Despite having delivered the firm’s “highest level of annual completions and revenue”, with total revenue growing 29% to £332.1 million, the company has experienced a plummet in new reservations in private housing.

Springfield’s financial results also revealed a 22% decrease in pre-tax profits, landing at £15.3m for the year ended 31 May 2023, with the company revising its profit expectations for 2024 to between £10m and £14m.

The company’s net debt escalated from £38.1m to £67.7m within a year. This motivated Springfield to take aggressive cost-cutting measures and implement strategies aimed at reducing this debt to approximately £55m by May 2024.

The revenue for Springfield’s private housing division experienced a surge, with a 45% increase to £253.4m. This was aided by acquisitions of Tulloch Homes and Mactaggart & Mickel Homes. However, the affordable housing sector suffered a 16% decline in revenue, totalling £53.9m.

Innes Smith, Springfield Properties CEO, said: “While we were significantly impacted by the build cost inflation, particularly in affordable housing, we took decisive action to address this, resulting in annualised cost savings of £4.0m.”

He highlighted the tough trading conditions due to “reduced homebuyer confidence”, noting that the business does not expect “any material improvement in homebuyer confidence before next Spring” and is now prioritising cash generation to reduce debt and the business’ value.

Mr Smith added: “Accordingly, we are pausing all speculative private housing development. We will build based on sales and not sell based on build. We are actively pursuing land sales and will further reduce our cost base where necessary.

“We are also encouraged by the negotiations we are now having in affordable housing, which has strong cash flow dynamics.”

Despite this, he remains optimistic about the company’s robust position within the Scottish market, citing the region’s resilience and the favourable affordability for homebuyers in Scotland compared to other UK regions.

He said: “We have one of the largest land banks in Scotland with over 6,700 owned plots, 83% of which has planning permission, and a further 3,255 acres, equating to c. 33,000 plots, of strategic land.

“This is particularly valuable given the current planning difficulties being faced in Scotland. We have an excellent reputation of offering high quality, energy efficient homes in desirable locations in key housing markets.

“In addition, there is an undersupply of housing of all tenures, which is being exacerbated by the current conditions, and which can only be addressed through building new homes. The stability in house prices and the affordability in Scotland underpin the opportunities for medium-term growth.”