Springfield Properties, the Scottish house builder, announced that it expects to report a rise in revenue for fiscal year 2023, while pretax profit is anticipated to decline in line with market expectations due to inflationary pressures.
Strong Revenue Performance Amidst Housing Market Turmoil
Despite the challenges faced by the housing market, Springfield Properties expects its revenue for the year ended May 31 to reach approximately £330 million ($430.2 million), representing a remarkable 28% growth compared to the previous year. This is the highest turnover the company has achieved thus far, driven by a combination of acquisitions and organic growth in the private housing sector.
Positive Growth in Home Completions
The company also reported a notable increase in home completions, with more than 1,300 houses completed in fiscal year 2023, up from 1,242 in the previous year.
Impact of Build Cost Inflation on Pretax Profit
While Springfield Properties did not provide specific figures for pretax profit expectations, it reiterated its previous guidance issued in December. The company anticipates a decline in pretax profit from the previous year’s figure of £19.7 million. This decline is primarily attributed to significant build cost inflation, particularly impacting fixed-price contracts in the affordable housing segment.
Strategic Measures to Navigate Market Uncertainty
In response to the uncertain market conditions, Springfield Properties made strategic decisions throughout the year. The company temporarily halted entering into new large long-term affordable housing contracts and adopted a cautious approach to launching new sites in the private housing sector. These measures were aimed at mitigating potential risks associated with the market volatility.
Implementation of Cost-Saving Initiatives
As a result of their strategic actions and other cost-saving initiatives, Springfield Properties successfully delivered savings of approximately £3.0 million on an annualized basis.