Springfield Properties, one of Scotland’s leading housebuilders, has reported a 13 per cent drop in revenue to £105.6m for the first half of its 2025 financial year, reflecting a subdued housing market and delays in affordable housing projects.
Despite the decline in revenue, the company posted a sharp increase in profitability, with adjusted profit before tax climbing 90 per cent to £3.8m, aided by cost control measures and profitable land sales.
Despite the revenue decline, Springfield expects full-year profits to be “significantly ahead of market expectations.”
Mixed outlook
Springfield said the outlook for the Scottish housing market remains uncertain – a statement supported by the company’s results.
It recorded a 18 per cent decline in private housing revenue and a 20 per cent decline in affordable housing revenue. However, contract housing revenue jumped 216 per cent and land sales revenue declined nine per cent.
It noted that demand exists, particularly in regions such as the Highlands and Moray, affordability remains a key challenge.
Springfield said it has positioned itself to capitalise on the need for new housing in these areas, which are set to benefit from the Inverness and Cromarty Firth Green Freeport and major upgrades to Scotland’s power network.
Affordable housing delays
Springfield’s affordable housing segment suffered a 20 per cent revenue decline, and certain projects were delayed due to uncertainty over Scottish Government funding.
While the company said the December budget provided some clarity for the group, allowing activity to resume and leading to the signing of two new contracts, it said it ability to secure further contracts will depend on continued government support and funding stability.
The housebuilder maintains a substantial land bank, with 5,797 owned plots—90 per cent of which have planning permission—and 6,305 plots under contract. This strategic positioning could prove valuable as the affordable housing sector stabilises.
Financial strategy
Springfield said net bank debt was reduced to £62.9m from £93.4m in the period, primarily through a £64.2m land sale to BDW Trading Limited, a subsidiary of Barratt Redrow plc.
The company expects to receive the proceeds over four years, accelerating its plan to achieve a net cash position by the end of fiscal 2027.
Innes Smith, chief executive officer of Springfield Properties, said: “Trading for the first half of the year was in line with our expectations. The strategic action taken in the previous year to reduce our debt, along with sustained cost control in the period and further profitable land sales, delivered a substantial reduction in our net bank debt compared with the prior year. We also significantly improved our gross margin and achieved a strong increase in profit.
“While we are disappointed that some of our affordable housing projects were delayed due to uncertainty over availability of public funding, we are encouraged by the increase in activity in this area following the Scottish Budget in December.
“We are pleased to have signed this profitable land sale agreement with Barratt, which demonstrates the value of our large, high quality land bank. The proceeds will accelerate the removal of our debt and support our strategic focus of capitalising on the unprecedented growth opportunity in the North of Scotland.”