TIDMSPR
RNS Number : 0997N
Springfield Properties PLC
20 September 2023
20 September 2023
Springfield Properties plc
("Springfield", the "Company", the "Group" or the "Springfield
Group")
Final Results and Publication of Annual Report
Springfield Properties (AIM: SPR), a leading housebuilder in
Scotland focused on delivering private and affordable housing ,
announces its final results for the year ended 31 May 2023.
Financial Summary
2023 2022 Change
GBPm GBPm
Revenue 332.1 257.1 +29%
Private housing revenue 253.4 174.4 +45 %
Affordable housing
revenue 53.9 64.3 -16 %
Contract housing
revenue 19.7 16.5 +19 %
Other revenue* 5.1 1.9 +168 %
Gross margin 14.5% 16.8% * 230bps
Operating profit 20.0 21.5 -7%
Adj. operating profit** 20.7 22.6 -8%
Profit before tax 15.3 19.7 -22%
Adj. profit before
tax** 16.0 20.8 -23%
Basic EPS (p) 10.19 14.74 -31%
Adj. basic EPS** (p) 10.74 15.63 -31%
Net debt*** 67.7 38.1 -78%
* Includes land sales of GBP3.7m (2022: GBP0.2m)
** Adjusted to exclude exceptional costs of GBP0.7m (2022:
GBP1.1m) (See the Financial Review for further detail)
*** Bank borrowings plus long-term obligations under lease
liabilities plus short-term obligations under lease liabilities
less cash and cash equivalents
Operational Summary
-- Record year of completions, which increased to 1,301 (2022: 1,242)
-- Strong growth in private housing, reflecting acquisitions of
Tulloch Homes and Mactaggart & Mickel Homes and organic growth
despite challenging market backdrop
-- Significant impact from build cost inflation, particularly on
fixed-price contracts in affordable housing, affecting margins
across the Group
-- Strategic decision taken to pause entering new long-term
affordable-only housing contracts due to inflationary environment;
post year end, the Group has recommenced engaging with providers
following the Scottish Government increasing the affordable housing
investment benchmarks
-- Completed delivery of first contract for private rented
sector ("PRS") housing, however plans for further PRS housing were
withdrawn following the Scottish Government's introduction of rent
controls
-- Decisive action taken across the business to address the
market conditions, resulting in annualised cost savings of GBP4.0m,
which will benefit the Group in the new financial year
-- Acquired the Scottish housebuilding business of Mactaggart
& Mickel Group Ltd ("Mactaggart & Mickel Homes"), a premium
brand housebuilder, on favourable payment terms
-- Total owned land bank of 6,712 plots, 83% with planning
permission, and strategic options over a further 3,255 acres,
equating to c. 33,000 plots
o One of the largest land banks in Scotland, in areas of high
demand and with a low cost per plot, underpins the Board's
long-term confidence
o Large owned land bank provides asset for cash generation
-- Progress made against the first-year objectives set within
the Group's ESG strategy that was published during the year
Current Trading & Outlook
-- Significantly lower levels of reservations in private housing
due to demand being impacted by continued high interest rates,
mortgage affordability and reduced homebuyer confidence, which the
Board does not expect to materially improve before Spring 2024
-- Secured additional GBP18.0m term loan and 12-month extension
to overdraft facility to ensure sufficient headroom in the
short-term
-- The Board has accordingly adopted a strategy focusing on
maximising cash generation in order to reduce the Group's debt
o The Group will carefully manage working capital and curtail
speculative private housing development by only commencing building
homes when they are reserved
o The Group will actively pursue land sales in order to
accelerate cash realisation from its large land bank
o The Board will not make dividend payments until the bank debt
is materially reduced
-- The Group has recommenced engaging with affordable housing
providers, with contracts signed on 31 May 2023 for GBP9.7m,
another post year end for GBP8.1m and 13 currently under
negotiation
o Affordable-only housing contracts have strong cash flow
dynamics and high revenue visibility
-- Cost price inflation of materials has fallen to below 5% and
the Group is experiencing some price reductions
-- Consequently, for FY 2024, the Group expects to report
adjusted profit before tax of c. GBP10m-GBP14m and is planning to
reduce net debt to c. GBP55m by 31 May 2024
-- Long-term fundamentals of the Scottish housing market remain
strong with an undersupply of housing across all tenures and
greater private housing affordability than the UK as a whole
-- With a large number of sites with planning already in place,
the Group will be able to quickly accelerate site development when
market confidence returns and is well-placed to satisfy pent-up
demand for high-quality, energy efficient housing in attractive
locations across the country
Innes Smith, Chief Executive Officer of Springfield Properties,
commented: "Against a challenging market backdrop, we delivered our
highest level of annual completions and revenue. We brought another
premium brand into the Group through the acquisition of Mactaggart
& Mickel Homes, and on favourable payment terms. 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 GBP4.0m.
"Trading conditions have remained tough into the new financial
year as private housing reservations continue to be impacted by
reduced homebuyer confidence. We do not expect to see any material
improvement in homebuyer confidence before next Spring. Our
priority is to maximise cash generation to reduce our debt to
ensure that we maintain the value of our business. 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.
"The fundamentals of our business and our position within the
Scottish housing market remain strong. 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."
Enquiries
Springfield Properties
Sandy Adam, Chairman
Innes Smith, Chief Executive Officer +44 1343 552550
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Singer Capital Markets
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Shaun Dobson, James Moat, Oliver Platts +44 20 7496 3000
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Gracechurch Group
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Harry Chathli, Claire Norbury +44 20 4582 3500
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Results Investor Webinar
Sandy Adam, Chairman, Innes Smith, Chief Executive Officer, and
Iain Logan, Chief Financial Officer, will be presenting to retail
shareholders via a webinar hosted by Equity Development at 8.30am
on Thursday 21 September 2023. Investors can register their
attendance for the webinar: here.
Operational Review
During 2023, the Group delivered its highest number of annual
completions, at 1,301 (2022: 1,242) - securing its position as one
of the top three housebuilders in Scotland. This was driven by the
Group's private housing, primarily due to the contributions from
Tulloch Homes and Mactaggart & Mickel Homes, which were
acquired in H2 2022 and at the start of the year respectively.
Importantly, despite reduced homebuyer confidence resulting from
rising mortgage rates and cost-of-living challenges, which peaked
around the time of the UK Government's mini-budget, slowing private
sales activity, the Group also delivered underlying organic growth
in private housing.
Significant build cost inflation particularly impacted
affordable housing and the Group's gross margin due to the
fixed-cost nature of contracts in affordable housing as well as the
Scottish Government not revising the affordable housing investment
benchmarks to take account of inflation. In addition, there was an
increase in overheads due to the acquisitions. Accordingly, the
Group took the strategic decision to pause entering new long-term
affordable-only contracts. However, post year end, with the
affordable housing investment benchmarks having been increased and
a reduction in cost price inflation, the Group is now reengaging
with affordable housing providers.
Following the Scottish Government's introduction of rent
controls, the Group's plans for expanding its PRS housing activity
were withdrawn during the year and remain on hold.
The Group took a number of actions, as described below, to
address these conditions to carefully manage its activities to
limit exposure while seeking land sales where terms are favourable
to support the balance sheet.
Decisive Response to Market Conditions
To address the uncertain and difficult market conditions,
Springfield took decisive action during the year alongside
maintaining tight cost control. The Group halted entering new large
long-term affordable housing contracts, as described further below,
and adopted a cautious approach to new site launches in private
housing, including undertaking 'soft launches' to test the market
before making further investment into site infrastructure. Land
buying activity was reduced and a land sale of GBP3.7m was
completed. Recruitment was paused and staffing levels were reduced
in areas most impacted by the market downturn as well as where
synergies were identified across the Group. As a result of these
actions, the Group has delivered savings of approximately GBP4.0m
on an annualised basis.
Since year end, the Group has continued to closely monitor the
economy and buyer behaviour in both the housing and land market and
carefully manage its activities to limit exposure in the slower
sales environment. With private housing reservations remaining
subdued and the uncertainty around when demand will improve, the
Board is now acutely focused on managing cash flow and prioritising
cash generation to reduce debt. Accordingly, the Group will now
only build a private home once a reservation is secured, which will
improve cash generation in this part of this business. The Group is
actively seeking land sales, on favourable terms, in order to
accelerate the realisation of cash from the Group's large land bank
- with the target of selling 800-1,000 plots within two years. The
Group will also take action to further reduce its cost base where
necessary and has paused the payment of dividends until debt has
been materially reduced.
Through these actions, the Group will limit its exposure to the
uncertain conditions in the short term while maximising cash
generation to reduce debt and thereby be in a stronger position for
when normalised demand returns. This is further supported by having
one of the largest land banks in Scotland with 6,712 owned plots -
83% with planning permission - and strategic options over a further
3,255 acres, equating to c. 33,000 plots.
Land Bank
During the year, the Group strengthened its land bank with the
acquisition of Mactaggart & Mickel Homes. This comprised a
total of 701 plots in highly desirable locations within the Central
Belt of Scotland and strategic options over a further c. 2,300
acres.
At the same time, the Group continued to realise value from its
large, high-quality land bank with the sale of land to a
housebuilder. The Group is actively seeking further opportunities
for land sales where the terms and price are desirable and is
currently in discussions with a number of national housebuilders
about a selection of its sites. The slowdown across the industry
has had a corresponding impact on the land market, however the
Group expects this position to change in the near term and the
Group will be well placed to benefit from this pent-up demand.
Land buying activity was significantly reduced in response to
the current market conditions. In addition, the Group made the
decision to no longer pursue Gavieside in Livingston, a site of
2,500 plots without planning approval, that had previously been
identified as a further Village development. Having explored
various options, the Group concluded that, under current market
conditions and with a difficult planning environment, it would be
prudent to reduce cash outflows and that its resources will be
better utilised by focusing on its sites that are more advanced.
Accordingly, the Group no longer has the Gavieside site under
option.
At 31 May 2023, the Group had 6,712 owned plots and strategic
options over a further 3,255 acres, equating to c. 33,000
plots.
Of the owned land bank, 83% has planning permission (including
detailed and outline planning), which provides an asset for cash
generation. The gross development value of the owned land bank at
31 May 2023 was GBP1.9bn.
Approximately 22% of the land under strategic option is
contracted and c. 14% has planning permission.
At year end, the Group was active on 50 developments (31 May
2022: 51 active developments) and during the year 16 developments
were completed and 15 new active developments were added to the
land bank (of which 7 were under Mactaggart & Mickel
Homes).
Private Housing
The number of private home completions increased by 21.6% to 866
(2022: 712), which primarily reflects the contributions from
Tulloch Homes and Mactaggart & Mickel Homes.
The challenging market backdrop impacted reservation rates as
increased mortgage rates combined with ongoing cost-of-living
pressures reduced affordability and homebuyer confidence. In
particular, there was a sharp reduction in sales levels following
the UK Government's mini-budget in September 2022, which remained
low for a three-month period. While there was recovery in January
to May 2023, the forward order book at year end was below that of
the previous year.
The Group saw a further softening in demand following the Bank
of England increasing interest rates to 5% towards the end of June
2023. Sales levels remained low over the summer weeks, with a
traditional seasonal dip during the school holidays. Since schools
in Scotland reopened in the middle of August, reservation rates
have continued to be significantly below the levels usually
experienced at this time of year. As a result, and as described
further above, the Group has taken the decision to significantly
curtail its development activities and only build homes when a
reservation is secured.
The average selling price ("ASP") for private housing during the
year was GBP293k (2022: GBP245k). This reflects the contribution
from Mactaggart & Mickel Homes, which has higher selling prices
than the rest of the Group, as well as a general increase in sales
prices across the Group's brands. This served to mitigate some of
the build cost inflation in private housing during the year. As
previously stated, private house price growth is no longer
anticipated in the short term, however Springfield is pleased to
note that selling prices have remained stable across the Group's
developments post year end, supported by the established reputation
of the high quality of its brands. This also reflects the
affordability of the market in Scotland (see 'Markets' section
below) as a result of the greater affordability in Scotland and
undersupply of housing.
As at 31 May 2023, the Group was active on 32 private housing
developments (31 May 2022: 31), with 9 active developments added
during the year, of which 4 were from Mactaggart & Mickel
Homes, and 8 developments completed. In total, as at 31 May 2023,
the owned private housing land bank consisted of 5,075 plots (31
May 2022: 4,605), of which 86% had planning permission.
Village Developments
Springfield Villages are large, standalone developments that
include infrastructure and neighbourhood amenities. Each Village is
designed to deliver approximately 3,000 homes, primarily for
private sale, but also include affordable, and at Bertha Park, PRS
housing, with ample green space and community facilities.
The Group has three Villages that are well underway and already
home to thriving communities: Dykes of Gray, Dundee; Bertha Park,
Perth; and Elgin South (formally 'Linkwood Village'), Elgin. Post
year end, in August 2023, a section 75 agreement was reached with
Stirling Council for 3,042 homes at Durieshill. The Village was
granted planning in 2019 and is believed to be the largest detailed
planning consent to have been granted in Scotland to date. With the
section 75 now in place, the Group has all consents required to
commence work on site, which is expected in 2024. As noted above,
during the year, the Group decided to no longer pursue Gavieside, a
site in Livingston that had been identified as a further Village,
in order to reduce cash outflows and focus resources on more
advanced sites.
While not immune to the broader market trends, demand for
Springfield's Villages remained high, driven by the desirability of
larger family housing, with local amenities and commuting distance
to major cities. In total (including homes delivered under
contract), there were 145 private housing completions at the
Villages during the year (2022: 143). At Elgin South, a new phase
of homes has been released for sale since year end. There was also
a continued expansion of amenities and strengthening of community
engagement at the Village developments, enabling the local
communities to become more established.
The success of Springfield's Villages has been recognised by
several industry awards. This year, two of the Group's Villages
secured awards from a UK-wide platform, WhatHouse? Bertha Park was
named Best Sustainable Development (Gold) and Dykes of Gray secured
the Best Public Realm (Silver) title. In Scotland, Bertha Park was
also named Best Large Development by the Scottish Home Awards.
Affordable Housing
The Group's affordable housing business was significantly
impacted during the year by the macro-economic conditions. Build
cost inflation, which peaked at c. 30%, substantially reduced gross
margin due to the industry's model of fixed-price contracts. In
particular, margin suffered from the delivery of two large,
long-term contracts that had been signed in early 2020 and were
therefore based on expectations of lower material and labour costs.
The Group was also impacted in the first half of the year by key
subcontractors going out of business, which necessitated the
finding of replacement subcontractors that led to some delays and
higher costs. Alongside this, the Scottish Government did not
review its affordable housing investment benchmarks during the year
to take account of the significant level of inflation.
As a result, during the year, Springfield took the decision to
pause entering new long-term affordable-only contracts. However,
post year end, in June 2023, the Scottish Government increased the
affordable housing investment benchmarks by 16.9%. This, combined
with a reduction in levels of cost price inflation, is expected to
enable housing associations to increase the price of affordable
housing contracts to progress the building programmes required to
meet the Government's affordable housing targets. Accordingly,
along with other housebuilders, the Group is now finding affordable
housing more attractive. The Group has recommenced engaging with
affordable housing providers, with a focus on short-term contracts
with lower pricing risk, and is pleased to have signed one contract
on 31 May 2023 for GBP9.7m and another post year end for GBP8.1m
for the delivery of 40 affordable homes. The Group is currently in
negotiations for a further 13 contracts representing 460 homes.
The contract signed on 31 May 2023 was with the Wheatley Group
to deliver 55 homes (including nine private homes) at Deans South
in Livingston to regenerate a former residential Council
development that was condemned in 2004 and earmarked for
demolition. This reflects Springfield's longstanding commitment to
the transformation of Deans South, and support for the local
community.
The fundamentals of affordable housing delivery remain strong.
The nature of affordable housing contracts provides high revenue
visibility with low capital exposure and strong cash flow dynamics.
The Group is well placed to benefit from a return in this market as
it has significant experience and an excellent track record, having
been delivering developments exclusively dedicated to affordable
housing since 2002. Accordingly, it has established relationships
with housing associations, local authorities and other public
bodies throughout Scotland. The Group is encouraged by the
interactions that it is having with affordable housing providers
since the increasing of the affordable housing investment
benchmarks and expects to sign further contracts in the coming
months, which will support the Group's cash generation. This also
includes opportunities for bulk sales of private homes that are
already under construction but unreserved.
During the year, the Group completed 328 affordable homes (2022:
405). Average selling price was GBP164k (2022: GBP159k). The number
of active affordable housing developments was 15 at 31 May 2023 (31
May 2022: 18), with five active developments (under section 75
agreements) added during the year and eight developments completed.
This included delivering the Group's first affordable housing
development for Aberdeenshire Council and completing an additional
phase of affordable housing at Elgin South Village for Moray
Council. Post year end, the Group completed handovers of another
affordable-only development under the Group's local authority
framework agreement with Moray Council, bringing the total number
of projects completed in this framework to six.
As at 31 May 2023, the total owned affordable housing land bank
consisted of 1,637 (31 May 2022: 1,626), of which 79% had planning
permission.
Contract Housing
In contract housing, the Group provides development services to
third party private organisations and receives revenue based on
costs incurred plus fixed mark up. To date, this has largely
consisted of services provided to Bertha Park Limited, which,
during the year, included homes across all tenures - private,
affordable and PRS housing. During the year, contract housing also
included a small number of PRS houses to complete historic
contracts through Mactaggart & Mickel Homes.
At 31 May 2023, the contract housing land bank with planning
consent consisted of 603 plots (31 May 2022: 675). The 107 homes
completed during the year (2022: 125) comprised 57 private homes,
12 affordable homes and 38 PRS homes at Bertha Park Village as well
as 10 homes through Mactaggart & Mickel Homes.
This handover of homes for PRS at Bertha Park Village marked the
completion of the Group's first PRS contract. They represent the
first houses built specifically for private rent in Scotland and
the Group has been pleased to note the popularity of the quality,
energy-efficient homes amongst families looking to live in the
area. While the strategy to expand PRS activity was put on hold
following the introduction of rent control by the Scottish
Government, the Group is hopeful that opportunities to build more
PRS homes, particularly in its Village developments, will return
when PRS providers adjust to the policy environment and invest in
Scotland.
Acquisition
At the start of the year, in June 2022, the Group acquired the
Scottish housebuilding business of Mactaggart & Mickel Group
Ltd for a total consideration of GBP46.3m to be paid over five
years, interest-free, with an option of a payment holiday for one
year. Mactaggart & Mickel Homes is a premium brand housebuilder
that has been delivering high-quality housing across the Central
Belt of Scotland for almost 100 years. Under the terms of the
acquisition, the Group acquired seven live private, affordable and
contracting sites with work in progress, and acquired a brand
licence to build homes as Mactaggart & Mickel Homes on a
further 11 private and affordable sites, which would transfer to
Springfield as homes are sold in line with the payments of the
deferred consideration (with a minimum annual payment of GBP7.7m).
In addition, the Group was given strategic options over a further
c. 2,300 acres of land still owned by Mactaggart & Mickel Group
Ltd across Scotland.
The acquisition also included Timber Systems, a timber frame
factory near Glasgow. The addition of a second timber frame
factory, to complement the Group's pre-existing facility in Elgin,
will secure kit supply and increase capacity for future growth
while further reducing Springfield's carbon footprint. It also
enables sales of kits to third parties. In addition, as part of the
consolidation progress, the Group undertook some restructuring of
the Mactaggart & Mickel Homes business to consolidate some of
the operations with the existing Group, which has generated cost
savings.
Financial Review
For the year ended 31 May 2023, revenue increased by 29.2% to
GBP332.1m (2022: GBP257.1m). The significant increase in revenue
was driven by the acquisitions of Tulloch Homes in December 2021
and Mactaggart & Mickel Homes in June 2022, reflecting their
first full 12-month contributions.
Revenue 2023 2022 Change
GBP'000 GBP'000
Private housing 253,362 174,442 +45.2%
--------- --------- --------
Affordable housing 53,931 64,251 -16.1%
--------- --------- --------
Contract housing 19,681 16,494 +19.3%
--------- --------- --------
Other 5,158 1,908 +170.3%
--------- --------- --------
TOTAL 332,132 257,095 +29.2%
--------- --------- --------
Private housing remained the largest contributor to Group
revenue, accounting for 76.3% (2022: 67.9%) of total sales and grew
by GBP79.0m to GBP253.4m. This was primarily due to contributions
from the acquisitions, but the Group also achieved increased sales
in private housing of 13.2% on an organic basis.
The reduction in affordable housing revenue to GBP53.9m (2022:
GBP64.3m) reflects lower activity, as well as inflation in
development costs based on the revenue recognition model in
affordable housing.
In contract housing, revenue grew as the Group completed
delivery of the contract for PRS homes at Bertha Park; completed
two PRS developments for Mactaggart & Mickel Homes; and
generated increased revenue from private housing delivery at Bertha
Park. There was also a significant increase in other revenue,
driven by GBP3.7m received from a strategic land sale (2022:
GBP0.2m in land sales).
Gross profit increased by 11.4% to GBP48.0m (2022: GBP43.1m) due
to the significant growth in revenues. Gross margin was 14.5%
(2022: 16.8%), which reflects a significant reduction in affordable
housing margin as well as a reduction in private housing margin,
primarily reflecting sales mix. In private housing, higher costs
impacted the margin of a small number of sites that were reaching
the end of development. However, in general, cost price inflation
in private housing was softened by house sales price inflation. In
affordable housing, margin was significantly impacted by the
industry-wide inflation in materials and labour costs as a result
of the fixed-price nature of contracts in this area of the
business.
Administrative expenses, excluding exceptional items, were
GBP28.0m (2022: GBP20.9m). This reflects the increase in overheads
from the acquisitions of Tulloch Homes and Mactaggart & Mickel
Homes. During the year, the Group focused on tight cost control and
took a number of actions to address the uncertain market conditions
and reduce the fixed cost base, such as restructuring the acquired
Mactaggart & Mickel Homes business to consolidate some of the
operations with the existing Group, and pausing recruitment and
reducing staffing levels in areas most impacted by the downturn. As
a result of these actions, the Group has delivered savings of
approximately GBP4.0m on an annualised basis.
Finance costs were GBP4.8m (2022: GBP1.9m), which represents
greater bank interest payments due to the rise in interest rates
and the increase in bank debt to fund the Mactaggart & Mickel
Homes acquisition and the first deferred payment for the
acquisition of Tulloch Homes.
Exceptional items were GBP0.7m (2022: GBP1.1m), which mainly
relates to the Mactaggart & Mickel Homes acquisition.
Operating profit was GBP20.0m (2022: GBP21.5m). Excluding
exceptional items, operating profit was GBP20.7m (2022: GBP22.6m).
Statutory profit before tax was GBP15.3m (2022: GBP19.7m) and
adjusted profit before tax and exceptional items was GBP16.0m
(2022: GBP20.8m). This reflects the lower gross margin and
increased administrative expenses offsetting the growth in revenue.
It also includes the impact of a c. GBP750k write-off as a result
of the decision to no longer pursue Gavieside.
Basic earnings per share (excluding exceptional items) were
10.74 pence (2022: 15.63 pence). Statutory basic earnings per share
were 10.19 pence (2022: 14.74 pence). Return on capital employed
was 8.8% (2022: 13.6%), which primarily reflects the significant
increase in total assets due to the land and work in progress
gained through the Mactaggart & Mickel Homes acquisition.
In June 2022, the Group acquired Mactaggart & Mickel Homes
for a total consideration of GBP46.3m, comprising GBP10.5m cash
paid on completion and a deferred cash consideration of GBP35.8m to
be paid proportionally as homes are sold over a five-year period,
of which GBP5.1m was paid by year end. The acquisition is being
funded from Springfield's internal resources and existing debt
facilities with Bank of Scotland.
Net debt at 31 May 2023 was GBP67.7m compared with GBP38.1m at
31 May 2022. Net debt to EBITDA was 2.9 times (2022: 1.6 times).
The net debt increase primarily reflects the Mactaggart &
Mickel Homes acquisition; the first deferred payment of GBP6.1m for
the acquisition of Tulloch Homes; and the significantly higher
interest payments as described above.
The Group's revolving credit facility of GBP87.5m is in place
until January 2025. In December 2022, the Group's overdraft
facility was increased from GBP2.5m to GBP12.5m with an expiry date
of 31 August 2023, to provide extra short-term headroom. This has
now been extended to 30 September 2024. In addition, a term loan of
GBP18.0m has been put in place with a repayment date of 30
September 2024 to provide extra surety against the current market
backdrop.
The Group is highly focused on reducing its debt position. As
described above, it has taken decisive action in response to the
market conditions and is significantly curtailing its activities to
limit exposure and increase cash generation while also seeking land
sales. As a result, the Group is planning to reduce net debt to c.
GBP55m by 31 May 2024.
Customer Satisfaction
Springfield strives for excellence in customer service through
all stages of the house buying process and the quality of the
houses the Group builds. The Group is exceptionally proud to offer
customers a high level of specification as standard as well as
significant choice. Feedback from mortgage lenders and surveyors
suggests that they also recognise the high specification that is
offered as standard and have strong confidence in the Group's house
prices.
In July 2022, Springfield registered for the New Homes Quality
Board Code of Practice ("NHQB Code"), well ahead of the December
2022 deadline. The NHQB Code aims to improve consumer protection
covering important aspects of the new home construction, inspection
and the sales process. In preparation for activation, a full review
of processes was undertaken across the Group ensuring compliance
and best practice was in place. Across the Springfield Group,
customers who reserved homes since 4 April 2023 have done so under
the new NHQB Code. In addition, a new formal, online complaints
process was launched to improve service levels and the monitoring
of any complaints received. New processes being rolled out across
operations complemented the Quality Management System and ISO 9001
was recertified within the year.
The Group has set an objective to work towards 100% customer
satisfaction to encourage year-on-year improvements and ensure the
Group is always doing what it can to provide the best product and
service to customers. This year the Group achieved an overall
customer satisfaction rating of 94% (2022: 93%), showing a positive
start against this aspiration.
Build Quality and Efficiencies
Through acquiring new brands within the Springfield Group,
Springfield has inherited a range of over 200 house types. Detailed
planning consents and building warrants that came along with each
acquisition made it efficient to build out the homes that were
already planned. This year, however, the Group has undertaken a
fundamental review of the house types offered across the Group and
has rationalised this portfolio down to the most popular homes that
are most efficient to plot, build and be capable of accommodating
future building standards to maximise energy efficiency.
For all new planning applications, homes for each brand will now
be selected from a portfolio of under 50 house types. Where
planning is in place for larger sites, remix applications are also
to be considered to bring forward the benefits. The rationalisation
of house types will enable the standardisation of construction
processes and will ensure the Group maximises capacity within its
two timber kit factories. Standardisation in component parts has
also been agreed, including for kitchens, bathrooms, window sizes
and roof details, which will also enable the Group to capitalise on
purchasing opportunities.
Environment & People - ESG
This year the Group published its first ESG Strategy, bringing
together all the good practice from across the brands and regions
and setting new, challenging objectives to ensure the Group
continues to improve. The strategy included priorities identified
across the ESG spectrum that were regarded as critical to the
future success of the Group and valued by its varied stakeholders.
Being the first year of a formal strategy, much of the objectives
involved research and data collection, setting a baseline upon
which to improve, measure and report performance.
A new governance structure was launched with the CEO leading a
dedicated ESG Committee of the Board. Since its launch in August
2022, the ESG Committee has met a number of times to monitor
progress of strategy delivery, with a report having been made to
the Board. Alongside this annual report, the Group is pleased to be
publishing an update to its ESG Strategy for investors. The
publication, which can be found within the ESG pages of the
Springfield Group website, reports on the performance within year
one, summarises findings within today's economic and environmental
climate and sets objectives for the year ahead.
Alongside strategy development and delivery, the Group became
the first housebuilder to engage with NextGeneration Core. This
initiative was recently launched by NextGeneration - which provides
an external assessment of the largest 25 housebuilders in the UK -
to encourage small to medium-sized businesses to benchmark
performance. Through the voluntary scheme, the Group was assessed
against 14 key criteria including policies for reducing energy use
and waste, health and safety standards, commitment to placemaking
and affordable housing, and educating its workforce. In the
feedback, the Group's drive to reach net zero stood out, with its
head start on the use of air source heat pumps being commended. In
recognition of its efforts in placemaking, it was noted that the
Group's role in community creation met aspirational standards and
far exceeded practice elsewhere in the wider UK industry.
The Group's dedicated Community Engagement Co-ordinator has made
a strong impact within the first full year in post, working closely
with communities where the Group is building and engaging new
residents within Village developments through community events.
This year, steps were taken to strengthen the Group's approach to
community engagement during the planning process. Despite the
challenges in delivering affordable housing, the Group's commitment
to regeneration was reinforced by the signing of the contract to
deliver new homes at Deans South.
As noted above, the Group's abilities in placemaking and the
creation of sustainable communities, particularly at its Village
developments, were recognised with several awards during the
year.
The Group's approach to charitable donations was refreshed
during the year to ensure it maximised its impact, which included
the creation of a dedicated webpage encouraging applications. This
year, the Group donated GBP80,284, supporting 86 local causes as a
result.
Markets
As described above, market conditions across the Group's
business were particularly challenging during the year, which has
continued post period. There are initial indicators of recovery
with the Consumer Price Index inflation rate falling in June and
July and prevailing build cost inflation now stable below 5%, with
the Group experiencing price reductions in materials. A number of
mortgage providers have reduced mortgage rates, and the mortgage
market is supportive of new build homes, particularly given their
energy credentials. However, there remains significant uncertainty
with low reservation rates across the industry in private
housing.
Towards the end of the year, alterations were made to the
National Planning Framework (referred to as "NPF4") in Scotland,
resulting in greater complexity within the planning system and
restrictions on the promotion of sites not allocated within a Local
Development Plan. As a result, the Group's land bank, with a large
proportion of planning already in place, has become more valuable
and, going forward, is expected to be in high demand.
Within a UK context, the Scottish market is typically more
stable than the broader market and the South of England in
particular. This is reflected in the lower levels of house price
inflation in recent years. With many regions experiencing a decline
in average house prices, it is notable that average house price
growth in Scotland is ahead of other UK regions in the year to July
2023 (source: Zoopla). This is partly due to the greater
affordability in Scotland, characterised by lower loan to income
levels with data showing that it is cheaper to buy a home than rent
privately. The Group's private housing is also supported by the
Scottish missive system, which ensures that customers are
contracted into the purchase much earlier in the build
programme.
In affordable housing, with the Scottish Government increasing
its affordable housing investment benchmarks since year end, and
with build cost inflation easing, the Group envisages a return in
this area of the business to deliver against built-up demand -
which remains exceptionally high with 178,000 applicants on Local
Authority housing lists across Scotland. In addition, the Scottish
Government remains committed to delivering new affordable homes,
illustrated by its target to deliver 110,000 energy efficient
affordable homes by 2032.
The position regarding PRS housing has remained unchanged. The
uncertainty surrounding the Scottish Government rent caps, which
had been put in place to support families with cost-of-living
concerns, has deterred PRS providers from entering new contracts in
Scotland. While there is nothing yet to suggest a change to this
policy environment, the Group is hopeful that proven demand for
purpose-built, high quality, energy efficient PRS homes will drive
investment into Scotland. The 75 PRS homes delivered at Bertha Park
have been extremely popular amongst families looking to move into
the area. In addition, recent data from Zoopla suggests that
Scotland has overtaken London as the area with the fastest rental
growth.
Moreover, there remains an undersupply of all types of housing
across Scotland, which can only be satisfied through the delivery
of new homes.
Dividends
While recognising the importance of the dividend to
shareholders, the Board has resolved not to propose a dividend for
FY 2023 as a measure to preserve liquidity in response to market
conditions. The Group's focus is on managing cash flow and reducing
its debt so that it is well positioned for the medium term. The
Board intends to resume making dividend payments once the Group's
bank debt is materially reduced.
Outlook
The challenging and uncertain market conditions have been
sustained into the new financial year, with reservations in private
housing continuing to be significantly depressed due to reduced
homebuyer confidence as interest rates have remained high. The
Board does not expect this to materially improve before Spring
2024. To limit exposure in the uncertain conditions, the Group is
curtailing its private housing development activity to only
commence building a home once it is reserved. This will enable the
Group to maximise cash generation from work-in-progress to reduce
the Group's debt. The Group is also encouraged by the engagement it
is having with affordable housing providers following Scottish
Government increasing the affordable housing investment benchmarks.
The Group now expects affordable housing contracts signed this year
to make a material contribution to Group revenue while also
supporting the Group's efforts to maximise cash generation due to
the strong cash flow dynamics associated with affordable housing.
The Group is also actively pursuing land sales to accelerate cash
realisation from its large land bank, and will further reduce its
cost base where necessary.
Accordingly, for FY 2024, the Group now expects to report
adjusted profit before tax of c. GBP10m-GBP14m and is planning to
reduce net debt to c. GBP55m by 31 May 2024.
Notwithstanding the short-term challenges, the fundamentals of
the Group's business and of the Scottish housing market remain
strong. The Group offers high quality, energy efficient homes in
popular locations across Scotland under multiple highly respected
brands. It has one of the largest land banks in Scotland, with
6,712 owned plots - 83% of which have planning permission - and
strategic options over a further 3,255 acres, equating to c. 33,000
plots. This can be developed - with a low cost per plot - for years
to come as well as providing an asset for cash generation.
There remains an undersupply of housing across all tenures in
Scotland, which is being exacerbated by current conditions and can
only be rectified through the building of new homes. The Scottish
Government's increase of the affordable housing investment
benchmarks demonstrates its commitment to affordable housing. While
in private housing, there is greater affordability in Scotland
compared with the UK as a whole. Together, this provides an
excellent platform to take advantage of the next upturn in the
market cycle.
As a result, while the current period is not without its
challenges, the Board remains confident in the Group's prospects
and in its ability to generate shareholder value.
Publication of Annual Report
The Company's annual report and accounts for the year ended 31
May 2023 are being sent to shareholders today and have been made
available on the 'Financial Results and Reports' page of the
Company's website: www.thespringfieldgroup.co.uk
COnsolidated PROFIT AND LOSS ACCOUNT
FOR THE YEARED 31 May 2023
2023 2022
Note GBP000 GBP000
Revenue 3 332,132 257,095
Cost of sales (284,177) (213,960)
---------- ----------
Gross profit 47,955 43,135
Administrative expenses before
exceptional items (27,955) (20,950)
Exceptional items 5 (720) (1,100)
---------- ----------
Total administrative expenses (28,675) (22,050)
Other operating income 688 396
Operating profit 19,968 21,481
Finance income 133 134
Finance costs (4,812) (1,889)
Profit before taxation 15,289 19,726
Taxation 4 (3,216) (3,652)
---------- ----------
Profit for the year and total
comprehensive income 12,073 16,074
========== ==========
Profit for the year and total
comprehensive income is attributable
to:
Owners of the parent company 12,073 16,074
12,073 16,074
========== ==========
Earnings per share
Basic earnings on profit for
the year 7 10.19p 14.74p
Diluted earnings on profit
for the year 7 9.90p 14.37p
Adjusted earnings per share
Basic earnings on profit for
the year 7 10.74p 15.63p
Diluted earnings on profit
for the year 7 10.43p 15.24p
Adjusted earnings per share is a non-GAAP measure and is
presented as an additional performance measure and is stated before
exceptional items.
The Group has no items of other comprehensive income.
COnsolidated BALANCE SHEET
FOR THE YEARED 31 May 2023
2023 2022
Non-current assets Note GBP000 GBP000
Property, plant and equipment 7,816 5,799
Intangible assets 5,953 5,758
Investments - 520
Deferred taxation 1,783 2,133
Trade and other receivables 5,000 5,641
-------- --------
20,552 19,851
-------- --------
Current assets
Inventories 277,633 230,095
Trade and other receivables 22,588 21,363
Cash and cash equivalents 8,909 16,390
-------- --------
309,130 267,848
-------- --------
Total assets 329,682 287,699
Current liabilities
Trade and other payables 55,788 68,513
Deferred consideration 10 11,785 6,119
Short-term obligations under
lease liabilities 1,884 1,284
Provisions 12 1,710 821
Corporation tax 362 273
-------- --------
71,529 77,010
-------- --------
Non-current liabilities
Long-term bank borrowings 9 70,673 50,486
Long-term obligations under lease
liabilities 4,016 2,670
Deferred taxation 3,615 3,726
Deferred consideration 10 24,332 6,455
Contingent consideration 11 2,000 2,000
Provisions 12 2,884 1,825
-------- --------
107,520 67,162
-------- --------
Total liabilities 179,049 144,172
-------- --------
Net assets 150,633 143,527
======== ========
Equity
Share capital 13 148 148
Share premium 13 78,744 78,744
Retained earnings 71,741 64,635
-------- --------
Equity attributable to owners
of the parent company 150,633 143,527
======== ========
consolidated Statement of Changes in Equity
FOR THE YEARED 31 MAY 2023
Share capital Share premium Retained Total
earnings
Notes GBP000 GBP000 GBP000 GBP000
1 June 2021 128 56,761 54,341 111,230
Share issue 20 21,983 - 22,003
Total comprehensive
income for the
year - - 16,074 16,074
Share-based payments - - 554 554
Dividends 6 - - (6,334) (6,334)
-------------- -------------- ---------- --------
31 May 2022 148 78,744 64,635 143,527
Total comprehensive
income for the
year - - 12,073 12,073
Share-based payments - - 601 601
Dividends 6 - - (5,568) (5,568)
-------------- -------------- ---------- --------
31 May 2023 148 78,744 71,741 150,633
============== ============== ========== ========
The share capital account records the nominal value of shares
issued.
The share premium account records the amount above the nominal
value received for shares issued, less share issue costs.
Retained earnings represents accumulated profits less losses,
and distributions. Retained earnings also includes share-based
payments.
Consolidated Statement of Cash Flows
year to 31 May 2023
2023 2022
Cash flows generated from operations GBP000 GBP000
Profit for the year 12,073 16,074
Adjusted for:
Exceptional items 720 1,100
Taxation charged 3,216 3,652
Finance costs 4,812 1,889
Finance income (133) (134)
--------- ---------
Adjusted operating profit before working
capital movement 20,688 22,581
Exceptional items (720) (1,100)
Gain on disposal of tangible fixed assets (312) (187)
Gain on disposal of investment (158) -
Share-based payments 601 554
Non-cash movement - 100
Amortisation of intangible fixed assets 255 161
Depreciation and impairment of tangible
fixed assets 2,257 1,724
--------- ---------
Operating cash flows before movements
in working capital 22,611 23,833
Increase in inventory (3,251) (16,505)
(Increase)/decrease in accounts and
other receivables (404) 4,253
(Decrease)/increase in accounts and
other payables (10,818) 7,503
--------- ---------
Net cash from operations 8,138 19,084
Taxation paid (2,900) (3,522)
--------- ---------
Net cash inflow from operating activities 5,238 15,562
--------- ---------
Investing activities
Purchase of property, plant and equipment (478) (376)
Proceeds on disposal of property, plant
and equipment 427 247
Proceeds on disposal of investment 678 -
Deferred consideration paid on acquisition
of subsidiary (6,138) (2,362)
Acquisition of subsidiary, net of cash
acquired (15,867) (41,525)
Purchase of intangible assets (30) (84)
--------- ---------
Net cash used in investing activities (21,408) (44,100)
--------- ---------
Financing activities
Proceeds from issue of shares - 22,728
Costs relating to share raise - (724)
Proceeds from bank loans 20,187 16,486
Payment of lease liabilities (2,147) (1,437)
Dividends paid 6 (5,568) (6,334)
Interest paid (3,783) (1,617)
--------- ---------
Net cash inflow from financing activities 8,689 29,102
--------- ---------
Net (decrease)/increase in cash and
cash equivalents (7,481) 564
Cash and cash equivalents at beginning
of year 16,390 15,826
--------- ---------
Cash and cash equivalents at end of
year 8,909 16,390
========= =========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2023
1. Organisation and trading activities
Springfield Properties PLC is incorporated and domiciled in
Scotland as a public limited Company and operates from its
registered office in Alexander Fleming House, 8 Southfield Drive,
Elgin, Morayshire, IV30 6GR.
2. Summary of significant accounting policies
The principal accounting policies adopted and applied in the
preparation of the financial statements are set out below.
These have been consistently applied to all the years presented
unless otherwise stated.
2.1 Basis of accounting
The financial information contained within this final results
announcement for the year ended 31 May 2023 and the year ended 31
May 2022 is derived from but does not comprise statutory financial
statements within the meaning of section 434 of the Companies Act
2006. Statutory financial statements for the year ended 31 May 2022
have been filed with the Registrar of Companies and those for the
year ended 31 May 2023 will be filed following the Company's annual
general meeting. The auditors' report on the statutory financial
statements for the year ended 31 May 2023 and the year ended 31 May
2022 is unqualified, does not draw attention to any matters by way
of emphasis, and does not contain any statement under section 498
of the Companies Act 2006.
The financial statements of Springfield Properties PLC have been
prepared in accordance with UK adopted international accounting
standards. The Group has adopted all the standards and amendments
to existing standards that are mandatory for accounting periods
beginning on 1 June 2022.
The financial statements have been prepared under the historical
cost convention except for contingent consideration.
The following standards have been issued but have not been
applied by the Group in these financial statements. These
amendments to standards and interpretations had no significant
impact on the financial statements:
-- Annual improvements to IFRS 2018-2020
-- Amendments to IAS 37 'Onerous contracts - Cost of fulfilling a contract'
-- Amendments to IAS 16 'Property, plant and equipment - Proceeds before intended use'
-- Amendments to IFRS 3 'Reference to the conceptual framework'
The following new standards and amendments to standards have
been issued but are not effective for the financial year beginning
1 June 2022 and have not been early adopted:
-- IFRS17 Insurance contracts (including amendments to IFRS17)
-- Amendments to IAS 12 'Deferred tax related to assets and
liabilities arising from a single transaction'
-- Amendments to IAS 1 and IFRS PS2 'Disclosure of accounting policies'
-- Amendments to IAS1 and IFRS PS2 'Definition of accounting estimates'
-- Amendments to IAS 12 'International tax reform'
-- Amendments to IAS 1 'Classification of liabilities as current or non-current'
-- Amendments to IFRS16 'Lease liability in a sale and leaseback
The new standards and amendments to the standards noted above
are expected to have no significant impact on the financial
statements.
2.2 Basis of consolidation
The consolidated financial statements incorporate those of
Springfield Properties PLC and its subsidiaries and jointly
controlled entities. Where the Company has control over an
investee, it is classified as a subsidiary. The Company controls an
investee if all three of the following elements are present: power
over the investee, exposure to variable returns from the investee,
and the ability of the investor to use its power to affect those
variable returns. Control is reassessed whenever facts and
circumstances indicate that there may be a change in any of these
elements of control. Contingent consideration is measured at its
fair value at the date of acquisition. If the contingent
consideration meets the definition of equity, it is not remeasured,
and settlement is accounted for within equity. Other contingent
consideration is remeasured at fair value at each reporting date
with subsequent changes in the fair value of the contingent
consideration recognised in the consolidated profit and loss
account.
All financial statements are made up to 31 May 2023.
All intra-Group transactions, balances and unrealised gains on
transactions between Group companies are eliminated on
consolidation.
2.3. Functional and presentation currencies
The financial statements are presented in Pound Sterling (GBP),
rounded to the nearest GBP000, which is also the currency of the
primary economic environment in which the Group operates (its
functional currency).
2.4. Going concern
In order to support the going concern period to 30 September
2024, the Board-approved budget to May 2024, with a further year
added to May 2025, formed the initial basis to confirm the
appropriateness of the going concern assessment.
Following the subsequent weakening in demand, the Board-approved
budget has now been superseded by a reforecast scenario with the
expected number of private home sales in the year to 31 May 2024
reduced by 12% from the original Board-approved budget with sales
weighted to the second half of the year, but where the reduction is
expected to be offset by additional affordable contract income
currently under negotiation and through a slowdown in
work-in-progress payments from stopping speculative build.
In addition, the Group has prepared a worst-case sensitivity
with the number of private home sales in the year to 31 May 2024
being 12% behind the Board-approved budget, with sales weighted to
the second half of the year and with no additional affordable
income.
Under this worst-case sensitivity, the peak debt level would
have been in excess of the Group's banking facilities of
GBP100m.
To prepare for this worst-case scenario, should it occur, the
bank has extended existing facilities and granted an additional
term loan of GBP18.0m with a repayment date of 30 September 2024.
The term loan will be repaid from the Group's trading activities.
The Board has already taken the decision to not pay a dividend
until the bank debt is materially reduced. In addition to this, the
Group is targeting land sales to further reduce the longer-term
debt.
Under this worst-case scenario, the peak borrowing, which occurs
in December 2023, utilises 94% of the extended facilities. However,
by the year end in May 2024, the facility utilisation is forecast
to drop to around 37%. At all times the Group is able to operate
within its bank facilities and covenants.
While the Board has confidence in the robustness of the asset
base and considers this worst-case scenario to be cautious, were
there to be a greater downturn in the market, there are a number of
further mitigating actions that are within the control of the Group
and could be pursued. These include additional land sales, greater
slowing of development activity to preserve cash and further
reductions in the cost base.
Accordingly, the Directors believe that it remains appropriate
to prepare the financial statements on a going concern basis. The
Directors are confident that the Group has adequate resources to
continue in operational existence for the foreseeable future and
are satisfied that the Group will generate sufficient cash to meet
its liabilities as and when they fall due for a period of 12 months
from the signing of the annual report and financial statements for
the year ended 31 May 2023.
2.5. Revenue and profit recognition
Sale of private homes
Revenue on private home sales is recognised at a point in time
and the performance obligation is the transfer of the completed
property to the customer on legal completion and receipt of cash.
Revenue is measured at the fair value of the consideration received
net of VAT and trade discounts.
The Group's site valuation process determines the forecast
profit margin for each site. The valuation process acts as a method
of allocating land costs and construction costs of a development to
each individual plot based on the overall development margin and
drives the recognition of costs in the profit and loss account as
each plot is sold. Any changes in the forecast profit margin of a
site from changes in sales prices or costs to complete is
recognised across all homes sold in both the current period and
future periods.
Revenue on contracts recognised over time
Revenue from affordable housing contracts is recognised over
time as development progresses as the construction activity
enhances an asset controlled by the customer.
Where the outcome of a contract can be estimated reliably, the
amount of revenue recognised depends on the stage of completion.
This is based on the development costs incurred as a proportion of
the total expected development costs (the input method).
Contractual cashflows are determined by independent surveys of
work performed to date. These do not always align with the revenue
recognised on the underlying performance obligation and any
cashflows received that are in excess of the revenue recognised are
included as payments on account. Where the cashflows received are
less than revenue recognised the difference is included within
contract assets.
Revenues derived from variations on contracts are recognised
only when they can be reliably measured. Where the outcome of a
construction contract cannot be estimated reliably, contract costs
are recognised as expenses in the period in which they are incurred
and contract revenue is recognised to the extent of contract costs
incurred where it is probable that they will be recoverable. When
it is probable that total contract costs will exceed contract
turnover, the expected loss is recognised as an expense
immediately.
Land sales
Revenue from land sales is recognised on legal completion based
on fair value at transfer.
Plant hire revenue
Plant hire revenue represents amounts receivable for the
short-term hire of plant and equipment. Revenue is recognised when
the hire period commences and the customer benefits from the use of
the plant and equipment and is recognised evenly throughout the
hire period.
2.6. Grants
Grants are recognised when it is probable that the grants will
be received and that all related conditions will be met, usually on
submission of a valid claim for payment. Revenue grants are
credited to the profit and loss account as and when the relevant
expenditure is incurred.
2.7. Employee benefits
The costs of short-term employee benefits are recognised as a
liability and an expense in the period in which the services are
received,unless those costs are required to be recognised as part
of the cost of stock.
The cost of any unused holiday entitlement is recognised in the
period in which the employee's services are received.
Termination benefits are recognised immediately as an expense
when the Group is demonstrably committed to terminate the
employment of an employee or to provide termination benefits.
2.8. Retirement benefits
Payments to defined contribution retirement benefit schemes are
charged as an expense as they fall due.
2.9. Net finance costs
Finance costs comprise interest payable on bank loans and the
unwinding of the discount from nominal to present day value of
provisions, deferred consideration and lease liabilities. Finance
costs are capitalised when they are directly attributable to the
acquisition, contribution or production of an asset that
necessarily takes a substantial period of time to get ready for its
intended use or sale. Finance income comprises the unwinding of the
discount from nominal to present day value of shared equity.
Interest income and interest payable is recognised in the income
statement on an accruals basis.
2.10. Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit as reported in the
profit and loss account because it excludes items of income or
expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the reporting
date.
Deferred tax
Deferred tax is provided using the liability method on temporary
differences between the tax bases of assets and liabilities and
their carrying amounts for financial reporting purposes at the
reporting date.
Deferred tax is not recognised on temporary differences arising
from the initial recognition of goodwill or other assets and
liabilities in a transaction that affects neither the tax profit
nor the accounting profit.
Deferred tax is measured on a non-discounted basis using the tax
rates and laws that have then been enacted or substantively enacted
by the reporting date.
The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered. Deferred tax is
calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised.
Deferred tax is charged or credited in the profit and loss account,
except when it relates to items charged or credited directly to
equity, in which case the deferred tax is also dealt with in
equity. Deferred tax assets and liabilities are offset when the
Group or Company has a legally enforceable right to offset current
tax assets and liabilities and the deferred tax assets and
liabilities relate to taxes levied by the same tax authority.
2.11. Exceptional items
Exceptional items are those material items which, by virtue of
their size or incidence, are presented separately in the profit and
loss account to enable a full understanding of the Group's
financial performance.
Transactions that may give rise to exceptional items include
transactions relating to acquisitions and costs relating to changes
in share capital structure as well as redundancy and restructuring
costs.
2.12. Property, plant and equipment
Tangible fixed assets are initially measured at cost and
subsequently measured at cost net of depreciation and any
impairment losses. Depreciation is recognised so as to write off
the cost of assets less their residual values over their useful
lives on the following bases:
Buildings - 2% and 5% straight line
Plant and machinery - 2-10 years straight line
Fixtures, fittings & equipment - 2-5 years straight line
Motor vehicles - 4-5 years straight line
Right-of-use leased assets - over the lease term, straight line with no residual value
Land is not depreciated
The gain or loss arising on the disposal of an asset is
determined as the difference between the sale proceeds and the
carrying value of the asset and is credited or charged to the
profit and loss account.
2.13. Intangible fixed assets
Intangible assets comprise market related assets (e.g.
trademarks, imprints & brands) and goodwill on acquisition.
Market related assets
Trademark assets in relation to Springfield Properties PLC are
expected to have an indefinite useful life; however, impairment
reviews are performed annually. Any impairment losses or reversals
of impairment losses are recognised immediately in the profit and
loss account.
The brand asset in relation to Tulloch Homes has a 15-year
useful life and amortisation is charged on a straight-line
basis.
Goodwill on acquisition
Goodwill on acquisitions of subsidiaries or businesses
represents the excess of the consideration transferred, the amount
of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previous equity interest in the
acquiree over the fair value of the net identifiable assets
acquired.
Impairment reviews are performed annually with any impairment
losses being recognised immediately in the profit and loss
account.
2.14. Fixed asset investments
Interests in subsidiaries are initially measured at cost and
subsequently measured at cost less any accumulated impairment
losses. The investments are assessed for impairment at each
reporting date and any impairment losses are recognised immediately
in the profit and loss account. Costs associated with the
acquisition of subsidiaries are recognised in the profit and loss
account as an exceptional item.
2.15. Impairment of fixed assets
At each reporting end date, the Group reviews the carrying
amounts of its tangible fixed assets to determine whether there is
any indication that those assets have suffered an impairment loss.
If any such indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the impairment
loss (if any). Where it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to
sell and value-in-use. Any impairment loss and reversal of losses
are recognised in the profit and loss account.
2.16. Inventories and work in progress
Property, including land held under development, acquired or
being constructed for sale in the ordinary course of business,
rather than to be held for rental or capital appreciation, is held
as stock and is measured at the lower of cost and net realisable
value.
Cost comprises the invoiced value of the goods purchased and
includes attributable direct costs, labour and overheads and where
possible and directly attributable to a site borrowing costs will
be included.
Net realisable value is the estimated selling price in the
ordinary course of the business, based on market prices at the
reporting date and discounted for the time value of money if
material, less estimated costs of completion and the estimated
costs necessary to make the sale. Any excess of the carrying amount
of stocks over its net realisable value is recognised as an
impairment loss in the profit and loss account.
At each reporting date, an assessment is made for impairment.
Any excess of the carrying amount of stocks over its estimated
selling price less costs to complete and sell is recognised as an
impairment loss in the profit and loss account.
Where sites are 'secured' via option agreements, these sites are
only included as stock when the agreement becomes
unconditional.
Options included as part of stock are stated at the lower of
cost and net realisable value.
2.17. Financial instruments
Financial instruments are recognised in the balance sheet when
the Group becomes party to the contractual provisions of the
instrument.
Financial assets and liabilities are offset, with the net
amounts presented in the financial statements, when there is a
legally enforceable right to set off the recognised amounts and
there is an intention to settle on a net basis or to realise the
asset and settle the liability simultaneously.
Financial assets at amortised cost
Financial assets with fixed or determinable payments that are
not quoted in an active market. Financial assets are recognised
initially at cost. Subsequent to initial recognition they are
measured at amortised cost using the effective interest rate
method, less any impairment losses.
Loans outside the Group are valued at the recoverable amount and
a market rate of interest is charged.
Financial assets at amortised cost
Financial assets with fixed or determinable payments that are
not quoted in an active market. Financial assets are recognised
initially at cost. Subsequent to initial recognition they are
measured at amortised cost using the effective interest rate
method, less any impairment losses.
Loans outside the Group are valued at the recoverable amount and
a market rate of interest is charged.
Impairment of financial assets
The Group recognises an allowance for expected credit losses for
all debt instruments not held at fair value through the profit and
loss account. Expected credit losses are based on the difference
between the contracted cash flows due in accordance with the
contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original effective interest
rate.
For trade receivables and, in the Parent Company, intercompany
receivables, the Group applies a simplified approach in calculating
expected credit losses. The Group does not track changes in credit
risk, but instead recognises a loss allowance based on lifetime
expected credit losses at each reporting date.
Derecognition of financial assets
Financial assets are derecognised only when the contractual
rights to the cash flows from the asset expire or are settled, or
when the Group transfers the financial asset and substantially all
the risks and rewards of ownership to another entity, or if some
significant risks and rewards of ownership are retained but control
of the asset has transferred to another party that is able to sell
the asset in its entirety to an unrelated third party.
Financial liabilities
All of the Group's financial liabilities are measured at
amortised cost.
Other financial liabilities
Other non-derivative financial liabilities are initially
measured at historical cost less any directly attributable
transaction costs. Subsequent to initial recognition, these
liabilities are measured at amortised cost using the effective
interest method.
The effective interest method is a method of calculating the
amortised cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest rate is
the rate that exactly discounts estimated future cash payments
through the expected life of the financial liability to the net
carrying amount on initial recognition.
Derecognition of other financial liabilities
Financial liabilities are derecognised when the Group's
contractual obligations expire or are discharged or cancelled.
2.18. Deferred consideration
Deferred consideration payments are initially recognised at fair
value at the date of acquisition, which is based on the timing of
the cash outflows and an appropriate discount rate. It is
subsequently measured at amortised cost.
2.19. Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at
call with banks and bank overdrafts. Bank overdrafts are shown
within borrowings in current liabilities.
2.20. Dividends
Dividends are recognised as liabilities in the period in which
the dividends are approved and once they are no longer at the
discretion of the Company
2.21. Leases
All leases are accounted for by recognising a right-of-use asset
and a lease liability except for leases of low value assets (less
than GBP5,000) and leases with a duration of 12 months or less.
Lease liabilities are measured at the present value of the
contractual payments due to the lessor over the lease term, with
the discount rate determined by reference to the Group's
incremental borrowing rate at commencement of the lease.
Right-of-use assets are initially measured at the amount of the
lease liability, reduced for any lease incentives received.
Subsequent to initial measurement lease liabilities increase as a
result of interest charged at a constant rate on the balance
outstanding and are reduced for lease payments made. Right-of-use
assets are amortised on a straight-line basis over the remaining
term of the lease. Right-of-use assets comprise the Group's
existing premises in Elgin, Larbert, Inverness and Glasgow along
with certain items of office equipment and motor vehicles.
2.22. Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of a Group after deducting all of its
liabilities. Equity instruments issued by the Group are recorded at
the proceeds received net of share issue costs. Share capital
represents the amount subscribed for shares at nominal value.
The share premium account represents premiums received on the
initial issuing of the share capital. Any share issue costs
associated with the issuing of shares are deducted from share
premium, net of any related income tax benefits. Any bonus issues
are also deducted from share premium.
Retained earnings include all current and prior period results
as disclosed in the profit and loss account.
2.23. Share-based payments
Equity-settled share-based payments are measured at fair value
at the date of grant and recognised as an expense over the vesting
period. The amount recognised as an expense is adjusted for leavers
to the scheme. Fair value is measured by use of a relevant pricing
model.
2.24. Provisions
Provisions include dilapidations to cover the Group's leased
properties with an upfront liability recognised. Maintenance
provisions relate to the costs to come on developments where the
final homes have been handed over. Provisions are liabilities of
uncertain timing and amount. Provisions are recognised when the
Group has a present legal or constructive obligation as a result of
a past event and it is probable that an outflow of resources
embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation.
3. Segmental reporting
As the Group operates solely in the United Kingdom, segment
reporting by geographical region is not required.
2023 2022
Revenue GBP000 GBP000
Private residential housing 253,362 174,442
Affordable housing 53,931 64,251
Contract housing 19,681 16,494
Other 5,158 1,908
-------- --------
Total revenue 332,132 257,095
Gross profit 47,955 43,135
Administrative expenses (27,955) (20,950)
Exceptional items (720) (1,100)
Other operating income 688 396
Finance income 133 134
Finance expenses (4,812) (1,889)
Profit before tax 15,289 19,726
Taxation (3,216) (3,652)
--------- ---------
Profit for the period 12,073 16,074
========= =========
4. Taxation
2023 2022
GBP000 GBP000
Current tax
UK corporation tax on profits for the current
period 3,069 3,358
Adjustments in respect of prior periods (92) (311)
------- -------
2,977 3,047
------- -------
Deferred tax
Origination and reversal of timing differences 239 486
Adjustments in respect of prior periods - 119
239 605
------- -------
3,216 3,652
======= =======
The charge for the year can be reconciled to the standard rate
of tax as follows:
2023 2022
GBP000 GBP000
Profit before tax 15,289 19,726
======= =======
Tax at the UK corporation tax rate of 20% (2022:
19%) 3,058 3,748
Effects of:
Tax effect of expenses that are not deductible
in determining taxable profit 257 181
Adjustments in respect of prior years (92) (311)
Depreciation on assets not qualifying for tax
allowances (40) (48)
Amortisation - (26)
Deferred tax adjustments in respect of prior
years - 119
Land remediation relief (1) (1)
Income not taxable 11 -
Temporary difference not recognised 291 -
Other timing differences (3) 23
Adjust deferred tax to closing average rate (265) (33)
------- -------
Tax charge for period 3,216 3,652
======= =======
5. Exceptional items
2023 2022
GBP000 GBP000
Redundancy costs 349 141
Acquisition and other transaction-related costs(1) 371 859
Other acquisition and other transaction-related
costs(2) - 100
720 1,100
======= =======
(1) Acquisition and other transactions-related costs for the
acquisition of the housebuilding business of Mactaggart &
Mickel Group Ltd.
(2) 2022 - Other acquisition and other transactions-related
costs relate to the planning being achieved at Carlaverock, which
had previously been assessed as 95% likely.
6. Dividends
On 16 December 2022, a final dividend of 4.7p (2022: 4.5p) per
share was paid to shareholders, amounting to GBP5,568,061 (2022:
GBP4,558,486).
In respect of the current year, there was no interim dividend
paid to shareholders. In 2022, an interim dividend of 1.4p per
share was paid to shareholders, amounting to GBP1,775,716.
While recognising the importance of the dividend to
shareholders, the Board has resolved not to propose a dividend for
FY 2023 as a measure to preserve liquidity in response to market
conditions. The Group's focus is on managing cash flow and reducing
its debt to ensure that it is in the optimal position for when
market conditions improve.
7. Earnings per share
The basic earnings per share is based on the profit for the year
divided by the weighted average number of shares in issue during
the year. The weighted average number of ordinary shares for the
year ended 31 May 2023 assumes that all shares have been included
in the computation based on the weighted average number of days
since issue.
In respect of diluted earnings per share the weighted average is
calculated by adjusting for all outstanding share options that are
potentially dilutive (i.e. where the exercise price is less than
the average market price of the shares during the year).
2023 2022
GBP000 GBP000
Profit for the year attributable to owners
of the Company 12,073 16,074
Adjusted for the impact of tax adjusted
exceptional costs in the year 652 970
------------ ------------
Adjusted earnings 12,725 17,044
============ ============
Weighted average number of ordinary shares
for the purpose of basic earnings per share 118,478,254 109,022,146
Effect of dilutive potential shares: share
options 3,507,257 2,797,323
------------ ------------
Weighted average number of ordinary shares
for the purpose of diluted earnings per
share 121,985,511 111,819,469
============ ============
Earnings per ordinary share
Basic earnings on profit for the year 10.19p 14.74p
Diluted earnings on profit for the year 9.90p 14.37p
Adjusted earnings per ordinary share (1)
Basic earnings on profit for the year 10.74p 15.63p
Diluted earnings on profit for the year 10.43p 15.24p
(1) Adjusted earnings is presented as an additional performance
measure and is stated before exceptional items and is used in
adjusted EPS calculation.
8. Acquisition of the housebuilding business of Mactaggart &
Mickel Group Limited and Timber Kit factory
Revaluation Fair Value
Book Value adjustment to Group
GBP000 GBP000 GBP000
Property, plant and equipment - 220 220
Inventories 46,195 (2,312) 43,883
------------- ------------ -----------
46,195 (2,092) 44,103
============= ============ ===========
Consideration paid on acquisition
- cash 10,000
Consideration paid on first
year - land creditor 5,414
Deferred consideration 29,109
-------
44,523
Less: Goodwill (note 14) (420)
-------
Total 44,103
=======
A fair value assessment has been performed resulting in an
adjustment of (GBP2,312,150) to inventories and GBP219,710 to
property, plant and equipment. The deferred consideration has been
discounted, based on the Government Bond 5-year rate, in the
financial statements.
The housebuilding business of Mactaggart & Mickel was
purchased as it was a good opportunity to acquire a well-run
business with an excellent reputation and to accelerate growth with
live sites in new areas and with a healthy land bank pipeline. The
acquisition has contributed revenue of GBP36,350,445 and profit
before tax of GBP2,053,399 from the acquisition date of 1 June 2022
to 31 May 2023.
During the year, the Group purchased a timber kit factory for a
consideration of GBP453,000. The assets and trade are included
within Springfield Timber Kit Systems Limited.
9. Bank borrowings
2023 2022
Secured borrowings: GBP000 GBP000
Bank loans 70,673 50,486
Payable after one year 70,673 50,486
======= =======
The bank loan comprises of a revolving credit facility of
GBP87.5m with an expiry date of January 2025. The facility attracts
an interest rate of 2.15% per annum above Bank of England SONIA
(Sterling overnight index average response rate) and is secured
over certain of the Company's properties with a 31 May 2023
work-in-progress value of GBP34.0m.
Post year end, a term loan of GBP18.0m has been put in place
with a repayment date of 30 September 2024. The facility attracts
an interest rate of 2.75% per annum above Bank of England SONIA
(Sterling overnight index average response rate).
At 31 May 2023, the Group had available GBP16.5m (2022:
GBP36.5k) of undrawn committed borrowing facilities. The Group's
lender has a floating charge over the assets of the Company and of
its subsidiaries.
10. Deferred consideration
As part of the purchase agreement of Tulloch Homes Holdings
Limited, there was a further GBP13,000,000 of deferred
consideration payable. This can be broken down into: (i) GBP362,330
paid on 24 April 2022; (ii) GBP6,137,670 paid on 1 November 2022;
and (iii) GBP6,500,000 payable on 1 July 2023. The outstanding
discounted amount payable at the period end is GBP6,493,552 (2022:
GBP12,574,228), which has subsequently been paid.
As part of acquiring the housebuilding business of Mactaggart
& Mickel Group Limited, there was a further GBP30,781,108 of
deferred consideration payable. This is payable quarterly in
arrears as homes are sold starting from August 2023. There is a
minimum annual payment of GBP7,695,277. The outstanding discounted
amount payable at the period end was GBP29,623,127 (2022:
GBPnil).
2023 2022
GBP000 GBP000
Acquisition of Tulloch Homes
Holdings Limited 6,494 12,574
Acquisition of the housebuilding
business of Mactaggart & Mickel
Group Limited 29,623 -
------- -------
36,117 12,574
======= =======
2023 2022
GBP000 GBP000
Deferred consideration < 1 year 11,785 6,119
Deferred consideration > 1 year 24,332 6,455
------- -------
36,117 12,574
======= =======
11. Contingent consideration
As part of the purchase agreement of Dawn Homes Holdings Limited
there was a further GBP2,500,000 payable for an area of land if (i)
the Group makes a planning application when it reasonably believes
the council will recommend approval; or (ii) it is zoned by the
council. The Directors have assessed the likelihood of the land
being zoned and have included a liability of GBP2,000,000 based on
80% probability. The outstanding amount payable at the period end
included within liabilities is GBP2,000,000 (2022: GBP2,000,000).
The remaining GBP500,000 (20% on the GBP2,500,000 still to be paid)
has been treated as a contingent liability due to the uncertainty
over the future payment.
2023 2022
GBP000 GBP000
Acquisition of Dawn Homes Holdings Limited 2,000 2,000
2,000 2,000
======= =======
12. Provisions
Dilapidation provisions are included for all rented buildings
within the Group. An onerous lease provision has been created due
to the closure of the Walker office in Livingston. Maintenance
provisions relate to costs to come on developments where the final
homes have been handed over.
2023 2022
GBP000 GBP000
Dilapidation provision 169 150
Provisions for onerous contracts 353 -
Maintenance provision 4,072 2,496
------- -------
4,594 2,646
======= =======
The movement in the provision accounts are as follows:
Onerous
Dilapidation contracts Maintenance Total
GBP000 GBP000 GBP000 GBP000
Balance as at 1 June
2022 150 - 2,496 2,646
Additional provision 34 - 2,785 2,819
Amount utilised (15) - (1,516) (1,531)
Profit and Loss - 353 307 660
--------------- ----------- -------------- --------
Balance as at 31 May
2023 169 353 4,072 4,594
=============== =========== ============== ========
2023 2022
GBP000 GBP000
Provisions < 1 year 1,710 821
Provisions > 1 year 2,884 1,825
------- -------
4,594 2,646
======= =======
13. Share capital
The Company has one class of ordinary share which carry full
voting rights but no right to fixed income or repayment of capital.
The share capital account records the nominal value of shares
issued. The share premium account records the amount above the
nominal value received for shares sold, less share issue costs.
Ordinary shares of 0.125p Number of Share capital Share premium
- allotted, called up and shares GBP000 GBP000
fully paid
At 1 June 2022 118,469,399 148 78,744
Share issue 26,602 - -
At 31 May 2023 118,496,001 148 78,744
============ ============== ==============
During the year, 26,602 shares (2022: 677,587) were issued in
satisfaction of share options exercised for a consideration of
GBP33.
14. Transactions with related parties
Other related parties include transactions with retirement
schemes in which Directors and close family members of key
management personnel are beneficiaries. During the year, dividends
totalling GBP1,854k (2022: GBP2,343k) were paid to key management
personnel (Board of Directors and the members of the Operational
Board).
The remuneration of the key management personnel (PLC Directors
and Group Directors) of Springfield Properties PLC is set out below
in aggregate for each of the categories specified in IAS 24 -
Related Party Disclosures:
2023 2022
GBP000 GBP000
Short-term employee benefits 2,696 3,537
Share-based payments 555 404
Post-employment benefits 208 169
3,459 4,110
======== ========
During the year the Group entered into the following
transactions with related parties:
Sale of goods Purchase of
goods
2023 2022 2023 2022
GBP000 GBP000 GBP000 GBP000
Bertha Park Limited(1) 13,751 18,691 - 371
Other entities that key management
personnel have control, significant
influence or hold a material
interest in 76 83 325 45
Key management personnel 244 176 - 11
Other related parties 1 29 1,616 332
------- ------- ------- -------
14,072 18,979 1,941 759
======= ======= ======= =======
Sales to related parties represent those undertaken in the
ordinary course of business.
Rent paid
2023 2022
GBP000 GBP000
Entities that key management
personnel have control, significant
influence or hold a material
interest in 162 170
Key management personnel 3 -
Other related parties 100 107
------- -------
265 277
======= =======
2023 2022
GBP000 GBP000
Interest received:
Entities that key management
personnel have control, significant influence
or
hold a material interest in (short-term) 125 125
------- -------
125 125
======= =======
The following amounts were outstanding at the reporting end
date:
2023 2022
GBP000 GBP000
Amounts receivable:
Bertha Park Limited(1) 8,524 9,167
Other entities that key management personnel
have control, significant influence or hold
a material interest in (short-term) 5 54
Key management personnel - 39
Other related parties - 1
------- -------
8,529 9,261
======= =======
2023 2022
GBP000 GBP000
Accounts payable:
Entities that key management personnel have
control, significant influence or hold a material
interest in (short-term) 62 -
Other related parties 678 52
------- -------
740 52
======= =======
Amounts owed to/from related parties are included within
creditors and debtors respectively at the year end. No security has
been provided on any balances.
Transactions between Group companies have been eliminated on
consolidation and are not disclosed in this note.
(1) Bertha Park Limited is a Company in which Sandy Adam and
Innes Smith are Directors. During the year the Group made sales to
Bertha Park Limited of GBP13,751k (2022: GBP18,226k) in relation to
a build contract. At the year end, GBP3,399k (2022: GBP3,983k) is
included in trade debtors and included within other debtors is a
loan of GBP5,125k (2022: GBP5,125k). During the year, the Group had
purchases from Bertha Park Limited of GBPnil (2022: GBP371k) in
relation to a build contract.
15. Analysis of net debt
An analysis of net debt is as follows:
2023 2022
GBP000 GBP000
Cash in hand and bank 8,909 16,390
Bank borrowings (70,673) (50,486)
---------- ---------
(61,764) (34,096)
Lease liability (5,900) (3,954)
---------- ---------
Net debt (67,664) (38,050)
Deferred consideration (36,117) (12,574)
---------- ---------
(103,781) (50,624)
========== =========
Reconciliation of net cashflow to movement in net debt is as
follows:
At 1 On acquisition Fair At 31
June 2022 New leases Cashflow value May 2023
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Cash and cash
equivalents 16,390 - - (7,481) - 8,909
Bank borrowings (50,486) - - (20,187) - (70,673)
Lease (3,954) (3,694) - 2,147 (399) (5,900)
----------- ----------- --------------- --------- ------- ----------
Net debt (38,050) (3,694) - (25,521) (399) (67,664)
Deferred consideration (12,574) - (30,781) 6,137 1,101 (36,117)
----------- ----------- --------------- --------- ------- ----------
(50,624) (3,694) (30,781) (19,384) 702 (103,781)
=========== =========== =============== ========= ======= ==========
At 1 On acquisition Fair At 31
June 2021 New leases Cashflow value May 2022
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Cash and cash
equivalents 15,826 - 23,485 (22,921) - 16,390
Bank borrowings (34,000) - - (16,486) - (50,486)
Lease (2,613) (2,396) (301) 1,437 (81) (3,954)
----------- ----------- --------------- --------- ------- ----------
Net (debt)/cash (20,787) (2,396) 23,184 (37,970) (81) (38,050)
Deferred consideration (2,107) - (13,000) 2,362 171 (12,574)
(22,894) (2,396) 10,184 (35,608) 90 (50,624)
=========== =========== =============== ========= ======= ==========
16. Subsequent events
Post year end, a term loan of GBP18.0m has been put in place and
the Company's overdraft facility was extended by a period of 12
months, with repayment and expiry date respectively of 30 September
2024. The term loan facility attracts an interest rate of 2.75% per
annum above Bank of England SONIA (Sterling overnight index average
response rate). The overdraft facility attracts an interest rate of
3.0% per annum above Bank of England base rate.
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END
FR FLFVLASIIFIV
(END) Dow Jones Newswires
September 20, 2023 07:37 ET (11:37 GMT)
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