Results in-line; Prioritising cash generation in FY24

Springfield’s results to May ’23 are in line with expectations, confirming a record year of completions despite a challenging market backdrop. Decisive action has been taken to reduce costs (£4m annualised savings) and the main focus for FY24 is cash generation, which should result in a meaningful reduction in net debt by the year end. Whilst the broader market outlook remains uncertain in the near term, we are encouraged by recent developments in Affordable housing (increase in Scottish Government Affordable Housing Investment Benchmarks) and remain confident in the Group’s long term growth prospects, which are underpinned by the large land bank and a very strong market position (top three builder 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 (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.