Land sale – delivering on cash generation strategy

Springfield has announced the sale of c.9.5 acres of land for £5.2m in cash (£0.5m to be received in the coming days, £4.7m on completion). This is a profitable land sale, which is in keeping with the Group’s focus on debt reduction in an uncertain housing market. This again illustrates the value within the Group’s large landbank and discussions are ongoing with other housebuilders and affordable housing providers about a number of sites.

Springfield has one of the largest landbanks in Scotland. As of 31^st May, the Group had 6,712 owned plots and strategic options over a further 3,255 acres (equivalent of a further 33,000 plots). The gross development of the owned landbank is c.£1.9bn, providing firm underpinning for long term shareholder value. We recently initiated coverage (Click: An undervalued, high quality growth story) and continue to see scope for a material re-rating of the shares.

Our Fair Value / share is 110p, based on an undemanding rating of 0.9x Price/ Book.