17 February 2025
Springfield Properties
plc
("Springfield", the
"Company" or the "Group")
Springfield Signs Land Sale Agreement
with Barratt
Proceeds of £64.2m to accelerate
removal of bank debt and capitalise on the substantial
opportunities in the North of Scotland
Springfield Properties plc (AIM:
SPR), a leading housebuilder in Scotland focused on delivering
private and affordable housing, announces that it has signed an
agreement with BDW Trading Limited ("Barratt"), the principal
operating subsidiary of Barratt Redrow plc, for the profitable sale
of 2,480 plots of undeveloped land with planning consent across six
sites for £64.2m (the "Land Sale").
Proceeds from the Land Sale will be
received over four years and will be used to accelerate the removal
of the Group's outstanding bank debt and to capitalise on the
significant growth opportunities emerging in the North of
Scotland.
In addition, the Group and Barratt
have entered into non-binding discussions regarding the possible
sale of additional future land holdings on a number of other sites
(the "Prospective Land").
The
Land Sale
The Group will sell to Barratt 2,480
plots of undeveloped land across six sites (the "Land")[1].
As a result of the Land Sale, the
Group expects to report profit for FY 2025 significantly ahead of
market expectations. Further details on the Group's outlook for FY
2025 are provided in its H1 2025 results announcement.
The Land and the Prospective Land is
from the Group's future land pipeline and is primarily located
across Central Scotland. Following the Land Sale, the Group will
continue to have a large high quality land bank, providing over
nine years of activity (based on owned and contracted land), and
will continue to operate in Central Scotland, including delivering
homes at the Bertha Park and Dykes of Gray villages.
The Land Sale will complete by 31
May 2025, with the Group receiving the consideration of £64.2m in
cash in four tranches over the next four years. As a result, the
Group expects to reach a net cash position in FY 2027.
The Land Sale only entails the
transfer of undeveloped land. No employees or other assets are
being transferred as a result of the Land Sale.
Opportunities in the North of Scotland
Following the Land Sale, the Group's
strategic growth focus will be on opportunities in the North of
Scotland where the Group is uniquely placed to capitalise on the
substantial need for new housing to cater for the high population
and economic growth expectations in the region. This is being
driven by the UK Government-financed green infrastructure
development in the North of Scotland. Scottish and Southern
Electricity Networks ("SSEN") are investing £31bn into upgrading
the electricity network in the region and the project will require
around 5,000 worders at its peak in 2027. In addition, the
Inverness and Cromarty Firth Green Freeport is expected to create
more than 10,000 jobs locally with new investment of
over £3bn. The Group has commenced discussions with key
stakeholders about how to meet the demand for the new housing
required to cater for the significant population growth.
The Directors believe that
Springfield is uniquely placed to capitalise on these opportunities
thanks to its large land bank across the Highlands and Moray, with
a majority of plots already having planning in place, and its
established position as a leading housebuilder in the
region.
Innes Smith, Chief Executive Officer of Springfield
Properties, said: "This profitable
land sale will enable us to realise the value of our assets,
accelerate our plans to remove bank debt and focus on the
significant opportunity in the North of Scotland where we are
uniquely positioned to excel. New housing is required to cater for
the thousands of workers needed to deliver the substantial green
infrastructure development coming to the region and the ongoing
population growth as result of the economic stimulus these projects
will bring. With significant land holdings across the Highlands and
Moray and an established presence, we are excellently positioned to
capitalise on this opportunity. In addition, we continue to have a
large high quality land bank, with this deal demonstrating the
long-term value of that asset. Accordingly, and with a
significantly strengthened balance sheet, we continue to look to
the future with confidence."
Enquiries
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Springfield
Properties
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Sandy Adam, Chairman
Innes Smith, Chief Executive Officer
Iain Logan, Chief Financial Officer
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+44 1343 552550
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Singer Capital
Markets
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Shaun Dobson, James Moat, Oliver Platts
(Investment Banking)
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+44 20 7496 3000
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Gracechurch
Group
|
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Harry Chathli, Claire Norbury, Henry
Gamble
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+44 20 4582 3500
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Analyst Research
Equity Development and Progressive
Equity produce freely available research on Springfield Properties
plc, including financial forecasts. This is available to view and
download here:
https://www.thespringfieldgroup.co.uk/news/updates-and-analyst-reports
