------------- ---------
Net debt (73,664) (42,959) (38,050)
============= ============= =========
Reconciliation of net cashflow to movement in net debt is as
follows:
At 30 November
At 1 June New Leases Cashflow Fair 2022
2022 Value
GBP000 GBP000 GBP000 GBP000 GBP000
Cash in hand and
bank 16,390 - 2,979 - 19,369
Bank borrowings (50,486) - (36,722) - (87,208)
Lease (3,954) (2,703) 973 (141) (5,825)
------------ ------------- ----------- -------- ---------------
Net Debt (38,050) (2,703) (32,770) (141) (73,664)
============ ============= =========== ======== ===============
15. Acquisition in the period
On 21 June 2022, the Group acquired the Scottish housebuilding
business of Mactaggart & Mickel for a total consideration of
GBP46.3m. Mactaggart & Mickel is a premium brand housebuilder
that has been delivering high-quality housing across the Central
belt of Scotland for almost 100 years.
Under the terms of the acquisition, the Group acquired six live
private and affordable sites with work in progress for a
consideration of GBP15.0m and acquired a brand licence to build
homes as Mactaggart & Mickel on a further 11 private and
affordable sites for the deferred consideration of GBP30.8m.
The housebuilder's fixed assets and WIP were purchased by
Springfield M&M Homes Limited. Employees have been transferred
under a TUPE agreement.
The acquisition also included Timber Systems, a timber frame
factory near Glasgow, for a consideration of GBP0.5m. The addition
of a second timber frame factory, which complements the Group's
existing facility in Elgin, will secure kit supply and increase
capacity for future growth while further reducing the Group's
carbon footprint.
The timber kit fixed assets and stock were purchased by
Springfield Timber Kit Systems Limited. Employees have been
transferred under a TUPE agreement and Springfield Timber Kit
Systems have taken over the lease of the building.
Under IFRS 3, Business Combinations, the final fair value
assessment of assets and liabilities acquired will be fully
completed within 12 months of the acquisition date and will be
reported within the 31 May 2023 financial statements.
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Springfield Properties (LSE:SPR)
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From Jul 2023 to Jul 2024
