Announcing its FY24 results to 31 May, the group confirmed it is on track to report results for FY25 in line with market expectations.

Springfield said it now enters the new financial year with a stronger balance sheet, improving private market backdrop and a larger contracted order book in affordable housing.

Adjusted profit before tax stands at £10.6 million (2023: £16.0m), which is ahead of management’s original expectations due to strong profits on land sales. Springfield Properties also delivered the key objective of significantly reducing net bank debt, exceeding target of £55.0m with net bank debt of £39.9m (31 May 2023: £61.8m).

The firm delivered profitable land sales of £28.1m, and completed 878 new homes – a drop from the 1,301 completed in 2023. However, the firm stressed that this was in line with market expectations, reflecting challenging market conditions in the housing industry.

Springfield Properties reported private housing revenue of £184.7m (2023: £253.4m) as demand in the year was impacted by high interest rates, mortgage affordability, the cost-of-living crisis and reduced homebuyer confidence. It also reported affordable housing revenue of £47.0m (2023: £53.9m) reflecting the group’s decision in the prior year to pause entering into new affordable-only fixed-price contracts.

During the year, Springfield Properties recommenced actively engaging with affordable housing providers following the introduction of the new Scottish Government benchmark – with contracts worth over £50m signed in the year for delivery during FY 2024 and beyond

Since the year end, the group is experiencing initial signs of recovery, with reservation rates ahead of the same period last year. The firm’s total owned land bank stood at 5,593 plots, 88% with planning permission, secured at an attractive cost per plot, and a strategic land bank of a further 3,147 acres, equating to 31,471 plots. This is one of the largest land banks in Scotland, including significant holdings in the North of the country where the Group will benefit from the expected sharp increase in demand for housing to support the delivery of the Inverness and Cromarty Firth Green Freeport and substantial upgrades to the power network.

Springfield Properties also announced the resumption of its dividend for shareholders, declaring a total dividend for the year of 1p per share (2023: nil).

Innes Smith, chief executive officer of Springfield Properties, said: “Against a challenging market backdrop, we successfully delivered our objectives for the year. A key priority was reducing our debt, and we’re very pleased that we have exceeded our target.

“This was achieved through taking decisive action to reduce costs, manage working capital and secure profitable land sales of sites that do not impact on our near-term development pipeline. We are now in a strong position to deliver future growth as more favourable economic and trading conditions return.

“We are also encouraged by early indications for an improving backdrop. Many of the key elements that underpin homebuyer confidence are strengthening, including decreasing inflation and the first Bank of England interest rate reduction in over four years.

“While it remains early days, we are pleased we have started to see an improvement in private housing demand since year end – with reservation rates being ahead of the same time last year. Similarly, having actively recommenced signing affordable contracts, contracted order book in affordable housing at year end was also ahead of where it was at the same point in the previous year.”

Mr Smith continued: “We continue to have one of the largest owned land banks in Scotland, with a high proportion of sites having planning already in place.

“We are particularly excited about the forthcoming investment in Scotland with the creation of the Inverness and Cromarty Firth Green Freeport and the development of Scottish & Southern Energy Networks’ new powerlines to provide the UK with renewable energy, which will require the building of thousands of new homes.

“We have worked across the North of Scotland for decades and are passionate about growth and development for the region. With significant land holdings in Moray and the Highlands, we are uniquely placed to help deliver this opportunity as the housing market recovers.

“As a result, we look to the future with increasing confidence and, accordingly, we are pleased to be able to return to making dividend payments earlier than initially anticipated. We thank our shareholders for their continued support and look forward to updating them on our progress.”