Springfield Properties PLC on Tuesday reported a surge in interim revenue but suffered a slight profit fall as expenses rose, coupled with build cost inflation.
Shares were down 3.4% at 85.00 pence each on Tuesday morning in London.
The housebuilder in Scotland reported an 85% jump in revenue to £161.9 million for the six months that ended on November 30, from £87.3 million the year before. In private housing particularly, revenue surged to £118.6 million from £47.3 million.
Pretax profit, however, was down 4.8% to £5.9 million from £6.2 million the year before, despite adjusted pretax profit rising 3.1% to £6.6 million from £6.4 million. Gross margin stood at 14.0%, down from 18.5% the year before.
Springfield noted significant impact from build cost inflation, especially on fixed-price contracts in affordable housing.
Total administrative expenses jumped to £14.7 million from £9.4 million the year before.
During the period, 429 private homes were completed, compared to 197 homes in the same period a year earlier. The company said this was driven by its private housing that grew on an underlying basis and the contributions from Tulloch Homes and Mactaggart & Mickel Homes.
Chief Executive Officer Innes Smith said: ‘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. 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.’
The company did not declare an interim dividend.
Looking ahead, Springfield said it is on track to deliver good revenue growth for financial 2023, driven by strong secured sales in private housing. It remains confident of managing inflationary pressure, and meeting market expectations for profit in the full year to May 31.
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