Springfield springs nothing unpleasant on its Aim followers

Comment Martin Flanagan

No shocks is the cardinal rule in the period after a firm’s flotation. And Springfield Properties, the Scottish housebuilder that floated on the London Stock Exchange’s Alternative Investment Market (Aim) in October has done just that.

In its first trading update since the float (undertaken to help bankroll ambitious growth plans), the company has provided reassurance that its private and affordable and social housing divisions have seen steady progress.

Just as in the wider UK, there is demand for housing here, and Springfield’s added advantage is that its affordable housing arm provides it with some insulation against the ups and downs of the cyclical residential property industry.

The company said yesterday that it expects to report revenues for the first half of 2017-18 in line with management’s expectations and declare an interim dividend for the period. Again, what its new shareholders would like to hear.

Specifically, Springfield continued to advance the development of five new villages that it is building over the next 15 to 20 years from outside Edinburgh to Elgin and Perth, with retail facilities, amenities and schools attached.

That work was a cornerstone of its pitch to Aim investors back in the autumn, and its initial stages look to be progressing smoothly. Progress in Springfield’s affordable and social housing arm also showed that the business, whose turnover exceeded £100 million for the first time this year, is not forgetting the bread-and-butter while pursuing its ambitious “villages” strategy.

Holyrood recently recognised the group’s achievement of building 70,000 affordable homes in Scotland in the past ten years. In these times of austerity it is an achievement of which to be proud, mixing social responsibility with commercial acumen.

At the time of the public listing, Springfield’s executive chairman and grandson of the founder, Sandy Adam, told me the flotation was meant to help with his ambition to double the size of the business every five years.

It is a challenging target, but the company certainly seems on track as of now. Current performance, financial strength (it raised about £25m in the float) and strategic vision all look sound.