In the spring a housebuilder’s thoughts turn to acquisitions

Comment Martin Flanagan

Springfield Properties has not hung about in utilising its stock market listing last autumn to help the Scottish housebuilder – both private and affordable – fund its impressive growth trajectory.

The group announced the £20 million acquisition of Glasgow-based Dawn Homes yesterday, about £2m to be paid through the issue of new shares, while it is to raise £15m towards the cost of the deal through a placing of 12.5 million new shares with existing and new shareholders.

The rationale for the acquisition looks sound: to take Springfield into geographical areas where it is currently under-represented – Glasgow and west central Scotland and Ayrshire.

It provides it with a ready-made supply chain in Glasgow with access to local labour and contractors. But, talking to Springfield’s executive chairman Sandy Adam, you sense the alternative form of finance that a public quote gives a business is seen as a boon for growth. Bedding down Dawn Homes in the company is the priority, but Adam makes clear that if other acquisition prospects arise, Springfield will not be slow out of the blocks. Chinese retailer behind Hamleys, to pump new funds into HOF and take a controlling 51 per cent stake in the group, with current owner, Sanpower’s Nanjing Cenbest subsidiary, retaining a minority stake.

Everything is getting a bit complicated and definitely Chinese for HOF, which also owns Edinburgh retailing landmark, Jenners. But HOF will be hoping that the mixture of C.banner injecting new money and momentum into it, while being thrown a lifeline by its landlords, will be enough to right a ship that has been buffeted by tough trading for several years.

It is a high street cliche now, but HOF has been particularly hit by the growth of online shopping.