Scots housebuilder seeks AIM float to fund villages plan

● Springfield Properties has doubled in size every five years and employs 500

fast-growing private Scottish housebuilder is to float on AIM, the junior London market, with an estimated value of between £55 million and £65m to raise funds for the construction of five new “village” housing developments.

Moray-based Springfield Properties, whose new villages will be in north and central Scotland, wants to raise up to £25m via the flotation for the 15 to 20 year project.

The group, whose revenues are split 80 per cent from private housing and 20 per cent in affordable housing, was founded by Wilfred Adam – grandfather of the current executive chairman, Sandy Adam – as an Elgin based market garden business in 1956.

Sandy Adam took over the running of the “dormant” firm in 1988, focusing it on private housing, and so far has constructed more than 4,000 homes in Scotland. Adam said: “Springfield strategies achieve our aim of steady growth, doubling the company in size every five years. Our turnover exceeded £100m for the first time this year and now we employ about 500 people.

“This initial public offering is the next step in our growth. Raising these funds is part of our strategy to secure ongoing growth at the same rate.”

Springfield Properties said over the past four years it had secured land or entered into other arrangements relating to the development of the five villages, which will incorporate 10,000 homes overall on completion. The sites have a gross development value of £1.5 billion.

The villages, based near Edinburgh, Stirling, Dundee, Elgin and Perth, will also have retail facilities, amenities, and local schools.

Innes Smith, Springfield’s chief executive, said: “We are creating places. It’s not just an estate at the side of a town. Its somewhere customers will want to live.”

Thecompanysaidtherationale for the listing and funda raising was that the development of the housing villages was expected to “involve significant net cash outflows” in relation to land purchases and infrastructure of between £8m to £12m per site.

It is understood existing management will retain a majority holding of between 69 per cent and 73 per cent after the float on AIM, giving a free float of 27 to 31 per cent.

Adam said he believed a key strength of Springfield was “a track record of profitability throughout the Scottish housing market cycle”, and some insulation from the performance of the economy through its affordable housing division.

He said: “The Scottish government wants to build 50,000 affordable houses in this parliament. That is a great opportunity for us.”

The five housing villages will have variable components of private and affordable housing, he added.

Adam said that other benefits of a listing were that “it means we can incentivise staff and it may make it easier to do future deals in a different way”.