Company Registration No. SC031286 (Scotland)
SPRINGFIELD PROPERTIES PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
2
CONTENTS
Page
Company Information
3
Strategic Report
Financial Highlights
4
Executive Chairman’s Statement
5
Chief Executive’s Statement
8
Chief Financial Officer’s Review
12
Company Overview and Risks
14
Climate Related Financial Disclosure
17
Corporate Governance
Board of Directors
37
QCA Code Compliance
39
Section 172 Statement
43
Audit Committee Report
45
Remuneration Committee Report
48
Directors’ Report
56
Streamlined Energy and Carbon Reporting
59
Statement of Directors’ Responsibilities
61
Independent Auditor’s Report
62
Financial Statements
Consolidated Profit and Loss Account
72
Consolidated Balance Sheet
73
Consolidated Statement of Changes in Equity
74
Consolidated Statement of Cash Flows
75
Notes to the Consolidated Financial Statements
76
Company Balance Sheet
107
Company Statement of Changes in Equity
108
Company Statement of Cash Flows
109
Notes to the Company Financial Statements
110
3
COMPANY INFORMATION
DIRECTORS:
Mr Sandy Adam
Mr Innes Smith
Mr Iain Logan
Mr Matthew Benson (non-executive)
Mr Nick Cooper (non-executive)
Mr Colin Rae (non-executive)
SECRETARY:
Mr Andrew Todd
REGISTERED OFFICE:
Alexander Fleming House
8 Southfield Drive
Elgin
Morayshire
IV30 6GR
COMPANY REGISTRATION NUMBER:
SC031286 (Scotland)
INDEPENDENT AUDITOR:
BDO LLP
City Point
65 Haymarket Terrace
Edinburgh
EH12 5HD
NOMINATED ADVISER AND BROKER
Singer Capital Markets Securities Limited
1 Bartholomew Lane
London
EC2N 2AX
SOLICITORS:
Pinsent Masons LLP
141 Bothwell Street
Glasgow
G2 7EQ
Kerr Stirling LLP
10 Albert Place
Stirling
FK8 2QL
SPRINGFIELD PROPERTIES PLC
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STRATEGIC REPORT
The Directors present their strategic report for Springfield Properties Plc (the “Company”) and its Group of
companies (“Springfield”, “The Springfield Group” or the “Group”) for the year ended 31 May 2024.
FINANCIAL HIGHLIGHTS
FOR THE YEAR ENDED 31 MAY 2024
Group
Revenue
2024:
£266.5m
2023: £332.1m
Group
Completions
2024:
878 homes
2023: 1,301
Group
Adjusted
PBT*
2024:
£10.6m
2023: £16.0m
Private
Homes
Revenue
2024:
£184.7m
2023: £253.4m
Affordable
Homes
Revenue
2024:
£47.0m
2023: £53.9m
Contracting
Homes
Revenue
2024:
£5.0m
2023: £19.7m
Group
2023/24
£m
2022/23
£m
Change
%
Revenue
266.5
332.1
-19.8%
Gross profit
43.4
48.0
-9.6%
Gross margin
16.3%
14.4%
+190bps
Statutory profit before tax
9.7
15.3
-36.7%
Adjusted profit before tax*
10.6
16.0
-33.8%
Earnings per share
6.36p
10.19p
-37.6%
Net debt**
45.4
67.7
-32.9%
*Adjusted profit before tax excludes exceptional items detailed at Note 10.
**Net debt is defined as bank borrowings plus long-term obligations under lease liabilities plus short term
obligations under lease liabilities less cash and cash equivalents.
Strategic and Operational Highlights
•
Significant reduction in bank debt to £39.9m (bank borrowings of £54.8m less cash of £14.9m)
ahead of original target of £55m
•
Profitable land sales secured without impact on near-term development pipeline
•
Recommenced engaging with affordable housing providers and signing contracts in the year
•
Total owned land bank of 5,593 plots (2023: 6,712 plots), 88% (2023: 83%) with planning
permission, and strategic options over a further 3,147 acres (2023: 3,255 acres) representing
31,471 plots (2023: 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 and profit generation
SPRINGFIELD PROPERTIES PLC
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STRATEGIC REPORT
EXECUTIVE CHAIRMAN’S STATEMENT
FOR THE YEAR ENDED 31 MAY 2024
Delivering Results
I am delighted to report that we achieved our goals for the year. We were clear that our priority for the 2024
financial year was to reduce our bank debt, and I am very pleased to share that our position as at year end
significantly exceeded the target set. We completed 878 homes and the quality of the homes we deliver
remains exceptionally high, resulting in 96% customer satisfaction.
We managed to secure profitable land sales from our large land bank. The deal secured with Barratt
Developments Plc for our Durieshill site was a significant highlight to the financial year. With planning in place
for 3,000 private and affordable homes alongside new schools, local shops and other business opportunities,
community woodlands and greenspace, Durieshill involves the creation of a new standalone sustainable
village near Stirling, within commuting distance of Edinburgh and Glasgow. We received £10m during the
year for the sale to Barratt Developments Plc of 34 acres of land at the site, realising value from our
substantial land holding. Going forward, the provision of site infrastructure by Barratt Developments Plc will
significantly accelerate the development of the site, whilst eliminating our requirement to tie up capital.
With the delivery of affordable homes for those in need a key part of our business ethos, we were delighted
to recommence actively engaging with affordable housing providers and signing contracts in the year. We
have over two decades’ experience of affordable housing delivery working with partners across the country,
and we are extremely proud of the impact we have had in transforming communities and providing homes to
families most in need. With a reduction in inflation and an increase in the Scottish Government affordable
housing investment benchmarks in the year, we have been pleased to sign contracts totalling over £50m
since 31 May 2023.
As a result of these factors, we are pleased to deliver annual revenue of £266.5m.
Markets
The requirement for new housing in Scotland is at an all-time high and drops in housing supply across the
industry further compound housing needs. The Scottish Government declared a national housing emergency
in May 2024. This has created impetus for the Government to address barriers to new housing delivery,
including a review of PRS rent regulation. The scale of unmet demand continues to underpin the
fundamentals of the business, allowing a return to growth as confidence in the private housing market
increases.
In private housing, while the subdued market has resulted in lower completions, aspirations for the type of
homes that we offer remain high. Across each of our brands we build quality, spacious, energy efficient
homes in highly desirable areas with generous private gardens and plenty of surrounding greenspace.
Mortgage lenders remain supportive of the housebuilding industry and are keen to lend to buyers of energy
efficient new build homes. The Bank of England reduced its base rate in August and, with further stability,
we expect to see an increase in homebuyers’ confidence. Affordability is good in Scotland compared with
the UK as a whole meaning home ownership is within reach of many households. The Scottish missive
system continues to give us confidence in our sales, with our customers contracted into the purchase earlier
in the build programme than in other parts of the UK.
While our completions are down and there continue to be some challenges, looking ahead some significant,
strategic opportunities are emerging for Springfield. This includes the Inverness and Cromarty Firth Green
Freeport where a pipeline of renewable energy projects is placing the Highlands and Moray at the heart of
the drive towards net-zero, creating 10,000 jobs locally. It also includes substantial investment from Scottish
and Southern Energy Networks (SSEN) for the creation of a new powerline to carry renewable energy from
Peterhead to Beauly. This project alone will require up to 6,000 workers over the initial five-year build period
and we are exploring with key stakeholders how this demand can be met while satisfying SSEN’s desire to
leave a lasting legacy for the local communities. With land holdings across the North of Scotland, we are
uniquely well-placed to assist and help realise the potential for economic stimulus to these regions.
SPRINGFIELD PROPERTIES PLC
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STRATEGIC REPORT
EXECUTIVE CHAIRMAN’S STATEMENT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
With housing receiving political focus across the UK, we have been pleased to see an urgency in response
from public and private sectors and an appetite for collaboration, to provide more homes across tenures
and meet the Scottish Government’s long-standing commitment to deliver 110,000 affordable homes by
2032. As a member of the Scottish Government’s Housing Investment Task Force established in April 2024,
we are working closely with the Housing Minister and key stakeholders from housing and finance to identify
ways of attracting additional investment into housing, including the unlocking of PRS investment in Scotland.
We are glad to see realisation from the Scottish Government that there needs to be significant outside
investment in housing. While the newly published Scottish Government Programme for Government
reinforced their commitment to introduce a rent cap, it also makes clear that there will be amendments to the
Housing Bill aimed at unlocking investment in build to rent.
Environment
We have been using off-site construction for over 35 years and air-source technology for over 20 years,
which puts us ahead of the curve in the delivery of energy efficient homes and in our approach to operations.
We are motivated by sustainable advancements that benefit our customers and, as such, have had a head
start across the industry in areas including off-site construction, air-source technology and electric car
charging. We are immensely proud of the sustainable communities that we are creating across Scotland,
and this will always be a core focus for us.
People
We have over 600 employees working across our offices, sales centres, kit factories and out on our sites.
We are an inclusive employer and are proud to create an environment where everyone can thrive. Our
investment in training and development exceeds industry norms. This has resulted in 28 (2023: 48)
promotions during 2024. Creating opportunities for young people is important to us, including investment in
craft apprenticeships to support future construction skills, with 73 apprentices training with us during the year.
We offer a great package of benefits and the extension of private healthcare cover to all employees across
the Group has made a significant difference to the lives of those who have needed it. The mental health and
wellbeing of our employees remains a priority, with the training of 33 mental health first aiders and increased
use of our intranet to signpost support and engage regularly with employees across the business. Each year
we strive to improve and set objectives within our ESG strategy that will further benefit our people and our
ESG strategy update, published alongside these results, includes information on the progress we have made.
Against the backdrop of a subdued housing market, it is important to acknowledge that resourcing decisions
have had to be made to reflect the decrease in our housebuilding activity. While this has been tough for the
people involved, the rationalisation has resulted in a leaner organisation, with a structure working across our
brands that is well-placed to respond to the future needs of the Group. I would like to thank all of our
employees, past and present, for their hard work and commitment this year.
Dividend
With our success in significantly reducing our debt position during the year, combined with our confidence in
the future and excitement about the significant opportunities emerging, we are very pleased to now be
resuming dividend payments – which is earlier than originally anticipated. For the year to 31 May 2024, we
propose a dividend of 1p per ordinary share.
Looking to the future
Our actions to reduce our bank debt and overheads have put us in a position of strength going forward. The
profitable land sales achieved during the year demonstrate the value that can be realised from our land bank.
Housing demand in Scotland had been dampened by higher interest rates and this has led to lower
completions. However, the fundamentals of the housing market in Scotland remain very strong. The
undersupply of housing across all tenures has intensified and Scotland now faces a housing emergency that
must be addressed. Our return to the affordable housing market across the country will play a key part in
this.
SPRINGFIELD PROPERTIES PLC
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STRATEGIC REPORT
EXECUTIVE CHAIRMAN’S STATEMENT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Fantastic opportunities for our business are beginning to, once again, present themselves, particularly in the
North where we have a large land bank and are in a unique position to deliver against the unprecedented
demand. In addition, we have seen buyer confidence increase and the reservations received over the
summer give us reasons to be optimistic.
With all this in mind, I am confident in our ability to generate shareholder value in the years to come.
The final words are to show appreciation and give thanks to everyone who continues to play a role in
Springfield’s journey - our customers, our Board members, our management team, our employees, our
subcontractors, our suppliers and our shareholders.
Sandy Adam
Executive Chairman
16 September 2024
SPRINGFIELD PROPERTIES PLC
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STRATEGIC REPORT
CHIEF EXECUTIVE’S STATEMENT
FOR THE YEAR ENDED 31 MAY 2024
I am very pleased to present this annual report, demonstrating our achievement of the objectives we set.
This time last year, in response to the challenging market conditions, we adopted a strategy focusing on
maximising cash generation in order to reduce our debt. We acted decisively to reduce costs and manage
working capital across the business, and we actively pursued profitable land sales to accelerate cash
realisation from our large land bank. We delivered on our objective – with our actions enabling a significant
reduction in net bank debt to £39.9m as at 31 May 2024 (2023: £61.8m), well ahead of the £55m target that
we set in September 2023. We are now in a strong position to deliver future growth as more favourable
economic and trading conditions return. In addition, we are pleased to be able to return to making dividend
payments earlier than initially anticipated, declaring a dividend of 1p per share for the year.
During 2024, total revenue was £266.5m (2023: £332.1m), and we completed 878 homes (2023: 1,301). This
reflects the challenging market conditions experienced across the industry, resulting in us entering the year
with a lower forward orderbook than the previous year; subdued homebuyer confidence; and reduced
affordable housing activity reflecting our decision in FY 2023 to pause entering new affordable-only contracts
until the economics became more attractive. Gross margin was 16.3% (2023: 14.4%), which primarily reflects
an improvement in affordable margins and the profitable land sales. Profit before tax and exceptional items
was £10.6m (2023: £16.0m).
Despite the challenging macro factors, there are indicators for optimism. Many of the key elements that
underpin homebuyer confidence are set to strengthen, including a new UK Government, decreasing inflation
and the first Bank of England interest rate reduction in over four years.
Alongside this, the fundamentals of our business and of the housing market in Scotland remain strong. The
undersupply of housing, which is across all tenures, is intensifying. We offer high quality, energy efficient
homes in popular locations across the country under multiple well established, reputable brands. We have an
excellent track record of delivering developments exclusively dedicated to affordable housing and an
established network of Housing Association and Local Authority partners throughout Scotland. We have one
of the largest owned land banks in Scotland, with a high proportion of sites having planning already in place.
This includes significant holdings in the North of the country where we are set to benefit from the expected
sharp increase in housing demand to support the delivery of the Inverness and Cromarty Firth Green Freeport
and substantial upgrades to the power network. With a strengthened balance sheet, we will be able to
accelerate site development as market conditions continue to improve and we are well-placed to satisfy the
pent-up demand for high-quality, energy efficient housing in desirable locations across the country.
Land Bank
As noted, a key element of our strategy to reduce net bank debt was the active pursuit of profitable land
sales. During the year, we completed land sales of £28.1m, generating profit of £6.2m. These sites were not
part of our near-term development pipeline and therefore increase monetisation of our land bank. We also
significantly reduced land buying activity. Our high-quality land bank has mostly been secured off market
without planning, resulting in a very low average cost per plot that enables us to maximise the long-term
value of our sites.
We continue to have one of the largest land banks in Scotland, in key locations across the country. This
includes across the North of Scotland where we are set to benefit from the expected sharp increase in
housing demand to support the delivery of UK Government-financed renewable infrastructure projects.
The Inverness and Cromarty Firth Green Freeport is expected to have a transformational impact on the North
of Scotland over the coming years with the creation of more than 10,000 new jobs in the area and receive
over £3bn of fresh investment. We are already seeing investment being made into ports across the region
and, for initiatives to reach their full potential, new housing will be an essential part of the supporting
infrastructure. In addition, from 2026, Scottish & Southern Energy Networks (SSEN) is significantly upgrading
the Scottish national power network with the creation of a new powerline. It is estimated that up to 6,000
workers will be required over the initial five-year build programme and SSEN has made a commitment to
contribute to the development of thousands of homes across the North of Scotland, to deliver a lasting legacy
for future generations. Springfield has worked across the North of Scotland for decades and we are
passionate about growth and development for the region. With our significant land holdings in the area, we
are uniquely placed to help deliver this opportunity and build the new homes required.
SPRINGFIELD PROPERTIES PLC
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STRATEGIC REPORT
CHIEF EXECUTIVE’S STATEMENT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
At 31 May 2024, we had 5,593 owned plots (31 May 2023: 6,712), of which 88% had planning permission
(2023: 83%), equating to six years of activity. In addition, our strategic land bank consisted of 3,147 acres
(2023: 3,255 acres), equating to 31,471 plots, providing over 30 years of activity. Within the strategic land
bank, we had options over 24,605 plots and 6,866 plots were contracted, of which 57% already have
planning.
The gross development value of the owned land bank at 31 May 2024 was £1.5bn (2023: £1.8bn).
At year end, we were active on 42 developments (2023: 50) and during the year 25 developments were
completed and 17 new developments became active.
Private Housing
The number of private home completions was 584 for the year (2023: 866), reflecting the impact of market
conditions. In line with industry trends, reduced homebuyer confidence resulted in us entering the financial
year with a lower forward order book than at the same point of the prior year, with demand remaining subdued
through the first half. We experienced some recovery in private housing demand from January 2024, and
continued to experience a steady level of reservations through to year end. While it remains early days, we
have also experienced an improvement in private housing since year end. In particular, there was a significant
increase in reservation rates during the traditionally quieter school summer holiday period compared with the
same period last year.
In response to the challenging market backdrop, and as previously stated, in September 2023 we decided
to significantly curtail our speculative development activities and only build homes when a reservation was
secured. This was largely maintained through the end of the financial year when we began to undertake soft
launches to test the market ahead of building.
The average selling price (“ASP”) for private housing during the year increased to £316k (2023: £293k),
reflecting changes in the housing mix and with selling prices being upheld across the Group’s brands.
As at 31 May 2024, we were active on 29 private housing developments (2023: 32), with seven active
developments added during the year and 10 developments completed. In total, as at 31 May 2024, the owned
private housing land bank consisted of 3,837 plots (2023: 5,075 plots), of which 87% had planning permission
(2023: 86%).
Village Developments
Springfield Villages are large, standalone developments that include up to 3,000 homes across tenures,
infrastructure and neighbourhood amenities, and with ample greenspace. At Bertha Park and Elgin South,
new phases of homes were released for sale during the year. 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.
A key milestone was the signing of a strategic collaboration agreement with Barratt Developments Plc for the
development of our Durieshill site, to create a new village, spanning almost 600 acres, near Stirling. The
development has the planning in place – with the section 75 agreement being received earlier in the year –
for 3,000 private and affordable homes alongside new schools, local shops and other business opportunities,
community woodlands and greenspace. We completed a land sale to Barratt Developments Plc during the
year for an initial 34 acres of land at the site for £10m, realising value from our substantial and high-quality
land holding. Separately, over the coming years, Barratt Developments Plc will receive land at the site in
exchange for providing and funding the major infrastructure development for the entire Durieshill site. This
agreement will accelerate the development of the site while eliminating the need to tie up capital over a multi-
year period. We are looking forward to working alongside Barratt Developments Plc, a five star housebuilder
with an excellent reputation, in delivering Durieshill.
SPRINGFIELD PROPERTIES PLC
10
STRATEGIC REPORT
CHIEF EXECUTIVE’S STATEMENT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Affordable Housing
During the year, we recommenced actively engaging with affordable housing providers. This followed the
Scottish Government increasing the affordable housing investment benchmarks and a reduction in levels of
cost price inflation of both labour and materials, which enabled housing associations to increase the price of
affordable housing contracts. Affordable housing offers high revenue visibility with low capital exposure and
strong cash flow dynamics. We were encouraged by the demand we received during the year, signing
affordable housing contracts totalling over £50m for delivery during FY 2024 and beyond. We are focusing
on securing shorter-term contracts, typically for 12-18 months, which provides a greater degree of cost
certainty than with large, multi-year contracts.
We completed 270 affordable homes during the year (2023: 328). This reduction reflects our decision in the
previous year to pause entering new affordable-only contracts until the economics became more attractive
in the inflationary environment. Average selling price was £174k (2023: £164k) with new contracts reflecting
the uplift in the Scottish Government grant available per home. The number of active affordable housing
developments was 10 at 31 May 2024 (2023: 15), with 10 active developments added during the year and
15 developments completed. This included completing two large, legacy contracts that had been impacting
margin due to the high cost price inflation that had occurred since the contracts were signed. As at 31 May
2024, the total owned affordable housing land bank consisted of 1,756 plots (2023: 1,637), of which 89% had
planning permission (2023: 79%).
Contract Housing
In contract housing, we provide development services to third party private organisations and receive
revenue based on costs incurred plus fixed mark up. To date, this has largely consisted of services provided
to Bertha Park Limited.
At 31 May 2024, the contract housing land bank with planning consent consisted of 579 plots (2023: 603).
The 24 homes completed during the year (2023: 107) comprised 10 private homes, 13 affordable homes and
one private rented sector (“PRS”) home at Bertha Park. The reduction reflects no new phases of private
housing being released until the end of the year and the contribution to 2023 of delivery under our PRS
contract. As previously noted, our strategy to expand PRS activity was put on hold following the introduction
of rent control by the Scottish Government in FY 2023. While the national rent cap has since been lifted, the
publication of a Housing Bill proposing the potential for local rent setting has meant that PRS investors are
not committing to projects in Scotland.
Customer Satisfaction
With a determination to increase customer satisfaction year on year towards an aspirational target of 100%,
we were delighted this year to achieve 96% (2023: 94%). We are proud to offer customers a high level of
specification as standard, significant choice and excellent customer service through all stages of the house
buying journey. During the year, we were also successfully re-certified for ISO 9001 (Quality Management).
With a years’ experience delivering homes under the New Homes Quality Board Code of Practice, we have
seen value in the new processes introduced, particularly in managing final touches with homes now
completed at least two weeks prior to customers moving in. Our Customer Feedback Group was also
strengthened with its remit expanded to include reviewing industry findings from the Ombudsman Service in
addition to our own customer feedback to inform further operational and service level improvements.
Build Quality and Efficiencies
Following a review of the house types offered across our brands, we streamlined our portfolio down to the
most popular homes that are most efficient to build and capable of accommodating future building standards
to maximise energy efficiency. The entire new range can be built efficiently from timber kits at our own
factories and maximises the use of modern methods of construction on site. The greater build efficiency will
mitigate the cost increases associated with new regulation. For all new planning applications, homes for each
brand are now selected from a portfolio of 40 house types ranging from 700sq.ft to 2,500sq.ft offering two
bed to five bed homes. Architecturally, the new portfolio has protected the quality, space and character
SPRINGFIELD PROPERTIES PLC
11
STRATEGIC REPORT
CHIEF EXECUTIVE’S STATEMENT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
in house design, which differentiates us from other volume housebuilders. This includes a mix of elevations
for the interesting streetscapes that Springfield is renowned for. The consistent build approaches will enable
us to increase the quality of our housing delivery.
Environment and People – ESG
We build highly energy efficient homes within communities designed for residents to live sustainably. We
utilise modern methods of construction to build the timber-kits for our homes off-site in two regional factories.
At Springfield, we have led the way in the delivery of developments utilising air source technology and, during
the year, almost half of the homes we delivered were without gas.
Our industry-leading levels of investment in training and development continued during the year, and we
have trained one apprentice for every 15 homes we built - with 22% of our site workers being apprentices.
In addition, 6% of our office staff undertook formal qualifications during the year. Wellbeing continues to be
a focus and we are proud to have seen how our employees have benefited from all of having private
healthcare available.
This year we have driven forward a number of strategic projects that can add meaningful value to our
people – our employees, our customers and the communities in which we build – and the environment, with
changes to our operations reducing carbon, preventing waste or protecting habitats. This progress has been
captured in our annual ESG Strategy Update, which has been published on our website alongside this report.
Outlook
We entered the new financial year in a better position than at the same point in the previous year – with a
stronger balance sheet, an improving private market backdrop and a larger contracted order book in
affordable housing. Since year end, we have experienced an increase in private housing reservation rate,
with the reservation rate from 1 June 2024 to date being ahead of the same period last year.
With the sustained improvement in market conditions and homebuyer confidence, as described above, we
are on track to deliver revenue for private housing for FY 2025 in line with market expectations. In affordable
housing, a significant proportion of our forecast revenue for FY 2025 is already contracted and the balance
is under negotiation. Accordingly, the Board continues to expect to achieve strong year-on-year growth in
affordable housing revenue as well as a significant improvement in affordable housing gross margin. In
addition, build cost inflation is expected to be broadly flat for FY 2025. As a result, we are on track to report
results for the year to 31 May 2025 in line with market expectations, with total revenue remaining level with
FY 2024 and growth in profitability.
Looking further ahead, the fundamentals of the business and of the housing market in Scotland remain
strong. The undersupply of housing, which is across all tenures, is intensifying. We offer high quality, energy
efficient homes in popular locations across the country under multiple well established, reputable brands. We
have one of the largest owned land banks in Scotland, 88% of which has planning permission. This includes
significant land holdings in the North of Scotland, a region that will require thousands of new homes in the
coming years to support the planned development of green infrastructure. In addition, we are hopeful of a
change in the policy environment regarding rent cap barriers, which would encourage PRS providers to
resume activity in Scotland. We are well positioned to benefit from any return of PRS housing development,
which would represent an upside to forecasts, having successfully delivered the first houses built specifically
for private rent in Scotland.
Accordingly, the Board remains confident in the Springfield Group’s prospects and in our ability to generate
shareholder value.
Innes Smith
Chief Executive Officer
16 September 2024
SPRINGFIELD PROPERTIES PLC
12
STRATEGIC REPORT
CHIEF FINANCIAL OFFICER’S REVIEW
FOR THE YEAR ENDED 31 MAY 2024
Trading for the year ended 31 May 2024 reflected the challenging market conditions – although we are
pleased to note that our results are ahead of our original expectations both in profit terms and closing net
bank debt. To mitigate the impacts of the downturn and ensure we are in a stronger position for when more
normalised conditions return, we took decisive actions to carefully manage working capital, maximise cash
generation and reduce our debt. A key element of this was actively pursuing profitable land sales. This,
alongside sustained focus on cost control, enabled us to exceed our original target of reducing net bank debt
to £55m by year end by c. £15m, which is a great achievement.
In summary, for the year ended 31 May 2024, revenue was £266.5m (2023: £332.1m), adjusted profit before
tax and exceptional items was £10.6m (2023: £16.0m) and statutory profit before tax was £9.7m (2023:
£15.3m). Net bank debt at 31 May 2024 was reduced significantly to £39.9m compared with £61.8m at 31
May 2023.
The lower revenue reflects the challenging market conditions that have been experienced across the
industry, with subdued homebuyer confidence and reduced activity in affordable housing.
Private housing remained the largest contributor to Group revenue, accounting for 69.3% of total sales (2023:
76.3%), with a revenue of £184.7m (2023: £253.4m). This was primarily due to the reduced homebuyer
confidence that was experienced across the industry resulting in the Group entering the financial year with a
lower orderbook than in the previous year. Affordable housing revenue was £47.0m (2023: £53.9m),
accounting for 17.6% of total sales (2023: 16.2%), with the lower revenue reflecting our decision in the
previous year to pause entering new affordable-only contracts until the economics became more attractive
in the inflationary environment. In contract housing, which accounted for 1.9% of total sales (2023: 5.9%),
revenue was lower as no new phases of private housing were released at Bertha Park until the end of the
year and because of the contribution to 2023 from revenue generated through delivery under our PRS
contract.
As previously noted, a key part of our strategy during the year was to reduce our debt position through
profitable sales of land at sites that do not impact our near-term development pipeline. Accordingly, there
was a substantial increase in revenue generated from land sales to £28.1m (2023: £3.7m), which generated
a profit of £6.2m.
Gross profit for the year was £43.4m (2023: £48.0m) due to the lower revenue. Gross
margin for the Group was 16.3% (2023: 14.4%), which primarily reflects the contribution from profitable land
sales. Gross margin in private housing was broadly maintained while there was an improvement in affordable
housing gross margin reflecting the lesser impact of the legacy contracts that had impacted the prior year.
Administrative expenses, excluding exceptional items, were £26.5m (2023: £28.0m). This reflects the
sustained focus on generating cost savings and rationalisation across the Group.
Finance costs were £7.5m (2023: £4.8m), which represents higher bank interest payments due to the
increase in interest rates and the increase in average bank debt over the period to fund the final deferred
payment for the acquisition of Tulloch Homes as well as the first deferred payments for the Mactaggart &
Mickel Homes acquisition.
Exceptional items were £0.9m (2023: £0.7m), which mainly relates to restructuring costs involved with
reducing the ongoing cost base of the Group.
Revenue
2024
£’000
2023
£’000
Change
Private housing
184,734
253,362
(27.1)%
Affordable housing
46,975
53,931
(12.9)%
Contract housing
4,995
19,681
(74.6%)
Land sales
28,055
3,676
663.2%
Other
1,768
1,482
19.3%
TOTAL
266,527
332,132
(19.8%)
SPRINGFIELD PROPERTIES PLC
13
STRATEGIC REPORT
CHIEF FINANCIAL OFFICER’S REVIEW (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Operating profit was £17.0m (2023: £20.0m). Excluding exceptional items, operating profit was £17.9m
(2023: £20.7m). Statutory profit before tax was £9.7m (2023: £15.3m) and adjusted profit before tax and
exceptional items was £10.6m (2023: £16.0m).
Basic earnings per share (excluding exceptional items) were 7.05 pence (2023: 10.74 pence). Statutory basic
earnings per share were 6.36 pence (2023: 10.19 pence). Return on capital employed was 8.0% (2023:
8.8%), which primarily reflects the lower profit.
Net bank debt at 31 May 2024 was significantly reduced to £39.9m (31 May 2023: £61.8m), reflecting our
sustained focus on reducing our debt position as described above. Net bank debt to EBITDA ratio was 2.0
(2023: 2.8).
A term loan of £18.0m that had a repayment date in September 2024 was paid in full in May 2024. Our
revolving credit facility of £87.5m that was initially due to expire in January 2025 has, post year end, been
extended for a further 12 months to January 2026 and a £7.5m overdraft facility has also been put in place
for 12 months until September 2025, continuing to provide working capital facilities for the Group.
In order to support the going concern period to 30 September 2025, the Board-approved budget to May 2025,
with a further year added to May 2026, forms the basis of the detail and assessment to confirm the
appropriateness of the going concern basis being adopted for the preparation of the 31 May 2024 financial
statements.
In addition to the Board budget two sensitivity scenarios have been prepared reducing private home plots by
c.10% and c.15% in the year to May 2025 from the original Board-approved budget. Under the 15% reduction
scenario, the peak borrowing utilises 81% of the banking facilities. Under this scenario there are a number
of mitigating actions that are within the control of the Group and could be pursued if required.
Under all three scenarios the Group is able to operate within its bank facilities and covenants and at May
2025, the bank facility utilisation based on the Board-approved budget is forecast to be around 40%.
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 2024.
Alternative performance measures
The Directors use alternative performance measures (for example adjusted profit before taxation, which
takes statutory profit before taxation and adds back exceptional items) as this allows a better assessment of
how the Group is performing by excluding costs not associated with trading. Key Performance Indicators are
detailed on the financial highlights page and are discussed throughout the annual report.
Iain Logan
Chief Financial Officer
16 September 2024
SPRINGFIELD PROPERTIES PLC
14
STRATEGIC REPORT
COMPANY OVERVIEW AND RISKS
FOR THE YEAR ENDED 31 MAY 2024
Climate Change Risks
The homes we deliver in key locations across Scotland are designed to be energy efficient. We adopt
measures to make them more environmentally sustainable, taking designs beyond the latest environmental
standards to reduce the environmental impact of our homes. We develop sites taking account of natural
resources, to protect biodiversity in the area for future generations. We have delivered over 60 developments
without fossil fuels, using air source technology as a successful alternative. We also have a head start on
modern methods of construction with two timber kit factories and all of our homes built off-site from
sustainable timber.
Alongside this report, our ESG strategy is published, and, for our second year, we have covered the risks
and opportunities we have identified against the four pillars of Governance, Strategy, Risk Management and
Metrics and Targets within our Climate-related Financial Disclosures on pages 17 to 36.
Quality Management
As a business, we are accredited in ISO 9001 and 14001. We aim to secure ISO 45001, an occupational and
Health and Safety management standard, within the 2024/25 financial year. These accreditations support
our continued work towards an accredited Integrated Management System (IMS).
Key Risks and Uncertainties
The principal risks and uncertainties identified and mitigated against include:
•
market risk;
•
credit risk;
•
liquidity risk;
•
changes in consumer demand;
•
cash flow risk;
•
resources risk;
•
legal and regulatory risk;
•
health and safety risk;
•
land supply risk;
•
planning risk;
•
funding risk; and
•
interest rate risk.
Market, credit and liquidity risks are dealt with in Note 29 of the consolidated financial statements. Further
details on how risks are managed are set out in pages 15-16.
Changes in Consumer Demand
The risk of reduced sales rates due to a reduction in demand is mitigated by the following factors:
•
regular reviews of market conditions, product range, pricing and geographic spread to make sure
the right homes are delivered in the right places at a profitable price;
•
customer service, quality of build and customer satisfaction are monitored to maintain reputation;
•
monitoring of and representations in relation to changes in government housing policy, including by
the CEO as an executive board member of Homes for Scotland, allows forward planning to mitigate
risks identified as result of changes in policy; and
•
our diversified geographical and product offering.
SPRINGFIELD PROPERTIES PLC
15
STRATEGIC REPORT
COMPANY OVERVIEW AND RISKS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Future Cash Flow Risk
Detailed budgeting and regular review of our forecasts allows efficient management of future cash flows as
part of managing any liquidity risk.
The Group has bank facilities, securing funding until January 2026, which include covenants and have
sufficient headroom in place. The Group and funders communicate regularly.
Resources Risk
The Scottish labour market is competitive, particularly in the North of Scotland where we compete for labour
with the renewables sector. Strategies in place to maintain Springfield’s reputation as a good employer and
ensure the appropriate supply of skills include:
•
annual remuneration and reward review;
•
annual training review for every employee;
•
a Board led culture of empowerment;
•
private health care for all staff; and
•
satellite television discount and gym membership.
While inflation on building materials has eased, prices are continually being managed by:
•
actively seeking alternative suppliers and materials;
•
standardising materials and products across the Group to add to buying power;
•
negotiating deals directly with manufacturers; and
•
the growth of the Group, and recent acquisition of competitors, has strengthened our purchasing power
and access to materials.
Legal and Regulatory Risk
The Group has an in-house legal department consisting of three experienced solicitors which advises and
supports the Group with legal compliance to ensure the Group reduces its legal and regulatory risks (e.g.
disruption to trade, fines or other penalties) and helps ensure contracts are robust across the business.
Health and Safety Risk
There are health and safety risks inherent to construction. Health and safety is the first agenda item at every
Board meeting. The Group has an in-house Safety Health Environment and Quality (SHEQ)Team which
ensures overall compliance by:
•
monitoring health and safety standards across sites with regular visits;
•
taking action where required;
•
advising on safe practice at the outset of projects;
•
initiating training;
•
introducing or updating applicable policies or procedures; and
•
ensuing health surveillance is carried out across the Group.
Land Supply Risk
The risk of securing sufficient land is reduced by a large land bank owned or secured by contract in a spread
of geographic locations which will appeal to our range of customers. This is also mitigated due to the strategic
land options, largely acquired as part of the Mactaggart & Mickel acquisition, which has strengthened our
access to land in different geographical locations.
Our strong land bank, with planning, ensures that the Group can bring forward developments even if land
buying market conditions are unfavourable. Prospective sites are brought forward from the land bank,
through the planning system, in tranches considered by the Board to be sufficient to allow the Group to
achieve its plans for growth.
SPRINGFIELD PROPERTIES PLC
16
STRATEGIC REPORT
COMPANY OVERVIEW AND RISKS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Planning Risk
Delays in receiving planning consents could interrupt business. Planning is dealt with internally by expert
planners who have good relationships with local authorities and who are supported by a full architectural and
design team. The Board reviews the balance of land held at the various stages of planning to ensure an
appropriate flow of consented land. Risk is also lower because of the high proportion of land that we have
with planning in place.
Financial Risk Management Objectives
Details of the Group’s financial risk management objectives are set out in Note 29 to the consolidated
financial statements.
Charitable Donations and Community Support
Across the Group we understand the importance of community and seek to support and engage those in the
areas where we are building. We specifically look to help young people achieve more and to help those who
are disadvantaged and have a sponsorship form available on our Group website where charities, groups and
organisations can request funding. Staff visit schools to support a variety of initiatives including careers
information, mentoring, and charitable programmes. During the year, the Group made payments of £73,739
(2023: £80,284) to charities.
In addition to local support, we have invested in youth sports teams, individual athletes and sports, like
Squash and Shinty. During the period, this includes amateur golfers, Summer Elliot and Calum Scott. Our
support of Scottish Squash and the Springfield Scottish Squash Open continues as well as our commitment
to Shinty, a predominately Scottish highland sport, with Tulloch sponsorship of the Camanachd Cup. This
agreement was extended to 2027 in the period.
Our work with the community also extends to young people as they prepare for the future. We work closely
with initiatives like Developing the Young Workforce and Career Ready where young people join us for work
placements to give them an insight into the world of work whilst showcasing the various avenues into the
many disciplines available within the sector.
SPRINGFIELD PROPERTIES PLC
17
STRATEGIC REPORT
CLIMATE RELATED FINANCIAL DISCLOSURE
FOR THE YEAR ENDED 31 MAY 2024
1. Governance pillar:
a. The Board’s oversight of climate-related risks and opportunities
The Board determines the strategy, purpose, governance, and risk management of the company. ESG
continues to be a standing item on every agenda for Board meetings, and climate-related risks and
opportunities are discussed within ESG Committee meetings. The terms of reference for the Board and Audit
Committee also include responsibilities for climate change. In February 2023, selected members of the Board
and ESG Committee were given training on climate change by experts at RSM. The governance structure is
presented in the table below to show the levels of governance and key roles and responsibilities:
Board of directors
Meeting frequency in 2023 / 2024: 5 meetings
Key role: Oversees climate-related risks and opportunities.
The Board includes a non-executive director appointed as ESG lead (since 2021).
Board responsibilities include:
•
Review strategic planning to ensure full integration of climate-related risks and opportunities
•
Oversee major capital expenditures, acquisitions, divestments with consideration of climate change
•
Ensure the interests of all stakeholders are considered in decision making
Informing
Reporting
The Board delegates specific ESG matters to its Committees
ESG Committee
Audit Committee
Meeting frequency in 2023 / 2024: 5 meetings
The ESG Committee’s responsibilities include:
•
Oversee
implementation
of
the
ESG
strategy, including climate-related matters
•
Recommend policies and practices to the
Board to improve performance
The Committee is chaired by the CEO, with:
•
Non-exec Director (responsible for ESG)
•
Group SHEQ Director
•
Group
Corporate
Communication
Director
•
Group HR Director
•
Group ESG Manager
•
Senior Group Counsel (Secretariat of
Committee)
Meeting frequency in 2023 / 2024: 3 meetings
The Audit Committee is chaired by a non-executive
director and responsible for:
•
Monitoring climate-related risks as part of the
review over principal risks
•
Receiving
and
reviewing
reports
from
management and the auditors relating to the
annual report
•
Overseeing the internal controls system
Informing
Reporting
Executive Leadership Team
The CEO is responsible for ESG performance, including climate change and implementing and achieving
the ESG strategy, including the management of climate-related risks and opportunities. The Group
Operational Directors are process owners against ESG objectives and report to the CEO through Group
Director meetings. Examples of ESG responsibilities for the executive leadership team include:
•
Group Commercial Director is responsible for reducing carbon intensity of purchased electricity
•
Group Architectural Director is responsible for alternatives to fossil fuel use in new homes
SPRINGFIELD PROPERTIES PLC
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STRATEGIC REPORT
CLIMATE RELATED FINANCIAL DISCLOSURE (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1. Governance pillar (continued)
a. The Board’s oversight of climate-related risks and opportunities (continued):
b. Management’s role in assessing and managing climate-related risks and opportunities:
The members of the Group Operational Board are responsible for setting management’s role in assessing
and managing climate-related risks and opportunities. The Operational Directors will delegate day to day
management of the ESG objectives to their senior leadership teams. The Group Operational Board includes:
•
Chief Executive Officer
•
Chief Operating Officer
•
Group Commercial Director
•
Chief Financial Officer
•
Group Architectural Director
•
General Counsel
•
Springfield North Managing Director
•
Group SHEQ Director
•
Glassgreen Hire Managing Director
•
Group HR Director
•
Tulloch Homes Managing Director
•
Group Corporate Communications
Director
•
Group Engineering Director
•
Springfield Partnerships Managing
Director
•
Springfield Central Managing Director
An example of climate change consideration during the year is the review of the practicalities of our timber
kit factories to build closed panel systems. This is being carried out by the Group Commercial Director to
help reduce the carbon and resource intensity of production. The Group Commercial Director is responsible
for the timber kit factories and their role in tackling climate risks and opportunities.
2. Strategy pillar:
a. Climate-related risks and opportunities the organisation has identified in the short, medium, long
term:
The time horizon for the risk and opportunities assessment have been defined as follows:
Timeframe
Years
Reason
Short
1 – 3 years
2024 - 2027
Aligns to time horizon considered in the business strategy and reflects
changes to legislation including the New Build Heat Standard.
Medium
4 – 9 years
2028 – 2033
Aligns to planning and site development time horizon.
Long
10 – 21 years
2034 - 2045
Aligns with the Group’s net zero carbon target to reach net zero emissions
by 2045. This target is consistent to Scottish government’s net zero target.
Informing
Reporting
Operational management
ESG Team
The Group ESG Manager is responsible for
implementing the ESG strategy:
•
Collecting operational performance data
on carbon emissions and other metrics.
•
Assessing and managing climate-related
risks on the risk register.
Operational Management
The management team supports the Operational
Directors in implementing their ESG objectives. The
management team integrates climate change
considerations into their roles in line with the Group
strategy. An example action includes supporting the
roll out of electric vehicle chargers at facilities.
SPRINGFIELD PROPERTIES PLC
19
STRATEGIC REPORT
CLIMATE RELATED FINANCIAL DISCLOSURE (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
2. Strategy pillar (continued)
a. Climate-related risks and opportunities the organisation has identified in the short, medium,
long term (continued):
Physical risks relate to changing weather patterns as a result of climate change, both chronic changes which
are longer term shift in climate patterns and an increasing frequency of extreme weather events. Transition
risks relate to policy, legal, market and technology changes that will occur as part of the transition to a low
carbon technology. Both types of climate risk and transitional opportunities have been identified by the
business. These climate-related risks are included in a climate risk register which is updated at least annually,
and details the potential impact of the risk, the risk grading, any mitigating actions, and the risk owner. The
risk grading is categorised as high, medium or low impact driven by knowledge of the business and informed
by the scenario analysis.
Details of material climate-related risks and their corresponding impact over short, medium, and long term
are summarised under recommendation b. of the strategy pillar. The risks and opportunities included in this
report are deemed to be material as they have the greatest potential impact and greatest likelihood of
materialising. We are working to extend our use of quantifiable risk gradings, including those that are
financially defined and to formalise this the enterprise risk framework. The climate-related risks will align to
the risk gradings and appetite.
b. The impact of climate-related risks and opportunities on the business, strategy, and financial
planning:
The impact of climate risks has been assessed over the short, medium, and long-term time horizons using
qualitative and quantitative scenario analysis. The assessment has used data from a range of sources
(detailed in Appendix A) - page 36.
We have not performed detailed scenario analysis for the short term because the impacts from both physical
and transitional risks are consistent with information we have today. The medium-term time horizon helps to
identify business risks in relation to interim carbon reduction targets. The long-term time horizon helps identify
business risks in relation to future climate risks. There are limited data sets for 2045. Therefore, we have
used the year 2050 as a proxy to understand climate-related risks and opportunities over the long-term
horizon.
The impact from the physical and transitional climate risks varies dependent on different future scenarios.
Two scenarios have been utilised, in line with Climate change disclosure recommendations, which illustrate
the contrasting possible future pathways of climate change, we have used a “below 2°C” and “above 4°C”
temperature outlook. Two different sources are used for physical and transitional risks for medium- and long-
term analysis, and are summarised below:
Temperature
rise post 2050
Scenario used
Risks
observed
Example type of risks
Below 2°C
Intergovernmental Panel on
Climate Change (IPCC)
Representative Concentration
Pathway (RCP) 2.6
Physical risks
Overheating Homes; Floods; Drought
stress; Precipitation; Windstorms in
the UK; Heat stress; Wildfire
3 – 4°C
IPCC RCP 6.0
Physical risks
Overheating Homes; Floods; Drought
stress; Precipitation; Windstorms in
the UK; Heat stress; Wildfire
SPRINGFIELD PROPERTIES PLC
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STRATEGIC REPORT
CLIMATE RELATED FINANCIAL DISCLOSURE (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
2. Strategy pillar (continued)
b. The impact of climate-related risks and opportunities on the business, strategy, and financial
planning (continued):
Temperature
rise post 2050
Scenario used
Risks
observed
Example type of risks
1.8°C
Shared Socioeconomic
Pathways (SSP) 1 - 2.6
Transition risks
Potential carbon prices and future
energy mix
Above 4°C
SSP 5 - 6.0
Transition risks
Potential carbon prices and future
energy mix
Please note, Shared Socioeconomic Pathways (SSP) scenarios for global carbon price do not reflect the
regional context of carbon price in EU and UK. Consideration on actual carbon price in the EU ETS and UK
ETS were in place in the impact analysis.
2.1. Summary of material physical risks:
The table below details the material physical risks with the potential impact classified as low, medium or
high risk. The grading of the risks is subjective but we are aiming to financially quantify the risk grading in
future. The mitigation actions were identified by the Operational Directors’ response for the area of the
business.
SPRINGFIELD PROPERTIES PLC
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STRATEGIC REPORT
CLIMATE RELATED FINANCIAL DISCLOSURE (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
2. Strategy pillar (continued)
2.1. Summary of material physical risks (continued):
Risk
Term
Rating
Impact on Springfield
Mitigation and
adaptation
Storms
Greater severity of storm-
related damage is
expected in an above 4
°C scenario.
Increased frequency of
storms will disrupt
construction activities.
Storms can also affect
the origin of raw
materials, with greater
uncertainty expected in
the supply chain over the
longer term.
Short
Term –
Low
Medium
Term –
Medium
Long
Term -
High
Impact on construction sites in
Scotland
Increase in expected damage from
tropical cyclones in the UK compared
to 2015 reference year, specifically:
•
Short term: increase by 6% (both
RCP 2.6 and 6.0)
•
Medium term: increase by 9%
(both RCP 2.6 and 6.0)
•
Long term: increase by 14% /
17% (RCP 2.6 / 6.0)
The storms will impact the Group
through:
•
Disruptions to construction
activities e.g. strong winds could
delays progress on site and
delivery of materials
•
Damage to infrastructure on site
and in the local area e.g. damage
to power supply or roads
Impact on Supply Chain
Our supply chain is global with most
tier 1 suppliers based in the UK
importing raw materials into the UK
such as timber from North America
and Scandinavia. These locations may
also experience higher levels of
disruption due to increased frequency
of storms.
We comply with all
current regulation
regarding wind design
to mitigate risk from
damage on
construction sites. It is
expected that
planning requirements
will adapt to the future
risk profile of storms.
The impact of storms
on the supply chain is
mitigated by using
several suppliers
through offering
alternatives in times
of product shortage,
delay, or price
increase. This
includes exploring
options for Scottish
timber production.
The procurement
team are in regular
contact with suppliers
to manage the supply
of materials.
SPRINGFIELD PROPERTIES PLC
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STRATEGIC REPORT
CLIMATE RELATED FINANCIAL DISCLOSURE (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
2. Strategy pillar (continued)
2.1. Summary of material physical risks (continued):
Risks
Term Rating
Impact on Springfield
Mitigation and
adaptation
Extreme weather events
Sudden changes in
temperature and
increased frequency of
extreme weather events
are expected in the UK.
This can include extreme
cold and changes in
rainfall patterns.
Short Term –
Low
Medium
Term – High
Long Term -
High
Extreme cold conditions or other
extreme weather is expected to
increase in frequency and severity
under an RCP 6.0 scenario. This may
lead to disruptions or emergency stops
for construction work. This could affect
working conditions on site and progress
of projects.
Our current sites are all based in
Scotland. There are currently no sites
exposed to a high risk of drought.
However, this could be an emerging risk
and one we will continue to monitor
drought risk.
We comply with
health and safety
regulations to
ensure the safety of
construction
workers in extreme
weather conditions.
It is expected that
health and safety
regulation will adapt
and provide
guidance for
emerging extreme
weather events.
In extreme heat
events, shift
patterns may need
to be changed for
construction
workers to avoid the
hottest parts of the
day. However, this
can only occur if
local building
regulations allow
earlier start times.
SPRINGFIELD PROPERTIES PLC
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STRATEGIC REPORT
CLIMATE RELATED FINANCIAL DISCLOSURE (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
2. Strategy pillar (continued)
2.2. Summary of material transition risks:
Risks
Term
Rating
Impact on Springfield
Mitigation and
adaptation
Carbon price
A higher carbon price
may increase material
costs but lead to a
reduction in embodied
carbon in construction
materials. Embodied
carbon is the carbon
dioxide emissions
associated with the
materials used in
construction. There may
be an introduction of
carbon price across all
materials. The risk may
be amplified by an
increased demand for
lower carbon materials,
for example, as all house
builders move towards
modern methods of
construction.
Short Term
– Low
Medium
Term – High
Long Term -
High
Our suppliers of certain construction
materials are exposed to carbon prices
through policy mechanisms like the UK
Emissions Trading Scheme (UK ETS).
Materials exposed to carbon price
currently include bricks, concrete and
other energy intensive materials. Other
suppliers may offset emissions
voluntarily to sell carbon neutral
products. Suppliers may pass these
costs on to the Group.
Higher carbon prices are expected with
scenario SSP 1 – 2.6 (1.8°C)
compared to the SSP 5-6.0 (Above
4°C) especially over the medium and
long term. Please see Appendix A –
page 36.
Based on data from the UK ETS and
EU ETS, we expect the price of carbon
in the medium and long term to
increase further than current
projections.
Supplier and industry
initiatives are reducing
the embodied carbon
in construction
materials. This would
reduce the exposure to
the cost of carbon
through UK ETS.
Timber frame
construction has a
lower embodied
carbon than materials
used in traditional
building methods, such
as bricks and
concrete. Modern
methods of
construction mean
more timber is used
than traditional
building materials.
Supply chain
Transitional risks in the
supply chain relate to the
housing sectors
objectives to reduce
embodied carbon.
Modern methods of
construction, including
the use of timber kits, is
expected to increase.
Short Term
– Medium
Medium
Term – High
Long Term -
Low
The increase in timber used by
national house builders could increase
demand and costs of materials. This is
expected to increase over the short to
medium term in line with building
regulations and company targets to
reduce embodied carbon. In the long
term, the demand may remain
consistent with the medium term.
The impact of
increased demand for
timber is mitigated by
using several suppliers
to provide alternate
options in times of
shortages or price
increases. For
example, exploring
opportunities for
Scottish timber. The
procurement team are
in regular contact with
suppliers to manage
the supply of
materials.
SPRINGFIELD PROPERTIES PLC
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STRATEGIC REPORT
CLIMATE RELATED FINANCIAL DISCLOSURE (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
2. Strategy pillar (continued)
2.2. Summary of material transition risks (continued):
Risks
Term
Rating
Impact on Springfield
Mitigation and
adaptation
Housing regulations
The Scottish Government
has increased the
stringency of building
regulations to improve the
energy efficiency of
homes and reduce the
reliance on a fossil fuel
heating systems.
Short Term
– High
Medium
Term –
Medium
Long Term
– Low
The New Build Heat Standard
(Scotland), and other building
regulations, increases the sustainability
requirements of homes built.
Failure to keep up with the regulation
and standards could lead to financial
damages.
There may be increased costs for
research and development, including
trialling new technology to meet the
building regulations. There may also
be increased costs to comply with the
regulations as additional or different
materials are required to build a home.
There may be supply shortages of in
demand products, including solar
panels.
The risk is higher in the short term but
is expected to become part of business
as usual in the medium to long term.
Involvement in
industry groups and
with regulators can
help understand
expectations to
comply with evolving
regulations.
Immediate changes in
building regulations
have been
incorporated into
home design and
through updates to
planning permission
applications.
Springfield has
ongoing R&D projects
led by the in-house
architectural team that
look beyond
regulatory
requirements when
designing and building
homes.
SPRINGFIELD PROPERTIES PLC
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STRATEGIC REPORT
CLIMATE RELATED FINANCIAL DISCLOSURE (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
2. Strategy pillar (continued)
2.2. Summary of material transition risks (continued):
Risks
Term
Rating
Impact on Springfield
Mitigation and
adaptation
New technology
New technology is
required to decarbonise
Springfield’s own
operations, as well as
reduce the energy used
in new homes.
Short Term
– Medium
Medium
Term – High
Long Term
– Low
New technology includes alternatives
to fossil fuel heating and construction
machinery, such as air source heat
pumps and solar batteries.
A high capital investment is expected
with new technologies. This includes
trialling new technology to see how
they work against more carbon
intensive alternatives.
The workforce may need to be
upskilled to install new technology in
homes.
Competitors may adopt new
technology earlier which would result in
a poor sustainability profile compared
to competitors.
Failure to find and adopt alternatives to
diesel generators will mean we do not
meet carbon reduction targets.
We have been
designing and building
homes with low
carbon technologies
for several years and
this work has gained
momentum through
one of our ESG
projects, led by our in-
house architectural
team. This includes air
source heat pumps,
and hybrid or solar
powered solutions.
The project has
assessed feasibility of
technologies and
recommended the
best solutions against
a range of criteria.
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2. Strategy pillar (continued)
2.3. Summary of opportunities:
Opportunities
Details
Impact
Green finance
Increased offering of
sustainability linked loans
and other finance
solutions can help
provide the capital to
accelerate the transition
to a low carbon future.
This may include
reduced interest rates for
meeting green lending
criteria.
There may be a small reduction in interest payments from
sustainability linked loans by meeting ESG targets. In
preparation of the increased availability of green finance, we
have been involved with Next Generation, a sustainability
benchmarking programme for UK housebuilders.
There may also be increased access to additional investors by
demonstrating strong ESG performance.
Modern methods
of construction
The UK housing market
is moving towards using
modern methods of
construction approaches
driven by industry
initiatives and
government regulation.
The Group has two timber kit factories as part of our
operations which offers a competitive advantage over other
housebuilders. We have already started a review to increase
the percentage of the home that is built in the timber factory
before reaching site. There is an opportunity to increase the
output of the timber kit factories, including selling timber kits to
other house builders who do not have their own infrastructure.
There are opportunities for us to conduct pilot projects with
locally sourced materials, including timber. This will assess the
feasibility and quality of Scottish grown timber. Local supply
chains can also reduce logistics costs, cutting both transport
related expenses and reducing carbon emissions.
Location of land
bank
The location of the
Group’s current land
bank has limited
exposure to flood risk,
and other physical
climate risks.
Scenario analysis on physical risks faced by Scotland has
identified areas, such as Fort William region, prone to flooding
under both below 2°C scenario and above 4°C degree
scenario.
Our process for appraising land acquisitions already includes
assessing land against flood risks.
The consideration of physical risks of climate change on land
acquisition creates a competitive advantage for the Group to
secure future value of land.
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2. Strategy pillar (continued)
2.3. Summary of opportunities (continued):
Opportunities
Details
Impact
Green homes
Improved energy
efficiency in new homes
may create a competitive
advantage for low carbon
homes compared to
older housing stock.
Green mortgage
products for customers
may be available for
those buying energy
efficient homes.
The early adoption of low carbon products and low carbon
technology can create competitive advantage over other house
builders in the market.
A survey conducted in 2023, found that 74% of our customers
are willing to pay up to 5% more for an energy efficient home.
Examples of consumer demand for low carbon technologies
include solar panels and battery storage for solar energy.
Green mortgage products are on the rise. Our homes are more
energy efficient than older housing stock and therefore
customers may be able to qualify for green mortgage products.
This could increase customer demand for the new homes we
build.
New technologies
and resource
efficiency
Improved technology for
onsite machinery can
reduce energy usage
leading to cost savings.
The decarbonisation of
the UK energy supply will
result in lower
operational emissions.
Diesel machinery is used on site. There will be financial and
environmental gains achieved by using more efficient
machinery. Alternatives to diesel generators on site can
include accessing the grid energy supply at an earlier stage of
the development.
Attracting more
talent
Employees are
increasingly motivated to
work with companies
with strong ESG
credentials.
Increasing the positive brand image for environmentally and
socially friendly operations and the delivery of green homes
can help attract more talents.
Internal training programmes can also be planned to upskill the
current workforce to incorporate sustainability in their current
roles and responsibilities.
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2. Strategy pillar (continued):
c. The resilience of the Group’s strategy, taking into consideration different climate-related
scenarios, including a 2°C or lower scenario:
We have assessed the resilience of the strategy and business model through detailed scenario analysis and
have a number of climate change mitigation strategies in place that increases the resilience to potential risks.
For example, climate risks are assessed when performing land valuations and meeting planning
requirements.
The main impacts across the below 2°C scenario and above 4°C have been identified.
The main impacts of a below 2°C scenario are:
Carbon price
There is a risk of increasing costs of raw materials used in the construction sector in a below 2°C scenario.
A carbon price is assumed to be incorporated in high emitting sectors covering different construction
materials, such as steel, concrete and bricks. Under this scenario, our suppliers could pass on the impact of
carbon pricing for high carbon building materials onto the Group. This would increase the costs of operations
in the short and medium term. Prices may be consistent in the long term.
The assumptions in a below 2°C model is that regulations become more stringent to transition to a low carbon
economy. The carbon price is modelled on several countries and sectors.
In a below 2°C scenario, the SSP 1 - 2.6 model projected a medium-term carbon price of circa £27 per tonne
of CO2e by 2030, while the long term global carbon price for 2050 is projected to be £82 per tonne of CO2e.
Based on our previous analysis, approximately 12.21 tonnes of CO2e are attributed to bricks per average
house built and 10.41 tonnes of CO2e from the concrete used in an average house built. By using the
expected carbon costs for bricks and concrete as an example, the overall increase in construction materials
would be £0.6m (1%) for 2030 and £1.8m (2%) for 2050 (using a FY2022 baseline level of output). It should
be noted that, the average price for carbon in UK Emission Trading Scheme reached £97 per tonne of CO2e
in 2022, which has already exceeded the projected price by SSP 1 - 2.6 model.
Therefore, it is likely that we will be exposed to a higher cost of materials. We are engaging with our value
chain to reduce greenhouse gas emissions of materials, including understanding suppliers own carbon
reduction plans.
Regulatory requirements
The Housing to 2040 strategy from the Scottish Government includes a target for all residential properties in
Scotland to have an Energy Performance Certificate (EPC) with a minimum of a ‘C’ rating. New homes in
Scotland which are consented from 2024 onwards, must have zero direct emissions. It means no gas boilers
or other fossil-fuel-based heat or power. Overall, the measures will see the equivalent to a 68% reduction in
emissions from heat in buildings by 2030 based on 2020.
Scotland has a net zero target of 2045 and housing is expected to make-up a significant part of the emission
reduction efforts. Technological solutions are required to phase out the current reliance on fossil fuel in homes
which could affect the cost to build new homes. In addition to cost increases, there could be a shortage in
supply of technology and expertise, leading to delays in the construction and maintenance of homes that are
compliant with the regulations.
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2. Strategy pillar (continued)
c. The resilience of the Group’s strategy, taking into consideration different climate-related
scenarios, including a 2°C or lower scenario (continued):
Impact on current and future sites
We have assessed our land bank against several physical climate risks, using the data sources documented
under recommendation b. of the strategy pillar and Climate Impact Explorer. The impact of physical climate
risks on the land bank has been assessed over the medium and long term.
The results of this are shown in the table below:
Overheating
Homes
Flood
Heat
stress
Precipitation
Wildfires
Medium term (% of sites
exposed to increased risk)
0%
0%
0%
4%
4%
Long term (% of sites
exposed to increased risk)
0%
0%
0%
14%
6%
As shown above, precipitation poses the largest risk based on the current land bank. The expected increased
rainfall could increase risk of flooding and require additional flood defences on the site and may delay
construction work.
The risk of wildfires is low over the medium term. The location of future homes may not be in close proximity
to the woodland or forest. Therefore, the analysis only indicates that sites are closely located to woodland or
forest areas with an increased wildfire risk so will feed into planning decisions.
The impact from precipitation and wildfires are relatively low risk. The other physical risks are not likely to
impact our current sites under the below 2°C scenario. As the analysis is based on the current land bank,
the risk profile of future sites is likely to change.
The main impact of above 4°C scenario includes:
Impact on operations
Physical risks under the above 4 °C scenario analysis manifest over a longer timeframe. There will likely be
an increase of extreme weather in Scotland including flooding, and unusually high or low temperatures. The
results of this scenario are shown in the table below:
Overheating
Homes
Flood
Heat
stress
Precipitation
Wildfires
Medium term (% of sites
exposed to increased risk)
0%
0%
0%
4%
4%
Long term (% of sites exposed
to increased risk)
21%
0%
0%
94%
6%
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2. Strategy pillar (continued)
c. The resilience of the Group’s strategy, taking into consideration different climate-related
scenarios, including a 2°C or lower scenario (continued):
The results of the analysis into the sites under the above 4°C scenario are consistent with the below 2°C
scenario over the medium term. The physical risks under the above 4°C scenario may be more extreme but
take longer to materialise in Scotland. The analysis is based on the current land bank, which is subject to
change over the longer term.
Impact on operations (continued)
Scotland will experience an increase in precipitation in all locations, apart from certain areas of Northern
Scotland. Over the long term, 94% of sites have been identified as having an increase in precipitation by 2%
annually.
Over the long term, 21% of sites have an increased risk of overheating homes. Homes in urban areas are
more exposed to overheating due to the heat island effect. The overheating of homes has not been identified
as material risk as mitigations for heat stress are expected to feature in future building regulations over the
longer term.
While we did not identify any sites at risk of flooding, there is a high risk of flooding around the Fort William
area and in Aberdeenshire. The Group does not currently have any land in these areas, however, the impact
of these could push competitor housebuilders into other locations impacting land availability.
The impact from wildfires in consistent with the RCP 2.6 scenario.
Impact on supply chain
The physical risks of climate change will also impact the Group’s suppliers differently, depending on their
locations. An increased risk of extreme weather events could damage supplier facilities or access, quality,
and availability of raw materials.
We use timber as a key material in the kit factories, sourced from Scandinavia and Canada. These locations
are exposed to different physical risks. If these risks materialise, it could cause a reduction in the quality of
the timber, shortages of supply due to increased demand or damaged stock leading to increased costs of
material.
Demand for timber is expected to increase as more UK housebuilders opt for timber as a lower carbon
alternative to traditional brick construction. Whilst this presents competition for supplies, it may present an
opportunity to work with local Scottish suppliers to source quality Scottish timber. The quality must be
assessed, but there are early discussions around the use of new technologies to strengthen the faster
growing local timber to offset the need to import from colder climates which have traditionally grown a better
product.
Overall assessment of resilience
The Group has started to take steps to understand the business impact from climate-related risks by
analysing risks and opportunities through engaging with external consultants on climate issues.
The highest impact risk expected over the medium term is carbon price costs leading to an increased cost of
raw materials under a below 2°C scenario. As part of the Scope 3 assessment, carbon intensive materials
have been identified and supplier engagement will be conducted. There are several industry led initiatives to
reduce the carbon intensity of construction materials. In addition, we have set a Net Zero target, including
Scope 3 emissions, for 2045.
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2. Strategy pillar (continued)
b. The resilience of the Group’s strategy, taking into consideration different climate-related
scenarios, including a 2°C or lower scenario (continued):
The highest impact risk expected over the long term are physical climate risks. Climate risks are assessed
when purchasing land, and when developing the land through planning permission requirements. However,
there may be challenges in the future where land in certain locations is in scarce supply or requires significant
climate mitigation costs. The impact of physical climate risks will be monitored at least annually.
3. Risk management pillar:
a. The organisation’s processes for identifying and assessing climate-related risks:
Climate change has been determined to be a principal risk and is assessed and managed in line with the
Group’s risk management framework, as detailed under recommendation c. of the risk management pillar
below.
The process of identifying and assessing climate-related risks followed the below stages:
1. A broad range of climate-related risks were considered across both transitional and physical risks.
Different sources were used to identify these risks, including industry briefing papers and emerging
government policies.
2. The impacts of each climate-related risk were considered as part of a workshop with the executive
team and function directors/heads of departments (for attendee information see the introduction to
the report.) For each risk the potential impact on the Group’s business model and future strategy
was discussed using qualitative scenario analysis over the defined short, medium, and long term
time horizons. This enabled the identification of material risks for our business.
3. For the material climate-related risks identified, additional quantitative scenario analysis was
performed (see recommendation a. of the strategy pillar for more details).
4. Material climate risks were added to the risk register. Where appropriate, climate-related risks were
also included in functional risk registers by business areas. Example business areas include health
and safety, environment and people, construction, and land and planning.
5. The potential impact of each risk was coded as low, medium, or high (see recommendation b. under
the risk management pillar for more details).
6. High impact risks identified were added to the principal risk register. For these risks, either the CEO
or CFO will be the risk owner, and it will be reviewed by the Board and Audit Committee.
The climate risk register will be updated at least annually by assessing the relevance of the identified risks
and conducting further scenario analysis supported by more granular data analysis.
b. Processes for managing climate-related risks:
This is updated at least annually, and details the potential impact of the risk, the risk grading, any mitigating
actions, and the risk owner. The climate risk register includes details of the potential impact and risk grading
for each risk, these are classified as low, medium, or high for both grade and impact. The grading system
is based on the senior management team’s professional judgement and a materiality assessment across
different business functions. Different risks are managed differently depending on the grading:
•
Risks categorised as low indicate that we recognise the risk, but it is not actively managed as the
risk is unlikely to affect the organisational strategy.
•
Medium risks require management and has an allocated senior manager as the risk owner.
•
High impact risks are included on the principal risk register. The ultimate risk owners are the CEO,
COO and/or CFO of the group. The principal risk register is reviewed by the Audit Committee and
the Board as described under governance pillar.
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3. Risk management pillar (continued)
b. Processes for managing climate-related risks (continued):
Risk registers are maintained within each department and centralised risk reporting is in place to consolidate
Group level risks. As the main activity of the majority of subsidiaries are the construction of homes, most
risks are consolidated at a Group level. The timber kit factories are exposed to a different profile of risks.
Mitigation methods are identified and assessed against the risks outlined on functional risk registers. Risks
are assigned with new grading scores after considering mitigation measures. Mitigation for climate-related
risks is detailed under recommendation b. of the strategy pillar.
c. How processes for identifying, assessing and managing climate-related risks are integrated into
the Group’s overall risk management:
Climate-related risks are identified considering a longer time frame than is typically considered in the
enterprise risk process. Therefore, it is appropriate to maintain a climate risk register. Climate risks from
this register may be included in the functional risk registers, where they are assessed and managed using
the same principles of the established risk process in the short term. For example, climate risks within the
functional risk register are subject to the same assessments of grade and impact as other risks.
The risk appetite and the financial categorised risk gradings have not yet been defined as part of the
enterprise risk process. This work is ongoing and climate-related risks and opportunities will use the same
criteria when this has been defined and approved by the Audit Committee.
4. Metrics and targets pillar:
a. Detailed below the metrics used by the organisation to assess climate-related risks and
opportunities in line with its strategy and risk management process:
We monitor emissions from our own emissions, in accordance with the GHG Protocol Corporate Standard.
Other metrics have been identified to show progress towards climate-related risks or opportunities. Please
see the table below:
Metric
Linked
risk
or
opportunity
Target
Performance in
FY24
Performance
in
FY23
Average
Standard
Assessment
Procedure
(SAP) rating on
all homes built in
the past year.
Future
Homes
Standard, incl. varying
standards across UK,
requiring
improved
energy efficiency and
reduced carbon.
86
86.1
85.5
Homes
completed in the
past year with
no
fossil
fuel
access (%).
Improved
energy
efficiency in homes
and
competitive
advantage in offering
low carbon homes.
We
are
assessing
feasibility of
setting
a
target.
45.5%
32%
Ultra
Low
Emission
Vehicles
in
company
fleet
(%).
Failure to adopt new
technology may lead
to
Springfield
not
meeting
carbon
reduction targets.
We
are
assessing
feasibility of
setting
a
target.
Electric company
cars: 100%
Electric company
vans: 2.78%
Overall company-
owned
electric
vehicles: 56.61%
Electric
company
cars: 99.25%
Electric
company
vans: 2.83%
Overall company-
owned
electric
vehicles: 56.67%
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4. Metrics and targets pillar (continued)
c. Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related
risks:
Scope 1 and Scope 2 carbon emissions are disclosed as part of the Streamlined Carbon and Energy
Reporting (SECR) in the annual report.
The Group undertook an initial assessment of Scope 3 emissions back in 2022 and focussed on the upstream
value chain emissions. For the first time, this 2024 report includes our downstream emissions which includes
product use / emissions from homes sold. The Scope 3 emissions have been calculated following guidance
from the GHG Protocol. The 2024 data and summary approach taken to calculate each emission source is
detailed in the table below:
Scope 3 data
(GHG Protocol
category)
2024
tonnes
CO2e
2023
tonnes
CO2e
Commentary and summary of approach taken
(emission factors from Department for Energy Security
and Net Zero, and Department for Business, Energy, and
Industrial Strategy)
Purchased goods
and services
(construction and
non-construction
materials) /
capital goods /
upstream
transportation
(category 1, 2 &
4)
57,123
59,919
Slight decrease due to fewer completions of homes.
We estimated the average materials needed to build a
home and mapped this to the emission factors.
Therefore, the emissions for an average home are
calculated using the tonnes of material multiplied by the
total completions for this year. This is the same approach
as last year.
Non-construction material spend is calculated using the
Consolidated Profit and Loss statement to map financial
spend relating to other goods and services. Data
excludes other scope 3 categories e.g. waste and
business travel as these are covered separately.
Fuel and energy-
related activities
(category 3)
133
826
Decrease is due to changes in emission factor, and
reduction in energy usage across categories (gas and
electricity) compared to previous year.
Using fuel and energy data from SECR workings, to
apply emission factors on Well to Tank (WTT) and
Transmission and Distribution (T&D) across gas,
electricity and transport related fuels.
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4. Metrics and targets pillar (continued)
d. Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related
risks (continued):
Scope 3 data
(GHG Protocol
category)
2024
tonnes
CO2e
2023
tonnes
CO2e
Commentary and summary of approach taken
(emission factors from Department for Energy Security
and Net Zero, and Department for Business, Energy, and
Industrial Strategy)
Waste from
operations
(category 5)
141
248
Reduction due to change in waste profile – waste
increased, but categories with highest emission factors
decreased in volume, for example wood.
Calculated using volume data of waste produced in
operations. Most waste contracts provide type of waste
collected and where this is not available, an overall
construction waste category emission factor is used.
Business travel
(category 6)
62 from
activity
data
241 grey
fleet from
SECR
429
More precise method used with actual data for hotels and
flights. 2023 data is total business travel including grey
fleet from SECR.
Grey fleet business travel is covered by SECR. This is
not included within this section. Actual data for flights and
hotels and for other categories, we have used a spend
based approach.
Employee
commuting
(category 7)
528
369
Increase due to use of site-based data to estimate actual
distance travelled
Calculated using employee numbers, average
commuting distances and a survey of 8 sites over a one-
month period during the reporting year. Collecting the
actual data from sites is an improvement on last year.
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4. Metrics and targets pillar (continued)
b. Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related
risks (continued):
Total upstream
and own
operations
57,989
61,888
Reduction in emissions is expected as there are fewer
completions in the year.
Use of sold
products
(category 11)
30,507
Not
calculated
We used the Dwelling Emissions Rate from the Energy
Performance Certificate of a representative sample of
house types across all developments during the year. We
have projected the future emission factors by reviewing
the plans for decarbonisation of the electricity grid and
assuming a constant gas emission factor. We have used
a 60 year lifecycle which is consistent with the industry
averages and grossed up the sample to cover the total
completions in the year.
End of life
treatment of sold
products
(category 12)
1,736
Not
calculated
The end-of-life emissions are based on demolition /
recycling the materials used to build the average home
and waste emission factors. The data for one home has
been applied to the total completions in 2024.
Total scope 3
under
consideration
88,497
61,888
Additional scope 3 categories included in 2024.
c. The targets used by the Group to manage climate-related risks and opportunities and
performance against targets:
A net zero target for Scope 1 and Scope 2 are set for 2045. An interim carbon reduction target has been set
at 39% by 2030 for location-based scope 1 & 2 emissions and 47% for market-based emissions. The interim
target ensures that actions to improve energy efficiency and reduce carbon emissions are prioritised in the
short term.
An engagement target is used for Scope 3 emissions to reduce the emissions from our value chain, with a
focus on purchased goods and services. Based on guidance from the science-based target initiative (SBTi),
within an engagement target, the coverage of suppliers should reach at least 67% of Scope 3 emissions.
The Group has started to monitor additional ESG data, including the metrics included under recommendation
b. of the metrics and targets pillar. Performance across the metrics is monitored by the ESG Committee.
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Appendix A. Scenario Analysis Sources
The following sources were used to aid our scenario analysis:
Scenario
element
Sources
Extra information
Site
locations
Locations covered both current sites and future
sites across the Group.
No extra information.
Physical
risk
scenarios
Climate Impact Explorer was used as the basis for
2030 and 2050 scenario analysis, comprising of
RCP 2.6 and RCP 6.0 scenarios.
The Climate Impact Explorer provides projections
for future climate impacts at different warming
levels and for several policy-relevant greenhouse
gas emission scenarios.
The Climate Impact Explorer was developed by
Climate Analytics, together with Flavio Gortana, the
Potsdam Institute for Climate Impact Research and
ETH Zürich. Its development was supported by
ClimateWorks Foundation and Bloomberg
Philanthropies in the context of a collaboration with
the Network for Greening the Financial System, as
well as the German Ministry for Education and
Research.
The physical risks reviewed include
overheating homes, floods, drought stress,
precipitation, windstorms in the UK, heat
stress and wildfire.
Transition
risk
scenarios
Data Explorer: IPCC scenarios was used as the
source for carbon price scenarios, comprising the
Shared Socioeconomic Pathways scenarios. The
Shared Socioeconomic Pathways are a set of
scenarios which are central to the work of the UN
climate reports produced by the Intergovernmental
Panel on Climate Change (IPCC).
The data presented on Data Explorer: IPCC
scenarios was based on the work of Keywan Riahi
et al. (2017), which brings together the results of
independent researchers that have mapped out a
range of socioeconomic scenarios for how the
world could change in the coming decades.
Reference: Riahi, K., Van Vuuren, D. P., Kriegler,
E., Edmonds, J., O’neill, B. C., Fujimori, S., … &
Tavoni, M. (2017). The shared socioeconomic
pathways and their energy, land use, and
greenhouse gas emissions implications: an
overview. Global environmental change, 42, 153-
168.
The actual carbon price as reflected from
UK and EU emission trading schemes can
be referenced from the carbon price tracker by
Ember.
Under the SSP 1-2.6 – global carbon price
is expected to be $11.72 (£10) per tonne in
2030 and $99.97 (£82) per tonne in 2050.
Under the SSP 5-6.0, the expected carbon
price is $11.72 (£10) per tonne in 2030 and
$26.28 (£22) per tonne in 2050.
Sandy Adam
Executive Chairman
16 September 2024
SPRINGFIELD PROPERTIES PLC
37
CORPORATE GOVERNANCE
BOARD OF DIRECTORS
Sandy Adam, Executive Chairman
(Sits on Nomination Committee)
Sandy is the grandson of the founder of Springfield and has worked for the Company since the 1980s. Sandy
led the Company during its change from a market garden business into a housebuilder in 1988. Sandy has
been Chairman of the Company since 2004 and has been the driver behind many key commercial decisions
including the focus on affordable housing, the geographic expansion out of Moray in 2010, the acquisition of
Redrow’s Scottish assets/operations in 2011, the listing of Springfield on AIM in 2017 and the acquisition of
Dawn Homes in 2018, Walker Group in 2019, Tulloch Homes in 2021 and Mactaggart & Mickel’s Scottish
housebuilding business in 2022. Sandy has decades of experience in the Scottish housing and property
markets, including his role as Chairman of Homes for Scotland between 2014 and 2015.
Innes Smith, Chief Executive Officer
(Chair of ESG Committee)
After graduating from Heriot Watt University in 1991, Innes qualified as a Chartered Accountant with KPMG
before moving into industry as financial controller at SGL Technic, a subsidiary of RK Carbon Fibres (now
called SGL Carbon Fibres Limited), a NASDAQ and Deutsche Börse listed Company. Subsequently Innes
was promoted to Finance Director at SGL Technic and after five years moved to Gael Force. Innes joined
Springfield in 2005 as Finance Director and was appointed Chief Executive Officer at Springfield in October
2012 after seven years with the Company. Innes was appointed to the Board of Homes for Scotland in 2016.
Iain Logan, Chief Financial Officer
Iain has 15 years professional experience working in a Plc environment. Iain qualified as a Chartered
Accountant in 2002 with PricewaterhouseCoopers in Edinburgh. He then spent eight years with Murray
International Holdings Limited gaining extensive corporate finance experience working on all aspects of
acquisitions, disposals and fund raising within its investment company. He also held the Financial Controller
role for its residential and property development company.
Iain then spent nine years as Group Financial Controller of Omega Diagnostics Plc where he had full
responsibility for all financial reporting and management of finance teams in the UK, Germany and India.
Iain joined Springfield in 2020 as Group Financial Controller and was promoted to Finance Director in 2021
leading all aspects of financial operations and establishing strong relationships with external stakeholders.
He played a key role in the acquisitions of Tulloch Homes in 2021 and the Scottish housebuilding division of
Mactaggart & Mickel in 2022 and was appointed as CFO in 2023.
Matthew Benson, Non-Executive Director
(Chair of Audit Committee, sits on Remuneration, ESG and Nomination Committees)
Matthew graduated from Oxford University and began his career with Morgan Stanley, working in
international finance in London. Matthew then established his own consultancy business focused on the
structuring and planning of high quality residential and leisure projects. Matthew joined Rettie & Co as a
Director in 2002 with responsibility for land and development, new homes and rural projects. He was
appointed to the Springfield Board as a Non-Executive Director in 2011. Matthew has a number of other
responsibilities including member of the Advisory Board of Kleinwort Hambros private bank, Trustee of
Project Scotland and Director of Edinburgh Arts Festival. Matthew was also the founding Chair of bio-tech
businesses EctoPharma Limited and Ryboquin Limited.
SPRINGFIELD PROPERTIES PLC
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CORPORATE GOVERNANCE
BOARD OF DIRECTORS (CONTINUED)
Nick Cooper, Non-Executive Director
(Sits on Audit, Remuneration, ESG and Nomination Committees)
Nick is a qualified solicitor with over 20 years board experience with UK-listed and private companies. Nick
has served as General Counsel of the Football Association since April 2024. Prior to that he was a member
of the Group Leadership Team at Johnson Matthey Plc, firstly as Group General Counsel and Company
Secretary and now Head of Global Business Services. From 2010 to 2015, he was Corporate Services
Director at Cable & Wireless Communications Plc, which he joined from Cable & Wireless Plc, where from
2006 to 2010 he was General Counsel and Company Secretary. His previous in-house legal and corporate
experience includes roles at Energis Communications Ltd, JD Wetherspoon Plc, The Sage Group Plc and
Asda Group Plc. Nick joined Springfield as a Non-Executive Director in 2018.
Colin Rae, Non-Executive Director
(Sits on Audit, Remuneration, ESG and Nomination Committees)
Colin is a chartered Quantity Surveyor with significant experience in the construction and housebuilding
industries. From 2002 to 2019, he held leadership positions at Places for People, one of the largest
development, regeneration, property management and leisure companies in the UK. Most recently he was
Group Executive Development Director responsible for a UK-wide mixed tenure development programme of
c.£200 million. In addition to his role with Springfield, Colin acts as senior advisor for a number of property
businesses active in the residential sector. Previous experience includes project management roles at the
EDI group, and Woolwich Homes Ltd, as well as surveyor positions at Millar Brown Associates and Gibson
& Simpson. Colin is a former director of Homes for Scotland, he is a member of the Royal Institution of
Chartered Surveyors (MRICS) and holds a BSc in quantity surveying from Napier University. Colin was
appointed to the Board in 2019 as a non-executive director and, among other positions, sits as a founding
member of our Environmental, Social and Governance (ESG) committee.
SPRINGFIELD PROPERTIES PLC
39
CORPORATE GOVERNANCE
QCA CODE COMPLIANCE
FOR THE YEAR ENDED 31 MAY 2024
This report provides shareholders with an overview of the Group's corporate governance arrangements and
their operation during the year and how we comply with the Quoted Companies Alliance’s 2018 Corporate
Governance Code for Small and Mid-Size Quoted Companies (“the QCA Code”).
The QCA Code provides a robust framework for the Group to maintain high standards of corporate
governance. It sets out ten principles. Each principle and the Group's actions are set out below. Sandy Adam,
as Chairman, is responsible for ensuring the ten principles are followed across the Group.
A copy of this statement will be available on our website through its inclusion in this annual report.
1.
Strategy and Business Model
The Group delivers homes across housing tenures in developments of different sizes and locations across
Scotland. The Group’s focus is on the delivery of private and affordable homes, and, under contract housing,
we provide development services to third party private organisations which has included homes for PRS. We
believe this combination is key to sustained long term growth and ability to weather economic uncertainty.
Our markets section within our Chairman’s statement, on page 5, provides an overview of the market in
relation to private, affordable and contract housing delivery, and our CEO statement details macro factors
and our actions within the year for private (page 9), affordable (page 10) and contract housing (page 10).
2.
Statement and Understanding Shareholder Needs and Expectations
Sandy Adam, as Chairman, is responsible for establishing and maintaining appropriate communication
channels between Executive Directors and shareholders. Maintaining positive relationships with
shareholders is important to the Board.
Shareholders communicate with the Board by email, telephone and in person meetings throughout the year
including bi-annual investor presentations organised by our nominated advisor, Singer Capital Markets. In
addition, we offer a webinar of both our interim and annual results which is open to all and promoted through
the RNS. The Board believes the presentations provide it with vital information to understand the needs and
expectations of Springfield’s shareholders.
We maintain a corporate website (www.thespringfieldgroup.co.uk). It contains a range of information required
by AIM Rule 26 including our annual and half year reports, trading statements and all regulatory
announcements. We regularly distribute press releases to national and local press with news and updates
on the Group’s current projects which can also be found on the corporate website.
We have two expert analysts working with us – Equity Development and Progressive Equity - to help potential
investors and existing shareholders understand our business, offer independent views on company
performance and provide an outlook including projections looking forward. Analyst notes are published on
our corporate website for reference.
Details of this year’s AGM will be available to download from our corporate website. The Board recognises
the AGM as an important opportunity for shareholders to vote on resolutions, to meet the Board and to ask
questions.
3.
Wider Stakeholder and Social Responsibilities
The Group operates across Scotland and recognises that it must maintain strong relationships with all
stakeholders. These include employees; customers; suppliers; national & local government; and local
communities. Springfield creates a climate where everyone can thrive. The Group had 636 employees as at
31 May 2024, seeks to promote from within, develops staff with training, supports work placements and
apprenticeships and has an Equality, Diversity and Inclusion (EDI) policy in place which is regularly reviewed.
SPRINGFIELD PROPERTIES PLC
40
CORPORATE GOVERNANCE
QCA CODE COMPLIANCE (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
3.
Wider Stakeholder and Social Responsibilities (continued)
Engaging with all employees across the Group is an integral part of the ethos within the business. The
Chairman and CEO meet employees’ departmental groups on a bi-annual basis. The meetings provide an
opportunity for employees to hear of future plans, to raise any concerns and to ask questions. Each office
also has regular Employee Representative meetings where questions can be raised, and issues discussed
with minutes of the meetings published on our intranet for reference. The intranet which, along with useful
information for staff from policy information to staff contact details, also shares news and updates from across
the business keeping employees engaged on Group activities a daily basis.
Customers: Customer views are sought via In-house Research Limited who contact our customers around
between four and six weeks after handover of their home and gather feedback. Each Managing Director
actions any points required because of this feedback. Of those customers responding, 96% would
recommend one of the Group’s homes to friends or family. In addition, our Customer Feedback Group, with
representatives from across the business, meets regularly to consider the qualitative feedback received
through the surveys and considers what improvements could be made. The Group has completed its first full
year as registered as a developer under the New Homes Quality Code.
National & Local Government: Our CEO is a Director of Homes for Scotland, the voice of the home building
industry in Scotland, representing some 200 companies and organisations which together deliver 95% of
new homes built for sale each year and a significant proportion of Affordable Housing. Through Homes for
Scotland, we engage with the Scottish Government, local government and utility companies. Any direct
contact with the Members of Scottish Parliament (MSPs) is governed by the Lobbying (Scotland) Act 2016
and we comply with all requirements of that legislation.
Communities: For individual projects, we work with local communities as part of the planning process. Any
new development that has more than 50 homes or covers two hectares requires us to hold two community
consultations. These events allow members of the local community to gather information on the proposed
development, ask questions and provide their feedback on the proposals. We can then reflect any comments
within our applications. To strengthen this engagement, Springfield has committed to also hosting an online
session to increase accessibility to interested households unable to attend in person, for example those with
caring responsibilities. In addition, building upon our existing engagement with schools, for each major
planning application we will offer a local primary school a visit to feed into the curriculum and raise awareness
of sponsorship opportunities that may be available.
Environment: Alongside this report, we annually publish an update to our ESG Strategy: Environment and
People. A Committee of the Board for ESG meets regularly to monitor progress against the ESG Strategy
with the CEO as Chairman.
4.
Embedding Risk Management
Springfield operates processes to identify, measure, manage and monitor those risks which impact the
Group’s business. The focus of our risk management framework is to ensure we are managed in a
sustainable and controlled way within our risk tolerance. Material risks and control matters are reported to
the Board via regular reports from the Group’s senior executive team who in turn meet on a regular basis
with risk and control issues being discussed at those meetings. Given the environment in which it operates,
the Board has a strong focus and attention on Health and Safety issues. It receives a personal report from
the CEO on health and safety matters at each meeting and meets regularly with the Group Safety Health
Environment & Quality (SHEQ) Director so matters can be discussed directly.
The Board also maintains a system of internal controls to safeguard shareholders’ investment and assets.
The Board is responsible for reviewing its effectiveness on an ongoing basis. Annual budgets are prepared,
and detailed management reports are presented to the Board and used to monitor financial performance and
compliance with the Group’s policies and procedures. All controls are covered including financial and
operational controls to manage risk. Board meetings are also used to consider the Group’s major risks. All
potential areas of financial risk are regularly monitored and reviewed by Directors and management and
preventative or corrective measures are taken as necessary.
SPRINGFIELD PROPERTIES PLC
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CORPORATE GOVERNANCE
QCA CODE COMPLIANCE (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
4.
Embedding Risk Management (continued)
As outlined in our Company Overview and Risk section on page 14, we are accredited in ISO 9001 and
14001 and aim to secure ISO 45001 within the 2024/25 financial year to support our continued work towards
an accredited Integrated Management System (IMS).
5.
Maintaining a Well-Functioning Board
The skills and experience of the Board are set out in their biographical details on pages 37-38. All Directors
receive regular and timely information on the Group’s operational and financial performance. Relevant
information is circulated to the Directors in advance of meetings. The Board meets at least bi-monthly. The
non-executive directors time commitment is approximately 20 days a year to attend to Board matters.
The Board consider Colin Rae and Nick Cooper to be independent Directors for the purpose of the QCA
Code. From 1 September 2024, Matthew Benson will have completed 13 years’ service as a Director. Having
considered Matthew’s independence in the context of the QCA Code, the Board is satisfied that Mr Matthew
Benson will remain independent notwithstanding his length of service.
Andrew Todd, as Company Secretary, attends all Board meetings. Andrew is a solicitor qualified in Scotland
and ensures Board and committee meetings are conducted in accordance with all relevant legal and
regulatory requirements. Andrew also attends all audit and nomination committee meetings. Erin Grant, a
solicitor qualified in Scotland, attends all ESG and remuneration committee meetings.
One third of the Directors retire annually in rotation in accordance with Springfield's articles of association.
This enables the shareholders to decide on the election of the Board.
During the period, Roger Eddie retired as a Non-Executive Director.
6.
Director Skills and Capabilities
As mentioned under principle 5, all Directors and their professional experience, are set out on pages 37-38.
The skills, experience and knowledge of each Director gives them the ability to constructively challenge
strategy and decision making and scrutinise performance. All Directors are offered appropriate coaching and
training to develop their knowledge and ensure they remain up to date in relevant matters for which they have
responsibility as a member of the Board. During this year, the Directors received refresher training in
Director’s duties from Pinsent Masons.
All members of the Board bring relevant sector experience through their extensive and varied careers
throughout the housing, financial, consulting, and legal sectors. The Board believes that its members possess
the required qualities and skills necessary to effectively oversee and execute the Group’s strategy.
7.
Evaluation of Board Performance
The Board understand the importance of Board performance evaluation. The formal review process that was
due to be undertaken in the financial year 2023/24 was delayed given the challenging market conditions
experienced across the industry in the last 12 months. Assuming more normalised market conditions return
this year, the review will be carried out and led by the Chairman and the Group’s HR Director.
8.
Corporate Culture
The Board believes that everyone has the right to a decent home. There is a pressing need for good quality
housing in Scotland which is evidenced by the Housing Emergency declared by the Scottish Government in
the period. Where this need is not met, Springfield aims to provide high quality homes for people who need
them across all tenures: homes for private sale, affordable homes for councils or housing associations and
homes for the PRS.
Dedication to customers is at the heart of the Springfield culture. Customer satisfaction statistics are an
integral part of how we manage our business and incentivise our key people and the satisfaction statistics
for each brand are shared at every Board meeting.
SPRINGFIELD PROPERTIES PLC
42
CORPORATE GOVERNANCE
QCA CODE COMPLIANCE (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
9.
Maintaining Good Governance
The Board recognises the importance of applying sound governance principles in the successful running of
the Group. The Chairman and the Board takes responsibility for ensuring the Group maintains appropriate
corporate governance practices. In addition, the Chairman and CEO take responsibility for obtaining
feedback from key stakeholders.
Springfield operates processes to identify, measure, manage and monitor risks which impact the Group’s
business within acceptable limits identified by the Board. Further details on our approach to risk are set out
in response to principle 4 above.
The Board is supported by the Audit, Remuneration, Nomination and ESG committees.
The Audit Committee is responsible for determining and reviewing matters relating to the financial affairs of
the Group. The Audit Committee examines reports received from management and the Group’s auditor in
relation to the financial statements, as well as the internal control systems utilised throughout the Group.
The Remuneration Committee reviews and sets the terms and conditions of the Directors’ appointment, along
with their remuneration and benefits package and makes recommendations to the Board in relation to the
allocation of share options to employees under our Share Plans. The Remuneration Committee meets at
least three times a year.
The Nomination Committee’s role is to consider the selection and re-appointment of Directors, and make
recommendations for the nominations of candidates to fill vacancies on the Board. The Nomination
Committee also regularly reviews the structure, size and composition of the Board, providing
recommendations for change where appropriate.
The Environmental, Social and Governance (ESG) Committee oversees the implementation of the Group’s
overall ESG strategy. The Committee also monitors current and emerging issues which may impact the
business, performance or image of the Company. Additionally, the Committee studies investor feedback and
oversees the Company’s reporting and disclosure with regard to ESG matters. The Committee makes
recommendations to the Board concerning any policies, practices or disclosures which need adjusted in order
to improve the performance with regard to ESG matters and adapt to an ever-evolving market.
Further information on the Audit and Remuneration Committees can be found in the Audit and Remuneration
Committees’ reports on pages 45-55.
10.
Communicating Governance and Performance
The Group recognises the importance of maintaining a good relationship with shareholders and stakeholders,
communicating to them through the Annual and Half-Year Reports, the Annual General Meeting (AGM), bi-
annual presentations and other trading updates. These updates, along with wider business news, are shared
on the Springfield Group website.
Results from the AGM are announced to the market and displayed on the Group’s website after the meeting.
Andrew Todd
Company Secretary
16 September 2024
SPRINGFIELD PROPERTIES PLC
43
CORPORATE GOVERNANCE
SECTION 172 STATEMENT
FOR THE YEAR ENDED 31 MAY 2024
The Companies (Miscellaneous Reporting) Regulations 2018 (2018 MRR) require Directors to explain how
they considered key stakeholders’ interests, and the broader matters set out in Section 172(1) (a) to (f) of the
Companies Act 2006 (S172) when performing their duty. In particular, the Directors’ consider stakeholders’
interests which may affect the long-term success of the company.
This S172 statement explains how the Directors:
•
engaged with employees, suppliers, customers and others; and
•
considered how principal decisions were taken during the financial year to reflect employee
interests; the need to foster business relationships with suppliers; and the effect on customers and
others.
The S172 statement focuses on matters of strategic importance to the Group, and the level of information
disclosed is consistent with the size and the complexity of the Group’s businesses. Further information about
the Directors’ engagement with key stakeholders is set out on pages 39 to 40.
S172 Statement by the Springfield’s Directors
After due and careful consideration of the requirements set out in S172, and having regard to long-term
consequences and the interests of stakeholders in relation to Board decision-making, the Directors, during
the financial year ended 31 May 2024, have acted in a way that they consider, in good faith, would be most
likely to promote the success of the Company for the benefit of its members as a whole.
General confirmation of Directors’ duties
Springfield’s Board of Directors has a clear framework for determining the matters within its remit and has
approved reference terms for matters delegated to its committees. Certain financial and strategic thresholds
have been set, to identify matters requiring Board consideration and approval. The reference terms,
thresholds and decision-making processes are reviewed and approved annually by the main Board.
All Directors upon joining Springfield are provided with guidance covering regulatory requirements of their
role, including, but not limited to, S172. Further training is undertaken annually. The Directors received
refresher training on directors’ duties from Pinsent Masons in October 2023.
Board decision-making is predicated on the appropriateness of information provided to Directors, which is
subject to review as part of the wider Board evaluation process. In particular, the Company Secretary ensures
that Board materials are assessed as to their suitability in relation to assisting and facilitating Directors'
decision-making in accordance with S172. In addition, the Company Secretary prepares an annual reference
bible for all reference terms, financial decision making processes, risk management and decision making
processes and this is reviewed and debated by the Board to ensure all decision making authority is correctly
allocated, checked and managed.
When making decisions, each Director ensures that he acts in the way he considers, in good faith, would
most likely promote the Group’s success for the benefit of its members, and in doing so has regard (among
other matters) to the issues set out below.
S172(1) (a) “The likely consequences of any decision in the long term”
The Directors understand the business and both the evolving and challenging environment in which it
operates, including the challenges of dealing with energy transition (e.g. the transition away from the use of
gas in private homes for sale) and providing energy efficient homes as detailed in Climate Related Financial
Disclosure section. In particular, this year, the Directors’ focus was on a debt reduction strategy through
reducing overheads and raising cash through the profitable sale of assets from the Group’s landbank. In
taking this decision, the Directors considered the impact of this decision on the Group’s short-term operations
and the Group’s long term aspirations. The Directors considered the impact of its decision on investors and
agreed that such a strategy would have long term benefits as the assets chosen for sale did not affect
immediate operational sites and forecasts.
SPRINGFIELD PROPERTIES PLC
44
CORPORATE GOVERNANCE
SECTION 172 STATEMENT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
S172(1) (b) “The interests of the Company’s employees”
The Directors recognise that the Group’s employees are fundamental and core to the Group’s business
model and the safe delivery of its strategic ambitions. The success of our business depends on attracting,
retaining, developing and motivating talented employees. The Directors consider and assess the implications
of relevant decisions on employees and the wider workforce. The Directors seek to ensure that all Group
companies remain a responsible employer, including with respect to pay and benefits, fairness (including
gender pay gap reporting, diversity, health and safety issues, and the workplace environment. The Directors
regularly engage with employees and the wider workforce (a summary of engagements is provided on pages
39-40). This year Springfield’s Chairman and the Chief Executive met with employees from offices and
departments. They held 16 meetings in Glasgow, Larbert, Elgin and Inverness. This series of meetings
offered the opportunity to discuss the Group’s strategy directly with employees and to gain valuable feedback.
S172(1) (c) “The need to foster the Company’s business relationships with suppliers, customers and
others”
Delivering the Group’s strategy requires strong mutually beneficial relationships with customers, contractors,
suppliers, the Scottish Government, local authorities, and other partners for social housing. The CEO
provides a comprehensive update to the Board on material business and external developments at each
board meeting. These include: i) a report on safety performance; ii) significant operational updates; and iii)
political or regulatory developments. The Board also receives bi-monthly operational reports from each of the
Group Directors, including reports on health & Safety, environment, commercial purchasing, HR, corporate
communications, architectural, engineering and legal. Springfield’s Chief Executive is a Director of Homes
for Scotland, which represent over 200 housebuilders and organisations involved in the housebuilding
industry in Scotland. This appointment provides invaluable opportunities for publicly available market
intelligence on the housing market and the challenge to build more homes in Scotland.
S172(1) (d) “The impact of the Company’s operations on the community and the environment”
The CEO provides a comprehensive update to the Board on the Group’s engagement with community and
other groups at each Board meeting. Further information on engagement with stakeholders can be found on
pages 39 to 40. This year, the Board, as part of its debt reduction strategy, agreed the significant sale of land
at Durieshill to Barratt Developments Plc. This sale represented an opportunity to deliver on the Group’s
commitment to start development of the Durieshill village, a new community near Stirling of 3,000 homes. As
one of the largest housebuilding projects in Scotland, the Directors were keen to ensure that the project
would be an exemplar project for community engagement and for environmental standards, particularly in
light of the Scottish Government’s push to transition away from gas as a heating supply. The Directors, in
consultation with its legal and land teams, agreed a strategy which priorities working with Stirling Council to
develop the site with Barratt Developments Plc and to work with Barratt Developments Plc to deliver
infrastructure in a way which supports the Group’s environmental aims.
S172(1) (e) “The desirability of the Company maintaining a reputation for high standards of business
conduct”
The Board follows the QCA code of conduct and periodically reviews and approves clear frameworks, such
as its Modern Slavery Statement and Tax Statement, to ensure that high standards are maintained.
S172(1) (f) “The need to act fairly as between members of the Company”
After weighing up all relevant factors, the Directors consider which course of action best enables delivery of
our strategy in the long-term interests of the Company, taking into consideration the effect on stakeholders.
In doing so, the Directors act fairly as between the Company’s members.
Andrew Todd
Company Secretary
16 September 2024
SPRINGFIELD PROPERTIES PLC
45
CORPORATE GOVERNANCE
AUDIT COMMITTEE REPORT
FOR THE YEAR ENDED 31 MAY 2024
Statement from the Chairman of the Audit Committee
On behalf of the Board, I am pleased to present the Audit Committee Report for the year to 31 May 2024.
This report provides shareholders with an overview of the activities carried out by the Committee during the
year. The Committee ensures the financial performance of the Group is properly measured and reported.
Committee Members
The Committee is comprised solely of independent Non-Executive Directors, being myself as Chairman and
the other Non-Executive Directors: Nick Cooper and Colin Rae. The Board is satisfied that I have worked
within the financial industry and have significant and relevant experience to chair the Committee.
Responsibilities
The responsibilities and activities of the Committee include determining and examining matters relating to
the financial affairs of the Group including the terms of engagement of the Group’s auditor and, in consultation
with the auditor, the scope of the annual audit. It receives and reviews reports from management and the
Group’s auditor relating to the half yearly and annual financial statements and the accounting and internal
control and risk management systems in use throughout the Group, reviewing the Group’s overall risk
appetite and strategy and monitors, on behalf of the Board, current risk exposures. The Committee monitors
the integrity of the financial statements produced by the Group and makes recommendations to the Board
on accounting policies and their application. The Committee receives reports from compliance functions
within the Group and is responsible for reviewing and approving how the Group seeks to comply with its
regulatory obligations. The Committee also ensures that the arrangements for employees and contractors to
raise concerns confidentially about possible wrongdoing in financial reporting (or other matters) are
proportionate and allow for independent investigation. The duties of the Committee are set out in its terms of
reference. These are regularly reviewed to ensure they remain applicable and up-to-date with legislation,
regulation and best practice.
Meetings
In the year to 31 May 2024, the Committee met four times. The meetings cover the planning of the statutory
audit and review of the Group’s full year results prior to Board approval and to consider the external auditor’s
detailed reports. In the year to 31 May 2024 the Chief Financial Officer attended all Committee meetings.
Internal Audit
The Group does not currently have an internal audit function. In 2022 – 2023, as a result of appointing a new
Chief Financial Officer, the Group paused the recruitment of a senior manager to lead this function until a full
review of the finance team could be carried out. This review has been completed with a number of senior
appointments made to the team to support the business. Following these changes, we have not
recommenced the process. The Committee will review the requirements again this year.
Risk Management and internal controls
The Group has a range of internal controls, policies and procedures in place. There is a framework of risk
management within the Group for risk management. The Committee works alongside the Board to review,
and where necessary suggest changes to, the current systems in place.
The Committee had concluded at the last year end that the systems needed to be reviewed and strengthened
to take account of the increased breadth and complexity of the business particularly in the context of two new
acquisitions in a short period of time. As noted above, the Finance Team has made a number of senior
appointments and the Committee is satisfied that given the reduced revenue and size of the business the
current team and systems provide a strengthened level of control.
SPRINGFIELD PROPERTIES PLC
46
CORPORATE GOVERNANCE
AUDIT COMMITTEE REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Anti-bribery
The Group has a zero tolerance anti-bribery and corruption policy in place. The policy is contained within
employee handbooks and provides guidance on what constitutes bribery and corruption. Line managers are
responsible for ensuring employees comply with this policy and maintain the Group’s image and reputation.
The Board is ultimately responsible for ensuring this policy complies with the Group’s legal and ethical
obligations.
External Audit
The Committee monitors the relationship with the external auditor to ensure independence and objectivity at
all times. The Committee also reports to the Board on the independence, objectivity and effectiveness of the
external auditor. Alastair Rae is the signing partner for BDO LLP (BDO).
During the year the external audit service was subject to a competitive tender exercise, following which BDO
were reappointed.
BDO have not carried out any non-audit work during the year. The Group policy is that, where possible,
advisors should be appointed other than the external auditor to perform non-audit work.
External Audit process
BDO prepares an audit plan. This plan sets out the scope and timetable of the audit as well as the areas to
be specifically targeted. The plan is provided to the Committee for approval in advance of the audit. On
completion of the audit, the findings are presented to the Committee by the auditor for discussion. The matters
discussed in relation to this year’s audit are summarised below.
The Chief Financial Officer has regular contact and communication with the auditor during the year. This
allows for any areas of concern or of significance to be raised with the auditor throughout the year.
The table below highlights the issues discussed at the audit close meeting.
SPRINGFIELD PROPERTIES PLC
47
CORPORATE GOVERNANCE
AUDIT COMMITTEE REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Issue
How it was addressed by the Committee
Revenue recognition - Private
Revenue from private housebuilding is recognised
when the house is handed over although the timing
may require management judgement in determining
when ownership has transferred.
As in previous years with a large number of homes
handed over in the final month of the financial year,
the Committee reviewed the revenue recognised
throughout the year and around the year end. The
Committee satisfied itself that there is no issue with
revenue recognition.
Revenue recognition - Affordable
Revenue
from
affordable
housebuilding
is
recognised over time depending on the stage of
completion with cashflows received in excess of
revenue recognised included as payments on
account.
The Group policy is based on stage of completion
being determined by the development cost incurred
as a proportion of the total expected development
cost as this is considered to be in line with the
satisfaction
of
the
underlying
performance
conditions. The committee has kept a close watch
through monthly management accounts and
updates from the relevant Managing Director.
Land sales
The Group has generated significant revenues and
profits from land sales in the year. Costs associated
with land sales can be a judgemental area.
The Committee is satisfied that the land sales were
contracted in the financial year and with the
calculations of the costs associated with the land
sales and resulting profit.
Profit recognition
The Group enters into construction contracts the
performance under which takes place over a period
of time. There is a significant element of judgement
involved in estimations of these construction
contracts surrounding costs to complete and the
overall expected profit margin.
The Committee monitors the cost value report
process and the effectiveness of the internal
controls exercised over these processes.
Valuation of inventories and work in progress
The largest asset on the Group balance sheet is
inventory which includes land and work in progress.
The Group values inventory at the lower of cost and
net realisable value which is dependent on
judgement and estimates of total build and land
costs and future selling prices. The allocation of
inventory to cost of sales also involves estimates
which impact on the timing and amount of profit
margin recognised.
The Committee reviews the work in progress
balances through monthly finance reports and the
cost value report process and is satisfied that the
carrying value of inventories and work in progress
remains appropriate.
Going concern
It is the Directors’ responsibility to make an
assessment of the Group’s ability to continue as a
going concern to support the basis of preparation
for the financial statements.
The Committee is satisfied, based on reviewing the
going concern paper written and financial modelling
undertaken, alongside the extended bank facilities
that the Group has adequate resources to continue
in operation for the foreseeable future and will be
able to operate within the bank facility limits which
are in place.
Matthew Benson
Chairman of the Audit Committee
16 September 2024
SPRINGFIELD PROPERTIES PLC
48
CORPORATE GOVERNANCE
REMUNERATION COMMITTEE REPORT
FOR THE YEAR ENDED 31 MAY 2024
Introduction
This report outlines the Group’s remuneration policy for its Directors and shows how that policy was applied
during the financial year ended on 31 May 2024.
Springfield is not required to comply with Schedule 8 to the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 and is under no obligation to prepare, or seek shareholder
approval of, a directors’ remuneration report. This section of the annual report has, therefore, been prepared
on a voluntary basis and in order to fulfil the relevant requirements of Rule 19 of the AIM Rules for companies.
Committee Members and Meetings
In the period of twelve months to 31 May 2024, the Committee comprised:
•
Nick Cooper (became Chair of the Committee on 31 October 2023);
•
Matthew Benson;
•
Colin Rae; and
•
Roger Eddie (retired as a Non-Executive Director and Chair of the Committee on 31 October 2023).
The individuals who served on the Committee, each of whom is (or was prior to retirement) an independent
Non-Executive Director, had no personal financial interest (other than as a shareholder) in the matters
decided.
Under
its
terms
of
reference
(which
are
summarised
on
the
Group’s
website
at
(www.thespringfieldgroup.co.uk)), the Remuneration Committee is required to meet at least three times a
year.
Committee Responsibilities
The main responsibilities of the Committee are:
•
to set the overall remuneration policy for the Group’s Executive Directors (and certain other senior
employees); and
•
within the terms of that policy, to determine the terms and conditions of employment of those
individuals and the level of their remuneration (including short-term and long-term incentives).
The remuneration of the Non-Executive Directors is determined by the Board as a whole within limits set out
in Springfield’s articles of association. The Non-Executive Directors do not participate in performance related
bonus or share based incentive arrangements.
Remuneration Policy for Executive Directors
The overarching aim of the Group’s remuneration policy is to attract and retain the highest calibre individuals
as Executive Directors and ensure they are appropriately and fairly rewarded for performance in a manner
that is both as straightforward as possible and appropriate for Springfield’s size and stage of development.
During the financial year to 31 May 2024, the overall remuneration package for Executive Directors consisted
of the following elements:
•
Basic Salary;
•
Annual Bonus;
•
Pension Contributions;
•
Long Term Incentive Plan;
•
Participation in an “all employee” SAYE share option scheme; and
•
Other standard benefits.
Further disclosures in relation to each of the above elements are provided below.
SPRINGFIELD PROPERTIES PLC
49
CORPORATE GOVERNANCE
REMUNERATION COMMITTEE REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Basic Salaries
Increases effective from 1 June 2023
Each Executive Director receives a base salary, the level of which reflects the particular individual’s
experience and performance, the nature and complexity of their work and the market in which the Group
operates.
The Committee undertakes a standard review of the Executive Directors’ salaries on an annual basis, with
the Committee’s current policy being that any increases awarded to Executive Directors as part of this
process should normally reflect those applied to the wider workforce. Any such increases typically take effect
on 1 June each year.
With effect from 1 June 2023, the annual rates of base salaries for the Executive Directors who were in post
at that time were set at:
•
Sandy Adam - £157,526; and
•
Innes Smith - £315,053.
The above increases represented an uplift of 3% from the annual rates of salaries that were paid to the
Executive Directors at the end of the financial year to 31 May 2023. This reflected the average annual
increase that was awarded to the broader workforce at that time.
Base salary for the new Chief Financial Officer
Iain Logan assumed the role of Interim CFO on 13 March 2023 and was appointed Chief Financial Officer on
12 July 2023; he subsequently became a Director of the Company on 26 July 2023.
On his appointment as Chief Financial Officer, Iain’s base salary was fixed at an annual rate of £190,000.
This was below the level paid to his predecessor, Michelle Motion, whose annual base pay was £230,749 at
the point she ceased to be a Director on 10 March 2023.
Voluntary decreases effective from 1 October 2023
With effect from 1 October 2023, and in order to reflect the economic factors impacting the Company at that
time, each of Sandy Adam, Innes Smith and Iain Logan voluntarily agreed to a salary reduction of 10%.
Following the above decreases, the annual rate of base salaries for the current Executive Directors were as
follows:
•
Sandy Adam - £141,774;
•
Innes Smith - £283,547; and
•
Iain Logan - £171,000.
Annual Bonus
Under the Group’s annual bonus scheme for Executive Directors (other than Sandy Adam who does not
participate in this arrangement), individuals have the opportunity to receive a cash award that is linked to the
achievement of specified targets that are aligned to the Group’s corporate plan for the period in question.
For each year of the scheme’s operation, the Committee specifies a maximum opportunity (as a percentage
of salary) for each participant.
In recent years, the maximum bonus opportunities for the CEO and CFO have been set at 125% of salary
and 100% of salary respectively, with the actual amount of bonus earned by each individual being determined
by reference to measures linked to profit before tax, return on capital employed, gross margin and customer
satisfaction performance.
SPRINGFIELD PROPERTIES PLC
50
CORPORATE GOVERNANCE
REMUNERATION COMMITTEE REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Annual Bonus (continued)
However, given the circumstances that existed during the financial year to 31 May 2024, the Committee
elected to operate a revised bonus structure for the period which was intended to:
•
incentivise and reward the achievement of targets which were critical to the success of the business
at a challenging phase of its development;
•
be affordable; and
•
ensure that it did not result in an inappropriate level of reduction to the Company’s profit figure.
In light of the above, the Executive Directors’ bonus structure for the financial year to 31 May 2024 was based
on only two measures, namely debt reduction and profit before tax, and operated as follows:
•
in the event that the Company’s debt figure at the end of the period was greater than £55 million,
no bonus would be paid;
•
where debt was equal to or lower than £55 million, bonuses would be awarded to the Executive
Directors by reference to the amount by which the Company’s adjusted profit before tax for the
financial year exceeded £10 million; and
•
the maximum bonus opportunities for the CEO and CFO were reduced to 52% of salary and 42%
of salary respectively.
Applying the above structure to the Company’s financial outturn for the year resulted in Innes Smith and Iain
Logan earning bonuses equal to 20.9% and 16.7% of their year-end salary respectively. The quantum of
these bonuses was then subject to a further review by the Committee in order to assess whether they were
fair and reasonable in the context of the Company’s overall performance during the financial year. The
conclusion reached was that the amounts to be paid to the CEO and CFO were appropriate in the
circumstances.
It is envisaged that, for the financial year to 31 May 2025, the bonus arrangement for the Executive Directors
will revert to a structure that is more consistent with earlier years; the maximum opportunities for the CEO
and CFO will also return to the normal levels of 125% of salary and 100% of salary respectively.
Pensions
During the year, the Group made contributions to pension plans for the Executive Directors. These
contributions were at a rate of 5% of basic salary in respect of Sandy Adam, and at the rate of 10% of basic
salary in respect of both Innes Smith and Iain Logan. (For the avoidance of doubt, the rate of pension
contribution payable to Innes Smith and Iain Logan is equal to the amount paid to the wider senior employee
population.)
Long Term Incentive Plan
Introduction
As part of the process surrounding the Group’s admission to AIM in October 2017, the following plans were
adopted in order to allow share-based incentives to be provided to the Executive Directors and other senior
managers:
•
The Springfield Properties Plc Company Share Option Plan (the “CSOP”); and
•
The Springfield Properties Plc Employee Share Option Plan (the “ESOP”).
The CSOP and the ESOP are relatively straightforward arrangements under which options over the
Company’s shares can be granted to selected employees of the Group (including Executive Directors).
These options normally vest after three years and, on exercise, require participants to pay a price equal to
the market value of a share on the date they were originally granted. Following the introduction of the new
performance share plan in 2020 (see below) no further options have been granted to Executive Directors
under the CSOP or ESOP and there is no current intention to grant awards under either of those
arrangements to Executive Directors in the future.
SPRINGFIELD PROPERTIES PLC
51
CORPORATE GOVERNANCE
REMUNERATION COMMITTEE REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Long Term Incentive Plan (continued)
As explained in previous reports, the Springfield Properties Plc Performance Share Plan (the “PSP”) was
adopted by the Board on 9 January 2020 in order to replace the CSOP and ESOP. It allows for the grant of
conditional rights to acquire shares (in the form of “nominal value” options) that will ordinarily vest on the third
anniversary of grant, subject to continued employment (although “good leaver” provisions can apply) and
only to the extent that specified performance measures are satisfied. Once vested, a PSP award will usually
remain capable of being exercised until the 10th anniversary of grant. Standard “malus” and “clawback”
provisions also apply.
Given the size of his existing shareholding in the Group, Sandy Adam does not currently participate in any
of the above long-term incentive plans.
Vesting of awards held by Executive Directors during the year to 31 May 2024
On 31 May 2023, the three-year performance period applicable to the PSP award granted to Innes Smith on
30 October 2020 came to end. As soon as reasonably practicable thereafter, the Committee carried out its
formal assessment of the extent to which the relevant conditions (which related to the Company’s adjusted
basic earnings per share (”EPS”) and its net debt / EBITDA ratio) had been met.
The following table contains further information relating to the relevant performance conditions and sets out
details of the outturn from the Committee’s above noted assessment:
Measure 1
Weighting
(as a % of total shares under award)
Vesting achieved as a result of
performance against specific measures
over the performance period
(as a % of total shares under award)
Innes Smith
Innes Smith
EPS 2
75%
15.60%
Net Debt / EBITDA 3
25%
16.67%
Aggregate vesting percentage = (a)
32.27%
Total number of shares under award = (b)
202,000
No. of shares over which award vested = (a) x (b)
65,178
Notes:
1 For both the EPS and Net Debt / EBITDA measures, the Committee specified, for each of the financial years in the three-year
performance period, a sliding scale of achievement (between threshold and maximum) which was used to determine the extent
to which the relevant part of the award vested.
2 In terms of the EPS measure, the maximum level of performance for the year ended 31 May 2021 (being 12.1p) was achieved
and, for the year ended 31 May 2022, performance was between threshold level (14.8p) and maximum (15.7p). However, the
threshold level for the year to 31 May 2023 (17.2p) was not met. As a result, 15.6% of the total number of shares under award
vested in respect of the EPS element.
3 In terms of the Net Debt / EBITDA measure, the maximum level of performance for both the years ended 31 May 2021 and 31
May 2022 (being ratios of 2.34 and 1.67 respectively) were achieved. However, the threshold level for the year to 31 May 2023
(being a ratio of 1.31) was not met. As a result, two thirds of the Net Debt / EBITDA element vested (being 16.67% of the total
number of shares over which the award subsisted).
SPRINGFIELD PROPERTIES PLC
52
CORPORATE GOVERNANCE
REMUNERATION COMMITTEE REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Long Term Incentive Plan (continued)
The 30 October 2020 award held by Innes Smith subsequently vested and became exercisable in respect of
the above number of shares on 30 October 2023, being the third anniversary of its date of grant. For the
avoidance of doubt, the part of his award that did not vest on this date immediately lapsed.
Exercises by Executive Directors during the year to 31 May 2024
On 21 July 2023, Innes Smith exercised the balance of his January 2020 PSP option over 10,648 shares.
The exercise price payable under this option was 0.125p per share and the closing share price on the date
of exercise was 70.0p. Innes Smith elected to retain all the shares acquired as a result of his exercise.
The above award was granted with the benefit of “dividend equivalent” rights (being an entitlement to receive
additional sums on its exercise equal to the amount of dividends declared on the acquired shares during the
period commencing on the date of grant and ending on the vesting date). This resulted in a further cash
payment of £1,485 being paid to Innes Smith on his award exercise. Details of this amount are included in
the remuneration table on page 53.
Grants made to Executive Directors during the year to 31 May 2024
In last year’s Remuneration Committee report, it was explained that the Committee was reviewing its
previously stated practice of granting PSP awards to Executive Directors once every three years, with the
first such grant occurring on 22 December 2021.
The conclusion reached by the Committee was that, for a variety of reasons (including the recent changes
to the Company’s senior management team), it would revert to a more standard approach of making annual
grants to the senior management team, including the Executive Directors.
Given the above change of approach, PSP grants were made to Innes Smith and Iain Logan on 30 October
2023, details of which are included in the table set out on page 54. The performance conditions applicable
to these awards will be assessed following the expiry of the financial year to 31 May 2026 and will require
the achievement of stretching targets relating to earnings per share (75% weighting) and the Company’s net
debt / total assets gearing (25% weighting). The precise terms of these targets are commercially sensitive
but full details will be disclosed following their final assessment by the Committee at the expiry of the
applicable performance period.
Save As You Earn (“SAYE”)
At the same time as establishing the CSOP and ESOP, the Group also adopted the Springfield Properties
Plc SAYE Option Scheme (the “SAYE Scheme”). Under this tax advantaged arrangement, all employees
(including Executive Directors) can be invited to apply for the grant of options over the Company’s shares
that are linked to a three-year savings contract. The price per share payable on the exercise of these options
is set by the Board at the date invitations are issued, but cannot be less than 80% of the market value of a
share on that date.
During September 2023 (and as disclosed in the table set out on page 54), the SAYE Scheme options granted
to Innes Smith and Iain Logan on 29 April 2021 lapsed following their decision to cease paying monthly
contributions to the linked savings contract.
No further options were granted under the SAYE Scheme during the year.
SPRINGFIELD PROPERTIES PLC
53
CORPORATE GOVERNANCE
REMUNERATION COMMITTEE REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Remuneration in the year
During the year to 31 May 2024, the Directors received the following remuneration:
Basic
salary/fees1
Annual
bonus2
Taxable
benefits3
Pension
contributions
Option
gains4
Other
payments5
2024
Total
2023
Total
£000
£000
£000
£000
£000
£000
£000
£000
Executive Directors
Sandy Adam
147
-
9
7
-
-
163
168
Innes Smith
294
59
3
29
7
1
393
346
Iain Logan6
175
29
2
17
-
-
223
N/A
Non-Executive
Directors7
Matthew Benson
42
-
-
-
-
-
42
44
Nick Cooper
42
-
-
-
-
-
42
44
Colin Rae
42
-
-
-
-
-
42
44
Former Director8
Roger Eddie
19
-
-
-
-
-
19
44
761
88
14
53
7
1
924
690
Notes:
1Additional information relating to the salaries paid to the Executive Directors during the financial year to 31 May 2024 is set out
on page 49.
2 Further details of the Company’s annual bonus scheme for the financial year to 31 May 2024 are set out on pages 49 to 50.
3 The taxable benefits figure in the above table for each of the Executive Directors relates to a range of benefits provided by the
Group including a car allowance, life & health assurance and gym allowance.
4 For Innes Smith, the gains made on the exercise of options have been calculated by deducting the applicable exercise price
payable by the individual from the market value of a share on the date of exercise and then multiplying that amount by the number
of shares acquired. Further information in relation to the exercises that occurred during the financial year to 31 May 2024 are set
out on page 52.
5 The other payments made to Innes Smith during the financial year to 31 May 2024 relate to the “dividend equivalent” amount
he received in connection with the exercise of his PSP award on 21 July 2023. Further details in relation to this payment are set
out on page 52.
6 Although Iain Logan only became a Director on 26 July 2023, the above table includes details of all remuneration received by
him from the Company during the financial year.
7 The annual fee payable to a Non-Executive Director for the year to 31 May 2024 was originally set by the Board at £45,323.
However, in order to ensure consistency with the position of the Executive Directors, each of the Non-Executive Directors
voluntarily agreed to a fee reduction 10% with effect from 1 October 2023. Following the application of this reduction, the annual
fee rate for Non-Executive Directors was £40,791.
8 Roger Eddie stepped down from his role as Non-Executive Director on 31 October 2023. His fees in the above table reflect the
period from the start of the financial year to the date of departure.
Further details relating to the share options held by the Directors during the financial year to 31 May 2024
are set out below.
SPRINGFIELD PROPERTIES PLC
54
CORPORATE GOVERNANCE
REMUNERATION COMMITTEE REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Share Options and PSP awards
Details of options over the Company’s shares that have been granted to current Executive Directors under the CSOP, ESOP, SAYE Scheme and PSP and which were
outstanding during the year to 31 May 2024 are as follows:
Director
Scheme
No. of
shares
under
option at 1
June 2023
Exercised3
Granted
Lapsed4
No. of shares
under option
at 31 May
2024
Exercise
price
Date of Grant
Date from
which
normally
exercisable
Expiry date
Innes Smith
CSOP
28,301
-
-
-
28,301
106p
16/10/2017
16/10/2020
16/10/2027
ESOP
208,019
-
-
-
208,019
106p
16/10/2017
16/10/2020
16/10/2027
ESOP
257,142
-
-
-
257,142
122.5p
01/10/2018
01/10/2021
01/10/2028
PSP
10,648
(10,648)
-
-
-
0.125p
09/01/2020
09/01/2023
N/A
PSP
202,000
-
-
(136,822)
65,178
0.125p
30/10/2020
30/10/2023
30/10/2030
SAYE
13,793
-
-
(13,793)
-
130.05p
29/04/2021
01/06/2024
N/A
PSP
401,408
-
-
-
401,408
0.125p
22/12/2021
22/12/2024
22/12/2031
PSP
-
-
427,995
-
427,995
0.125p
30/10/2023
30/10/2026
30/10/2033
1,121,311
(10,648)
427,995
(136,822)
1,401,836
Iain Logan
SAYE
13,793
-
-
(13,793)
-
130.05p
29/04/2021
01/06/2024
N/A
PSP
-
-
225,849
-
225,849
0.125p
30/10/2023
30/10/2026
30/10/2033
13,793
-
225,849
-
225,849
SPRINGFIELD PROPERTIES PLC
55
CORPORATE GOVERNANCE
REMUNERATION COMMITTEE REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Notes:
1 Details of the performance conditions that were assessed by the Remuneration Committee in connection with the vesting of the
options granted under the PSP on 30 October 2020 are provided on page 51. For other PSP options outstanding during the year,
high level details of the applicable performance conditions are set out in the Remuneration Committee’s report for the year in which
such awards were granted. Options granted under the CSOP, ESOP and SAYE Scheme are not subject to performance conditions.
2 Awards granted under the PSP carry “dividend equivalent” rights that entitle the holder to receive the benefit of any dividends
declared on vested shares during the period from the date of grant to the date of vesting.
3 Further information in relation to the exercise of PSP options by Innes Smith during the financial year to 31 May 2024 are set out
on page 52 above.
4 Further information in relation to the lapse of PSP and SAYE Scheme options that occurred during the financial year to 31 May
2024 are set out on page 52 above.
Directors’ interests in the Company’s shares
Directors’ interests in the Company’s shares are disclosed in the Directors’ Report (page 58).
Compensation to Directors for loss of office
As previously announced, Michelle Motion stepped down from her role as the Company’s Chief Financial Officer
on 10 March 2023 and ceased to be a Director on that same date. Thereafter, Michelle continued as an
employee of the Company until 10 September 2023, being the date on which her contractual six months’ notice
period expired. During this notice period, she was placed on garden leave but continued to receive salary and
benefits (including pension contributions) in the normal way. On cessation of her employment, and as disclosed
in last year’s Remuneration Committee report, Michelle was paid a sum of £20,000 in settlement of any claims
arising in connection with the termination of her employment.
On the basis that Michelle was not a Director of the Company at any time during the financial year to 31 May
2024, she has not been included in any of the tables set out on pages 53 and 54.
Nick Cooper
Chairman of the Remuneration Committee
16 September 2024
SPRINGFIELD PROPERTIES PLC
56
CORPORATE GOVERNANCE
DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 MAY 2024
The Directors present their annual report and the audited financial statements of the Group for the year ended 31
May 2024.
Principal Activity and Business Review
This information is included within the Strategic Report above, under the Amendment to the Companies Act
2006 of s.414C(2a).
Directors
The Board comprised the following Directors who served throughout the year and up to the date of this report:
Name
Position
Sandy Adam
Executive Chairman
Innes Smith
Chief Executive Officer
Iain Logan
Chief Financial Officer (appointed 26 July 2023)
Roger Eddie
Non-Executive Director (retired 31 October 2023)
Matthew Benson
Non-Executive Director
Nick Cooper
Non-Executive Director
Colin Rae
Non-Executive Director
Results and Dividends
The results for the year are set out on page 72.
No interim dividend was declared during the year. The Board is proposing a final dividend of 1p per ordinary
share (2023: no dividend paid).
Employee Consultation
The Group’s policy is to consult and discuss with employees’ representatives matters likely to affect their
interests.
The Group places considerable value on the involvement of its employees and has continued to keep them
informed on matters affecting them as employees and on various factors affecting the performance of the
Group.
Equality, Diversity and Inclusion
The Group is committed to valuing and promoting diversity in all areas of recruitment, employment, training,
and promotion. We recognise our legal obligations under the Equality Act 2010 and work towards an
environment where all employees can develop their potential, regardless of: Age, Race, Disability, Religion,
Gender reassignment, Sex, Marriage and civil partnership, Sexual orientation, Pregnancy and maternity.
Nobody should receive less favourable treatment or be disadvantaged on any of the above grounds.
Going Concern
In determining the appropriate basis of preparation of the Financial Statements, the Directors are required to
consider whether the Group can continue to meet its liabilities and other obligations for the foreseeable future.
The Group’s business activities, together with factors that the Directors consider are likely to affect its
development, financial performance and financial position, are set out in the Strategic Report on pages 4 to
36.
SPRINGFIELD PROPERTIES PLC
57
CORPORATE GOVERNANCE
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Going concern (continued)
The material financial and operational risks and uncertainties that may affect the Group’s performance
and their mitigation are outlined on pages 14 to 16, and financial risks including liquidity, market, interest and
capital risks are outlined in Note 29 to the Financial Statements.
The Directors have a reasonable expectation 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 signing these financial
statements. The Directors therefore consider it appropriate to adopt the going concern basis in preparing
the financial statements.
Further details regarding the adoption of the going concern basis can be found in Note 2.4 of the
consolidated financial statements.
Disclosure of Information to the Auditor
In the case of each of the persons who are Directors of the Company at the date when this report is approved:
•
so far as each Director is aware, there is no relevant audit information of which the Group’s
auditor is unaware; and
•
each of the Directors has taken all steps that they ought to have taken as a Director to make
themselves aware of any relevant audit information and to establish that the auditor is aware
of that information.
This information is given and should be interpreted in accordance with the provisions of Section 418 of the
Companies Act 2006.
Board of Directors
The Group supports the concept of an effective Board of Directors leading and controlling the Group. The
Board of Directors is responsible for approving Group policy and strategy. It meets regularly and has a
schedule of matters specifically reserved to it for decision. All Directors have access to advice from
independent professionals at the Group's expense. Training is available for all Directors as necessary.
Biographical details are set out on pages 37 to 38.
Internal Control
The Directors acknowledge that they are responsible for the Group's system of internal control and for
reviewing the effectiveness of these systems. The risk management process and systems of internal control
are designed to manage rather than eliminate the risk of the Group failing to achieve its strategic objectives.
It should be recognised that such systems can only provide reasonable and not absolute assurance against
material misstatement or loss. The Group has well established procedures which are considered adequate
given the size of the business.
The Group maintains directors’ and officers’ liability insurance cover for its directors and officers. The Group
has made available qualifying third party indemnity provisions (as defined in the Companies Act 2006) for
the benefit of its directors during the year.
Auditor
The Board as a whole considers the appointment of the external auditor and their independence, specifically
including the nature and scope of non-audit services provided.
SPRINGFIELD PROPERTIES PLC
58
CORPORATE GOVERNANCE
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Remuneration
The remuneration of the Executive Directors has been fixed by the Remuneration Committee as a whole.
The Board seeks to provide appropriate reward for the skill and time commitment required so as to retain the
right calibre of Director at a cost to the Group which reflects current market rates.
Details of Directors’ fees and of payments made for professional services rendered are set out in the
Remuneration Report on page 49.
Directors’ Interests in Shares
Name of Director
Number of
ordinary
shares
% of ordinary share
capital and voting
rights
Sandy Adam
- Direct
22,422,584
18.9%
- Indirect
Innes Smith
14,999,236
12.6%
- Direct
845,345
0.7%
- Indirect
151,029
0.1%
Nick Cooper
- Indirect
14,895
0.0%
Matthew Benson
40,802
0.0%
Iain Logan
30,000
0.0%
Colin Rae
20,000
0.0%
38,523,891
32.5%
Financial Risk Management Objectives and Policies
Details of the Group’s financial risk management objectives and policies are set out in Note 29 to these
consolidated financial statements.
Strategic Report
The Group has chosen in accordance with the Companies Act 2006, s.414C(11) to set out in the Group’s
Strategic Report information required by Large and Medium-Sized Companies and Groups (Accounts and
Reports) Regulations 2008, Sch. 7 to be contained in the Directors’ Report. This includes information on future
developments of the Group.
SPRINGFIELD PROPERTIES PLC
59
CORPORATE GOVERNANCE
STREAMLINED ENERGY AND CARBON REPORTING
FOR THE YEAR ENDED 31 MAY 2024
As of 31 May 2024, the Group’s energy usage and associated greenhouse gas emissions for the financial
year 1 June 2023 to 31 May 2024, as compared to the previous financial year, were as follows:
Scope
Activity type
2024
energy
use kWh
2024 tCO2e
2023
energy
use kWh
2023 tCO2e
Scope 1
Stationary
combustion
703,036
128.61
616,628
118.70
Mobile
combustion
7,467,974
1,840.96
11,715,929
2,816.02
Total Scope 1
8,171,010
1,969.57
12,332,557
2,934.72
Scope 2
Purchased
electricity
–
location based
2,033,347
421.05
3,881,343
750.57
Total Scope 1 and 2
10,204,357
2,390.62
16,213,900
3,685.29
Scope 3
Business travel
(grey fleet)
984,250
240.64
1,344,709
333.77
Total for SECR
11,188,607
2,631.26
17,558,609
4,019.06
Number of completions
878
1,301
Intensity ratio (GHG emissions per
homes sold)
3.00
3.09
Energy use and greenhouse gas emissions
The overall energy use has decreased by roughly 36% with approximately 34% decrease in carbon
emissions. This is primarily due to a reduction in operations within the group. For instance, number of homes
completed decreased from 1,301 to 878 across the same period (-33%). The intensity ratio is consistent with
previous years with a slight decrease of 2%. The basis of carbon intensity ratios is disclosed below, with
comparisons to previous financial year.
Homes sold
Total
Private
Affordable
Contracting
FY 2024
878
584
270
24
FY 2023
1,301
866
328
107
SPRINGFIELD PROPERTIES PLC
60
CORPORATE GOVERNANCE
STREAMLINED ENERGY AND CARBON REPORTING (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Energy efficiency
Increasing the use of renewable energy in our property is an important step in our pathway towards net zero.
As the Springfield Group has grown over the years through the acquisition of other housebuilding companies,
a key first step in this pursuit has involved working with a specialist consultant to bring all areas of our
business together under one utility contract to enable better monitoring. In our factories, offices and sites, we
have conducted energy assessments to identify opportunities to reduce energy use. In addition,
36% of our energy currently comes from renewable sources and in the years ahead, plans will be put in place
to increase that proportion towards the 50% commitment by 2026. Our energy consultant is supporting us
with these projects. In the past year, we have also installed additional electric vehicle chargers at our
construction sites to encourage uptake of electric company cars to reduce our scope 1 transport-related
emissions.
Methodology
Our SECR energy use and greenhouse gas emissions data for FY 2024 has been produced internally with
information provided by the Group and reviewed by an external consultancy with expertise in this area. The
additional Scope 3 data provided for Climate related disclosure was produced externally by the same
consultancy using data provided by the Group.
Data was collated from across the Group and from our suppliers to identify the amount of energy used in our
operations. The Group used the most robust and accurate data source available for each component of its
energy use and carbon emission calculations. Assumptions and estimations were only used when strictly
necessary by means of the most robust data and assumptions available.
Where actual energy consumption data was unavailable, average energy consumption was used as a proxy
for estimation. We do not consider refrigerant losses on our air conditioning units to be material and as such
these are not reported in our emissions data.
For vehicle emissions, the Group analysed fuel card usage, mileage information, expense claims and fuel
invoices and applied the relevant conversion factors published by the UK Government for 2023.
For emissions from fuel used on sites, the quantity of diesel based on litres delivered to site within the financial
period was used as the activity level data. We do not consider train travel to be material and as such this is
not reported in our emissions data.
Greenhouse gas (GHG) emissions were calculated in line with GHG Reporting Protocol – Corporate standard
and reported in line with the UK Government’s Guidance on Streamlined Energy and Carbon Reporting and
mandatory GHG reporting guidance. Emission factors from Department for Energy Security and Net Zero,
and Department for Business, Energy, and Industrial Strategy (2023). Conversion factors were taken from
the UK Government’s conversion factors.
The boundary has been set based upon operational control approach on our business activities and property
portfolio. There is 100% alignment with our financial reporting. 100% of our energy consumption and carbon
emissions are UK based.
SPRINGFIELD PROPERTIES PLC
61
CORPORATE GOVERNANCE
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
FOR THE YEAR ENDED 31 MAY 2024
Directors’ responsibilities
The Directors are responsible for preparing the annual report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law
the Directors are required to prepare the Group and company financial statements in accordance with UK
adopted international accounting standards. Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and
Company and of the profit or loss of the Group for that period.
In preparing these financial statements, the Directors are required to:
•
select suitable accounting policies and them apply them consistently;
•
make judgements and accounting estimates that are reasonable and prudent;
•
state whether they have been prepared in accordance with UK adopted international accounting
standards subject to any material departures disclosed and explained in the financial statements;
and
•
Prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the Group and the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the
company and enable them to ensure that the financial statements comply with the requirements of the
Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and the financial statements are made available
on a website. Financial statements are published on the company’s website in accordance with legislation in
the United Kingdom governing the preparation and dissemination of financial statements, which may vary
from legislation in other jurisdictions. The maintenance and integrity of the Company’s website is the
responsibility of the Directors. The Directors’ responsibility also extends to the ongoing integrity of the
financial statements contained therein.
Sandy Adam
Executive Chairman
16 September 2024
SPRINGFIELD PROPERTIES PLC
62
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SPRINGFIELD PROPERTIES PLC
FOR THE YEAR ENDED 31 MAY 2024
Opinion on the financial statements
In our opinion:
•
the financial statements give a true and fair view of the state of the Group’s and of the Parent
Company’s affairs as at 31 May 2024 and of the Group’s profit for the year then ended;
•
the Group financial statements have been properly prepared in accordance with UK adopted
international accounting standards;
•
the Parent Company financial statements have been properly prepared in accordance with UK
adopted international accounting standards and as applied in accordance with the provisions of the
Companies Act 2006; and
•
the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
We have audited the financial statements of Springfield Properties Plc (the ‘Parent Company’) and its
subsidiaries (the ‘Group’) for the year ended 31 May 2024 which comprise the consolidated profit and loss
account, the consolidated and company balance sheets, the consolidated and company statements of
changes in equity, the consolidated and company statements of cash flow and notes to the financial
statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and UK adopted
international accounting and, as regards the Parent Company financial statements, as applied in accordance
with the provisions of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities under those standards are further described in the
auditor’s responsibilities for the audit of the financial statements section of our report. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remain independent of the Group and the Parent Company in accordance with the ethical requirements
that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as
applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements.
SPRINGFIELD PROPERTIES PLC
63
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SPRINGFIELD PROPERTIES PLC
(CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’
assessment of the Group and the Parent Company’s ability to continue to adopt the going concern basis of
accounting included:
-
understanding the processes relating to the assessment of the appropriateness of the going concern
assumptions for both the Group and Parent Company;
-
analysing the current and forecast performance of the Group, which incorporates the Parent Company,
including working capital requirements, by assessing Directors’ assumptions against market data and
post year end performance;
-
re-performing the Directors’ sensitivity testing and reverse stress testing on Directors’ forecasts over the
going concern period and assessing the likelihood of the scenario occurring and mitigating actions
available to the Board;
-
assessing the financing options that are available, including the utilisation, headroom and expiration
date of the revolving credit facility detailed in note 21;
-
recalculating the existing loan covenants in order to assess compliance over the going concern period;
-
using various external data sources to identify indicators of potential risk at the entity and industry level;
and
-
assessing that the going concern disclosures are appropriate, comply with the reporting standards, and
accurately reflect the Directors’ assessment.
Based on the work we have performed, we have not identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast significant doubt on the Group and the Parent
Company’s ability to continue as a going concern for a period of at least twelve months from when the
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in
the relevant sections of this report
Overview
Coverage
93% (2023: 95%) of Group profit before tax
94% (2023: 96%) of Group revenue
96% (2023: 94%) of Group total assets
Key audit matters
2024
2023
Revenue
recognition
–
construction contracts
Valuation and impairment of
work in progress
Materiality
Group financial statements as a whole
£750,000 (2023: £810,000) based on 5% (2023: 5%) of the
average profit before tax over a three year period (2023: profit
before tax for the period).
SPRINGFIELD PROPERTIES PLC
64
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SPRINGFIELD PROPERTIES PLC
(CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the
Group’s systems of internal control, and assessing the risks of material misstatement in the financial
statements. We also addressed the risk of management override of internal controls, including assessing
whether there was evidence of bias by the Directors that may have represented a risk of material
misstatement.
Significant components were identified with reference to either their contribution to key Group metrics
including profit before tax, revenue and total assets, or the existence of a material balance that is impacted
by key audit matters defined in the Group. Six significant components were identified based on their relative
size and one significant component had specific balances identified as being significant based on risk.
The six significant components identified were, Springfield Properties Plc, Walker Group (Scotland) Limited,
Dawn Homes Limited, Tulloch Homes Limited, Springfield M&M Homes Limited and Argyll Developments
(Scotland) Limited. In addition, land and work in progress balances within Walker Group Springfield Holdings
Limited were identified as being significant. A full scope audit was undertaken on these components by the
Group audit team, who also carried out analytical review procedures on the non-significant components.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) that we identified, including those which had the greatest
effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the
engagement team. These matters were addressed in the context of our audit of the financial statements as
a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
SPRINGFIELD PROPERTIES PLC
65
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SPRINGFIELD PROPERTIES PLC
(CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Key audit matter
How the scope of our audit addressed the
key audit matter
Revenue
recognition –
construction
contracts
Refer
Accounting
policies
Note
2.5 (page 78)
and Note 4 of
the
consolidated
financial
statements
(page 84).
Revenue
from
construction
contracts (affordable-only housing
developments)
is
recognised
based on stage of completion
measured in reference to the costs
incurred as a proportion of total
costs (‘input method’).
Measured stage of completion is
based on actual costs incurred to
date on each project and requires
management
to
forecast
the
estimated total costs required to
complete the development. The
estimation process is inherently
complex
and
significant
management
judgement
is
required. There is also a direct
relationship
between
contract
length and estimation risk where
longer contracts will inherently
have a higher level of estimation
uncertainty.
There is a potential risk of fraud as
revenue could be manipulated
through
management
bias
in
estimating
costs
to complete,
through incorrect allocation of
costs to each development to skew
the
margins
on
individual
developments and through the
posting of manual journals.
Revenue
recognition
on
construction contracts is an area of
focus for our audit in considering
possible areas of management
bias and fraud and therefore we
determined this to be a key audit
matter.
For all defined construction revenue, we
recalculated the revenue to be recognised based
on the stage of completion using the input
method.
We
tested
the
design
and
operating
effectiveness of controls around sub-contractor
procurement,
approval
of
purchases
and
allocation of costs to developments and
performed testing over validity and accuracy of
costs incurred to date.
We performed procedures over a sample of cost
to complete estimates included as part of the
cost value reconciliation (‘CVR’) process. This
included
gaining
an
understanding
of
movements against original appraisals, testing a
sample of estimated costs to complete to
corroboratory evidence and assessing the
forecasting accuracy of prior year CVRs against
projects completed during the year and since
year end.
We performed a review of the most recent CVR’s
available after year end for any indication of
significant margin decline and movement in cost
estimates and, where a margin decline was
noted, challenged whether the reasons for the
decline in margin relate to conditions that existed
at year end and should be factored into the stage
of completion calculation used in determining the
revenue to be recognised in the year. Where
post year end CVR’s were not available we held
discussions
with
quantity
surveyors
and
members
of
operational
management
to
challenge whether any material cost fluctuations
had occurred since year end.
We performed journal entry testing, applying a
particular focus to individually unusual and/or
material manual journals posted to the revenue
account throughout the year. We agreed journals
which met predetermined criteria to supporting
evidence to confirm that the revenue recognised
was appropriate, had an appropriate business
rationale and was in line with the Group’s
accounting policy.
We considered the application of the accounting
standards to the Group’s revenue recognition
policies and practices.
Key observations:
Based on the procedures performed we consider
that the judgements made in estimating the
construction contract stage of completion are
appropriate and that revenue from construction
contracts has been recognised appropriately.
SPRINGFIELD PROPERTIES PLC
66
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SPRINGFIELD PROPERTIES PLC
(CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Key audit matter
How the scope of our audit addressed the
key audit matter
Valuation and
impairment of
work
in
progress
Refer,
Accounting
policies
Note
2.13 (page 80)
and Note 17 of
the
consolidated
financial
statements
(page 92).
The value of work in progress is
the most significant asset on the
balance sheet (page 73). Inventory
and work in progress comprises
land and work in progress in
relation to private housing. The
relevant proportion of land and
work in progress is recognised in
cost of sales upon sale of a unit.
There is inherent complexity and
significant
judgement
in
the
valuation of work in progress as
the correct valuation of each
development project is dependent
on
accurate
cost
allocation,
projected profitability of the overall
development, including forecast
revenue and costs to complete,
and where the work in progress is
for
undeveloped
land,
an
assessment of whether planning
permission will be achieved. Each
of
these
factors
affects
the
valuation of work in progress and
whether there are any indicators of
impairment.
The valuation of work in progress,
the risk of impairment and the
costs recognised in cost of sales
are therefore areas of audit focus
and were determined to be a key
audit matter.
We
tested
the
design
and
operating
effectiveness of controls around sub-contractor
procurement,
approval
of
purchases
and
allocation of costs to developments and
performed testing over validity and accuracy of
costs capitalised to work in progress.
We recalculated the release to cost of sales for
a sample of sites with reference to the total
project margin as referenced in the cost value
reconciliation (CVR).
We performed procedures over the cost to
complete estimates included as part of the CVR
process. This included gaining an understanding
of movements against original appraisals,
testing a sample of estimated costs to complete
to corroboratory evidence and assessing the
forecasting accuracy of prior year CVRs against
projects completed during the year and since
year end.
We
reviewed
management’s
impairment
assessment against estimated costs to complete
and projected margins to assess whether there
was any indication of impairment and checked
that where impairment indicators had been
noted, these had been appropriately considered
and treated. Our review of projected margins
included benchmarking of forecast selling prices
against current trends and recent selling prices.
For a sample of work in progress balances
relating to undeveloped land we obtained
evidence that planning permission had been
achieved and that the prospective development
is estimated to be profitable.
We performed journal entry testing, applying a
particular focus to journals that appeared to be
reallocating costs between projects within cost of
sales and work in progress accounts. We agreed
journals meeting predetermined criteria to
supporting evidence to confirm that the revenue
recognised was appropriate, had an appropriate
business rationale and was in line with the
Group’s accounting policy.
Key observations:
Based on the procedures performed we consider
the judgements made by management in valuing
work in progress are appropriate.
SPRINGFIELD PROPERTIES PLC
67
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SPRINGFIELD PROPERTIES PLC
(CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which misstatements, including omissions,
could influence the economic decisions of reasonable users that are taken on the basis of the financial
statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we
use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly,
misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of
the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating
their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and
performance materiality as follows:
Group financial statements
Parent company financial statements
2024
£m
2023
£m
2024
£m
2023
£m
Materiality
750,000
810,000
740,000
455,000
Basis
for
determining
materiality
5%
of
normalised
profit before tax
calculated over
a three year
period.
5%
of
Profit
before tax at
planning stage
reassessed
based on final
figures
to
confirm
still
appropriate
98%
of
group
materiality
56%
of
Profit
before tax
Rationale for the
benchmark
applied
Principal
consideration
in
assessing
financial
performance of
the business.
Principal
consideration
in
assessing
financial
performance of
the business.
Materiality was set
at 97% of Group
materiality
taking
into consideration
component
aggregation risk.
Materiality was set
at 56% of Group
materiality
taking
into consideration
component
aggregation risk
Performance
materiality
520,000
480,000
510,000
273,000
Basis
and
rationale
for
determining
performance
materiality
Performance materiality is set at
70% of materiality (2023: 60%) to
reflect our assessment of the risk
that the aggregate of uncorrected
and undetected misstatements
exceeds
materiality
for
the
financial statements as a whole.
Performance materiality is set at 70% of
materiality (2023: 60%) to reflect our
assessment of the risk that the aggregate
of
uncorrected
and
undetected
misstatements exceeds materiality for
the financial statements as a whole.
Component materiality
For the purposes of our Group audit opinion, we set materiality for each significant component of the Group,
apart from the Parent Company whose materiality is set out above, based on a percentage of between 6%
and 52% (2023: 21% and 65%) of Group materiality dependent on the size and our assessment of the risk
of material misstatement of that component. Component materiality ranged from £47,000 to £397,000 (2023:
£170,000 to £530,000). In the audit of each component, we further applied performance materiality levels of
70% (2023: 60%) of the component materiality to our testing to ensure that the risk of errors exceeding
component materiality was appropriately mitigated.
SPRINGFIELD PROPERTIES PLC
68
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SPRINGFIELD PROPERTIES PLC
(CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in
excess of £30,000 (2023: £32,000). We also agreed to report differences below this threshold that, in
our view, warranted reporting on qualitative grounds.
Other information
The Directors are responsible for the other information. The other information comprises the information
included in the annual report other than the financial statements and our auditor’s report thereon. Our opinion
on the financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to
read the other information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to
be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we
are required to determine whether this gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are
required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described
below.
Strategic
report
and
Directors’
report
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the Strategic Report and the Directors’ Report for the
financial year for which the financial statements are prepared is consistent with
the financial statements; and
•
the Strategic Report and the Directors’ Report have been prepared in
accordance with applicable legal requirements.
the light of the knowledge and understanding of the Group and Parent Company
and its environment obtained in the course of the audit, we have not identified
material misstatements in the Strategic Report or the Directors’ Report.
Matters
on
which we are
required
to
report
by
exception
We have nothing to report in respect of the following matters in relation to which
the Companies Act 2006 requires us to report to you if, in our opinion:
•
adequate accounting records have not been kept by the Parent Company,
or returns adequate for our audit have not been received from branches
not visited by us; or
•
the Parent Company financial statements are not in agreement with the
accounting records and returns; or
•
certain disclosures of Directors’ remuneration specified by law are not
made; or
•
we have not received all the information and explanations we require for
our audit.
SPRINGFIELD PROPERTIES PLC
69
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SPRINGFIELD PROPERTIES PLC
(CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Responsibilities of Directors
As explained more fully in the directors’ responsibilities statement, the Directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the Directors determine is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or
the Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below:
Non-compliance with laws and regulations
Based on:
•
Our understanding of the Group and the industry in which it operates;
•
Discussion with management, the Audit Committee and other members of those charged with
governance; and
•
Obtaining an understanding of the Group’s policies and procedures regarding compliance with
laws and regulations.
We considered the significant laws and regulations to be the applicable accounting framework, UK tax
legislation and the AIM Listing Rules.
The Group is also subject to laws and regulations where the consequence of non-compliance could have a
material effect on the amount or disclosures in the financial statements, for example through the imposition
of fines or litigations. We identified such laws and regulations to be Companies Act 2006, Corporate and VAT
legislations, Employment Taxes, Health and Safety and the Bribery Act 2020.
Our procedures in respect of the above included:
•
Review of minutes of meeting of those charged with governance for any instances of non-
compliance with laws and regulations;
•
Review of financial statement disclosures and agreement to supporting documentation;
•
Involvement of tax specialists in the audit; and
•
Review of legal expenditure accounts to understand the nature of expenditure incurred.
SPRINGFIELD PROPERTIES PLC
70
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SPRINGFIELD PROPERTIES PLC
(CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk
assessment procedures included:
•
Enquiry with management, the Audit Committee and other members of those charged with
governance regarding any known or suspected instances of fraud;
•
Obtaining an understanding of the Group’s policies and procedures relating to:
o
Detecting and responding to the risks of fraud; and
o
Internal controls established to mitigate risks related to fraud.
•
Review of minutes of meeting of those charged with governance for any known or suspected
instances of fraud;
•
Discussion amongst the engagement team as to how and where fraud might occur in the financial
statements;
•
Performing analytical procedures to identify any unusual or unexpected relationships that may
indicate risks of material misstatement due to fraud; and
•
Considering remuneration incentive schemes and performance targets and the related financial
statement areas impacted by these.
Based on our risk assessment, we considered the areas most susceptible to fraud to be revenue recognition
on construction contracts and valuation and impairment of work in progress.
Our procedures in respect of the above included:
•
assessing whether the accounting policies, treatments and presentation adopted in the financial
statements is in accordance with applicable law and accounting standards and whether there are
instances of potential bias in areas with significant degrees of judgement;
•
in addressing the risk of fraud through management override of controls, testing the
appropriateness of journal entries and other adjustments; assessing whether the judgements
made in making accounting estimates are indicative of a potential bias; and evaluating the
business rationale of any significant transactions that are unusual or outside the normal course of
business;
•
carrying out tests of management controls in certain areas or functions, such as the authorisation
of project costs and allocation of costs incurred to the correct development;
•
vouching balances and reconciling items in management’s key control account reconciliations to
supporting documentation as at 31 May 2024; and
•
carrying out detailed testing, on a sample basis, of material transactions, financial statement
categories and balances to appropriate documentary evidence to verify the completeness,
occurrence and accuracy of the reported financial statements.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement
team members who were all deemed to have appropriate competence and capabilities and we remained
alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements,
recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and
the further removed non-compliance with laws and regulations is from the events and transactions reflected
in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
SPRINGFIELD PROPERTIES PLC
71
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SPRINGFIELD PROPERTIES PLC
(CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of
Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent
Company’s members those matters we are required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the Parent Company and the Parent Company’s members as a body, for our audit work, for this report,
or for the opinions we have formed.
Alastair Rae (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
Edinburgh, UK
16 September 2024
BDO LLP is a limited liability partnership registered in England and Wales (with registered number
OC305127).
SPRINGFIELD PROPERTIES PLC
72
Company Registration No. SC031286 (Scotland)
FINANCIAL STATEMENTS
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MAY 2024
2024
2023
Note
£000
£000
Revenue
4
266,527
332,132
Cost of sales
(223,155)
(284,177)
Gross profit
5
43,372
47,955
Administrative expenses before exceptional items
(26,485)
(27,955)
Exceptional items
10
(898)
(720)
Total administrative expenses
(27,383)
(28,675)
Other operating income
1,021
688
Operating profit
6
17,010
19,968
Finance income
5
159
133
Finance costs
8
(7,501)
(4,812)
Profit before taxation
9,668
15,289
Taxation
9
(2,120)
(3,216)
Profit for the year and total comprehensive
income
7,548
12,073
Profit for the year and total comprehensive income
is attributable to:
Owners of the parent company
7,548
12,073
7,548
12,073
Earnings per share
Basic earnings on profit for the year
12
6.36p
10.19p
Diluted earnings on profit for the year
12
6.12p
9.90p
Adjusted earnings per share
Basic earnings on profit for the year
12
7.05p
10.74p
Diluted earnings on profit for the year 12
6.77p
10.43p
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.
The accompanying notes on pages 76 to 106 form an integral part of these financial statements.
SPRINGFIELD PROPERTIES PLC
73
FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
FOR THE YEAR ENDED 31 MAY 2024
2024
2023
Non-current assets
Note
£000
£000
Property, plant and equipment
13
7,184
7,816
Intangible assets
14
5,698
5,953
Deferred taxation
23
1,787
1,783
Trade and other receivables
18
5,000
5,000
19,669
20,552
Current assets
Inventories
17
244,297
277,633
Trade and other receivables
18
26,352
22,588
Cash and cash equivalents
27
14,935
8,909
285,584
309,130
Total assets
305,253
329,682
Current liabilities
Trade and other payables
19
49,632
55,788
Short-term bank borrowings
21
54,839
-
Deferred consideration
24
7,339
11,785
Short-term obligations under lease liabilities
22
1,567
1,884
Provisions
25
2,018
1,710
Corporation tax
1,342
362
116,737
71,529
Non-current liabilities
Long-term bank borrowings
21
-
70,673
Long-term obligations under lease liabilities
22
3,971
4,016
Deferred taxation
23
2,958
3,615
Deferred consideration
24
17,123
24,332
Contingent consideration
25
2,000
2,000
Provisions
25
4,257
2,884
30,309
107,520
Total liabilities
147,046
179,049
Net assets
158,207
150,633
Equity
Share capital
26
148
148
Share premium
26
78,744
78,744
Retained earnings
79,315
71,741
Equity attributable to owners of the parent company
158,207
150,633
These financial statements were approved and authorised for issue by the Board of Directors on 16
September 2024 signed on behalf of the Board by:
Sandy Adam - Executive Chairman
Company number: SC031286
The accompanying notes on pages 76 to 106 form an integral part of these financial statements.
SPRINGFIELD PROPERTIES PLC
74
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
Share
capital
Share
premium
Retained
earnings
Total
Notes
£000
£000
£000
£000
1 June 2022
148
78,744
64,635
143,527
Total comprehensive
income for the year
-
-
12,073
12,073
Share-based payments
26
-
-
601
601
Dividends
11
-
-
(5,568)
(5,568)
31 May 2023
148
78,744
71,741
150,633
Total comprehensive
income for the year
-
-
7,548
7,548
Share-based payments
26
-
-
26
26
31 May 2024
148
78,744
79,315
158,207
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.
The accompanying notes on pages 76 to 106 form an integral part of these financial statements.
SPRINGFIELD PROPERTIES PLC
75
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR TO 31 MAY 2024
2024
2023
Cash flows generated from operations
Note
£000
£000
Profit for the year – Adjusted for:
7,548
12,073
Exceptional items
10
898
720
Taxation charged
9
2,120
3,216
Finance costs
8
7,501
4,812
Finance income
5
(159)
(133)
Adjusted operating profit before working capital movement
17,908
20,688
Exceptional items
10
(898)
(720)
Gain on disposal of tangible fixed assets
6
(215)
(312)
Gain on disposal of investment
-
(158)
Share based payments
26
26
601
Amortisation of intangible fixed assets
6
259
255
Depreciation and impairment of tangible fixed assets
2,332
2,257
Operating cash flows before movements in working capital
19,412
22,611
Decrease/(increase) in inventory
32,086
(3,251)
Increase in accounts and other receivables
(2,497)
(404)
Decrease in accounts and other payables
(4,496)
(10,818)
Net cash from operations
44,505
8,138
Taxation paid
(1,818)
(2,900)
Net cash inflow from operating activities
42,687
5,238
Investing activities
Purchase of property, plant and equipment
(177)
(478)
Proceeds on disposal of property, plant and equipment
270
427
Proceeds on disposal of investment
-
678
Interest received
155
-
Acquisition of subsidiary, net of cash acquired
-
(15,867)
Purchase of intangible assets
(4)
(30)
Net cash generated from/ (used in) investing activities
244
(15,270)
Financing activities
Deferred consideration paid on acquisition of subsidiary
32
(12,141)
(6,138)
Proceeds from bank loans
32
-
20,187
Repayment of bank loans
32
(15,834)
-
Payment of lease liabilities
32
(2,234)
(2,147)
Dividends paid
11
-
(5,568)
Interest paid
(6,696)
(3,783)
Net cash (outflow)/inflow from financing activities
(36,905)
2,551
Net increase/(decrease) in cash and cash equivalents
6,026
(7,481)
Cash and cash equivalents at beginning of year
8,909
16,390
Cash and cash equivalents at end of year
27
14,935
8,909
The accompanying notes on pages 76 to 106 form an integral part of these financial statements.
SPRINGFIELD PROPERTIES PLC
76
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
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. See company note 4 for details of the subsidiary companies.
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 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 2023.
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:
•
IFRS 17 Insurance Contracts (including amendments to IFRS 17)
•
Amendments to IAS 1 and IFRS PS2 ‘Disclosure of accounting policies’
•
Amendments to IAS 1 ‘Classification of liabilities as current or non-current’
•
Amendments to IAS 8 ‘Definition of Accounting Estimates’
•
Amendments to IAS 12 ‘Deferred tax related to assets and liabilities arising from a single
transaction’
•
Amendments to IAS 12 ‘International tax reform’
The following new standards and amendments to standards have been issued but are not effective for the
financial year beginning 1 June 2023 and have not been early adopted:
•
Amendments to IAS 1 ‘Classification of liabilities as current or non-current’
•
Amendments to IAS 1 ‘Classification of Liabilities as Current or Non-current — Deferral of Effective
Date’
•
Amendments to IAS 1 ’Non-current Liabilities with Covenants’
•
Amendments to IFRS 16 ‘Lease liability in a sale and leaseback
•
Amendments to IAS 7 and IFRS 7 ‘Supplier Finance Arrangements’
•
Amendments to IAS 21 ‘Lack of Exchangeability’
The new standards and amendments to the standards noted above are expected to have no significant
impact on the financial statements.
SPRINGFIELD PROPERTIES PLC
77
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
2. Summary of significant accounting policies (continued)
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 2024. 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 (£), rounded to the nearest £000, which is also the
currency of the primary economic environment in which the Group operates (its functional currency).
2.4.
Going concern
In determining the appropriate basis of preparation of the Financial Statements, the Directors are required to
consider whether the Group can continue to meet its liabilities and other obligations for the foreseeable future.
The Group’s business activities, together with factors that the Directors consider are likely to affect its
development, financial performance and financial position, are set out in the Strategic Report on pages 4 to
36.
The material financial and operational risks and uncertainties that may affect the Group’s performance
and their mitigation are outlined on pages 14 to 16, and financial risks including liquidity, market, interest and
capital risks are outlined in Note 29 to the Financial Statements.
Net bank debt at 31 May 2024 was significantly reduced to £39.9m (2023: £61.8m), reflecting the Group’s
sustained focus on reducing the debt position and was ahead of the target of £55m set at this time last year.
A 12-month term loan of £18.0m that had a repayment date in September 2024 was repaid in full in May
2024.
The revolving credit facility of £87.5m that was initially due to expire in January 2025, but subsequent to the
year end, has been extended for a further 12 months to January 2026 and a £7.5m overdraft facility has also
been put in place for 12 months until September 2025 to provide working capital facilities.
In order to support the going concern period to 30 September 2025, the Board-approved budget to May 2025,
with a further year added to May 2026, forms the basis of the detail and assessment to confirm the
appropriateness of the going concern basis being adopted for the preparation of the 31 May 2024 financial
statements.
In addition to the Board budget two sensitivity scenarios have been prepared reducing private home plots by
c.10% and c.15% in the year to May 2025 from the original Board-approved budget. Under the 15% reduction
scenario, the peak borrowing utilises 81% of the banking facilities. Under this scenario there are a number
of mitigating actions that are within the control of the Group and could be pursued if required, which are not
currently forecasted and would increase the headroom in the banking facilities.
Under all three scenarios the Group is able to operate within its bank facilities and covenants and at May
2025, the bank facility utilisation based on the Board-approved budget is forecast to be around 40%.
SPRINGFIELD PROPERTIES PLC
78
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
2. Summary of significant accounting policies (continued)
2.4.
Going concern (continued)
We continue to retain the discipline around controlling build spend on sites and continue to adopt a cautious
approach to new site openings. The profitable land sales in the year demonstrate the ability to generate cash
quickly – there remains strong interest in our land bank should we wish to make further sales.
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 2024.
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 contract liabilities. 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.
SPRINGFIELD PROPERTIES PLC
79
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
2
Summary of significant accounting policies (continued)
2.6.
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 Profit and loss account on an accruals basis.
2.7.
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 assets and liabilities are recognised on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. The following temporary
differences are not provided for: goodwill, the initial recognition of assets and liabilities that affects neither
the tax profit nor the accounting profit, and differences relating to investments in subsidiaries to the extent
that they will probably not reverse in the foreseeable future. Deferred tax is determined using tax rates and
laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply
when the related deferred tax asset is realised, or the deferred tax liability is settled.
A deferred tax asset is recognised for unused tax losses and unused tax credits only if it is probable that
future taxable amounts will arise against which those temporary differences and losses may be utilised.
2.8.
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.
2.9.
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.
SPRINGFIELD PROPERTIES PLC
80
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
2
Summary of significant accounting policies (continued)
2.10. 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.
2.11. 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.
2.12. 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.
2.13. 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 site finance 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.
SPRINGFIELD PROPERTIES PLC
81
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
2
Summary of significant accounting policies (continued)
2.13. Inventories and work in progress (continued)
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.
2.14. 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.
SPRINGFIELD PROPERTIES PLC
82
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
2
Summary of significant accounting policies (continued)
2.14. Financial instruments (continued)
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.
2.15. 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.
2.16. 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.
2.17. 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.
2.18. 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 £5,000) 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.
SPRINGFIELD PROPERTIES PLC
83
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
2. Summary of significant accounting policies (continued)
2.19. 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.
2.20. 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.
2.21. 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.
3
Critical accounting estimates and judgements in applying accounting policies
In the application of the Group’s accounting policies the Directors are required to make judgements,
estimates and assumptions which affect reported income, expenses, assets, liabilities and disclosure of
contingent assets and liabilities. The estimates and associated assumptions are based on historical
experience, expectations of future events and other factors that are believed to be reasonable under the
circumstances. Actual results in the future could differ from such estimates. The estimates and underlying
assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the
period.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next year are:
3.1. Carrying value of inventories
Inventories are stated at the lower of cost and net realisable value. The assessment of net realisable value
is performed on a site by site basis taking into account estimated costs to complete and remaining revenue.
These assessments are carried out on a regular basis throughout the year to ensure an effective review of
inventory carrying values and the costs to complete developments – this includes forecast selling prices and
forecast costs to come based on general market conditions and anticipated completion date.
There is an element of uncertainty when estimating the profitability of a site and the Group ensures there is
a strong level of control around the reporting of these assessments to ensure an accurate assessment is
made of inventory carrying values.
SPRINGFIELD PROPERTIES PLC
84
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
3
Critical accounting estimates and judgements in applying accounting policies (continued)
3.2. Contract revenue
Contract revenue relates to where the Group is providing construction services to third parties, resulting in a
completed developed property, on land that is not controlled by the Group during the development phase.
Revenue is recognised over time, with reference to the stage of completion of the contract. The stage of
completion is determined using an input method that reflects the development cost incurred as a proportion
of the total expected development cost, as it is considered proportionate to the satisfaction of the underlying
performance obligation. These contracts are typically for a fixed cash consideration received on a monthly
cycle over the course of the construction services contract.
There is an element of uncertainty when estimating the final cost of a site and the Group ensures there is a
strong level of internal control around the reporting of these assessments to ensure an accurate assessment
is made. This ensures revenue is accurately calculated on a stage of completion basis (input method).
3.3. Cost allocation
In order to allocate the costs that the Group recognises on its developments in a specific period, the Group
has to allocate site-wide development costs between homes built in the current year. It also has to estimate
costs to complete on such developments. In making these assessments there is a degree of inherent
uncertainty. The Group has developed controls to assess and review carrying values and the appropriateness
of estimates made.
3.4. Climate change
In preparing the financial statements, the Directors have also considered the impact of climate change in the
context of the risks and opportunities identified in the Climate-related Financial Disclosures on pages 17 to
36. There has been no material impact identified on the financial reporting and estimates. The Directors
specifically considered the impact of climate change in the following areas:
•
Going concern and the Group’s ability to meet its liabilities over the next two years;
•
Cash flow forecasts used in the impairment review of intangible assets;
•
Carrying value and useful economic lives of property, plant and equipment; and
•
Recoverability of deferred tax assets.
While there is no short-term impact expected from climate change, the Directors are aware of the risks and
regularly assess these risks against judgements and estimates made in preparation of the Group’s financial
statements.
4. Revenue
Analysis of the Group’s revenue is as follows:
2024
2023
Revenue
£000
£000
Private residential housing
184,734
253,362
Affordable housing
46,975
53,931
Contracting housing
4,995
19,681
Land sale
28,055
3,676
Other revenue
1,768
1,482
Revenue from the sale of goods and services as reported in the profit and
loss account
266,527
332,132
SPRINGFIELD PROPERTIES PLC
85
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
4. Revenue (continued)
Contract balances
The following table provides information about balances arising from contracts with customers:
2024
2023
£000
£000
Amounts included in trade receivables
6,065
8,135
Amounts included within other payables
(2,427)
(4,219)
Amounts included in trade receivables relate to work certified and invoiced but not paid on Housing
Association contracts.
Amounts included within payables represents customer deposits on private homes sales and deferred land
sales as well as payments on account.
5. Segmental reporting
The Group has only one reportable operating segment, being housebuilding within the UK, under the control
of the Board. The Board has been identified as the Chief Operating Decision Maker as defined under IFRS
8 Operating Segments.
The Board regularly reviews the Group’s profit and loss account and balance sheet position at both a
divisional and consolidated level. Each of these divisions is an operating segment as defined by IFRS 8 in
that the Directors assess performance and allocate resources at this level. The divisions have been
aggregated into one reporting segment on the basis that they share similar economic characteristics. In
addition, each division builds and delivers residential homes, uses consistent methods of construction, sells
homes to both private customers and housing associations, have a comparable sales process and
operations, and are all subject to the same macroeconomic factors including mortgage availability and
Government policy.
As the Group operates solely in the United Kingdom segment reporting by geographical region is not
required.
2024
2023
Revenue
£000
£000
Private residential housing
184,734
253,362
Affordable housing
46,975
53,931
Contract housing
4,995
19,681
Land sale
28,055
3,676
Other
1,768
1,482
Total revenue
266,527
332,132
Gross profit
43,372
47,955
Administrative expenses
(26,485)
(27,955)
Exceptional items
(898)
(720)
Other operating income
1,021
688
Finance income
159
133
Finance expenses
(7,501)
(4,812)
Profit before tax
9,668
15,289
Taxation
(2,120)
(3,216)
Profit for the period
7,548
12,073
SPRINGFIELD PROPERTIES PLC
86
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
6. Operating profit
Operating profit is stated after charging / (crediting):
2024
2023
Notes
£000
£000
Depreciation of tangible fixed assets
13
619
910
Depreciation of right-of-use assets
13
1,713
1,342
Amortisation of intangible assets
14
259
255
Gain on disposal of tangible fixed assets
(215)
(312)
Gain on disposal of investment
-
(158)
Cost of inventories recognised as an expense
223,155
284,177
Exceptional items
10
898
720
Expenses relating to short term and low value leases
9
5
Auditor’s remuneration
2024
2023
£000
£000
Fees payable to the Group’s auditor for the audit of the Group and Company
annual financial statements
67
81
Fees payable to the Group’s auditor for the audit of the Company’s subsidiaries
128
155
Fees payable to the Group’s auditor and their associates for other services to the
Group and Company – other non-audit services
3
6
198
242
7. Staff costs
The average monthly number of employees (including Executive Directors) for the continuing operations was:
2024
2023
Building staff
444
614
Administrative staff
254
262
698
876
2024
2023
£000
£000
Wages and salaries
32,358
39,266
Share based payments
26
601
Social security costs
3,341
3,870
Pension costs
1,416
1,634
37,141
45,371
Full details of the Directors’ remuneration is provided in the Remuneration Committee Report on page 48.
The Group operates a defined contribution pension scheme for all qualifying employees. The assets of the
scheme are held separately from those of the Group in an independently administered fund.
The charge to the profit and loss account in respect of defined contribution schemes was £1,416k (2023:
£1,634k). Contributions totalling £205k (2023: £216k) were payable to the fund at the year-end and are
included in creditors.
SPRINGFIELD PROPERTIES PLC
87
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
8. Finance costs
2024
2023
£000
£000
Interest on bank overdrafts and loans
7,165
4,297
Interest on lease liabilities
298
457
Other interest
38
58
7,501
4,812
9. Taxation
2024
2023
£000
£000
Current tax
UK corporation tax on profits for the current period
2,824
3,069
Adjustments in respect of prior periods
(43)
(92)
2,781
2,977
Deferred tax
Origination and reversal of timing differences
(660)
239
Adjustments in respect of prior periods
(1)
-
(661)
239
2,120
3,216
The charge for the year can be reconciled to the standard rate of tax as follows:
2024
2023
£000
£000
Profit before tax
9,668
15,289
Tax at the UK corporation tax rate of 25% (2023: 20%)
2,417
3,058
Effects of:
Tax effect of expenses that are not deductible in determining taxable profit
55
257
Adjustments in respect of prior years
(43)
(92)
Depreciation on assets not qualifying for tax allowances
(42)
(40)
Land remediation relief
-
(1)
Income not taxable
-
11
Deferred tax adjustments in respect of prior years
(1)
-
Temporary difference not recognised
34
291
Other timing differences
(27)
(3)
Adjust deferred tax to closing average rate
(273)
(265)
Tax charge for period
2,120
3,216
10. Exceptional items
2024
2023
£000
£000
Redundancy costs
898
349
Acquisition and other transaction – related costs (1)
-
371
898
720
(1)
2023 - Acquisition and other transactions – related costs for the acquisition of the housebuilding business of Mactaggart & Mickel Group Ltd.
SPRINGFIELD PROPERTIES PLC
88
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
11. Dividends
For the year to 31 May 2024, a final dividend of 1p per share is proposed to be paid. No interim dividend was
paid during the year.
In respect of the prior year, there was no interim or final dividend paid to shareholders.
On 16 December 2022, a final dividend for the year ended 31 May 2022 was paid to shareholders, amounting
to £5,568,061 which equated to 4.7p per share.
12. 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
2024 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).
(1)
Adjusted earnings is presented as an additional performance measure and is stated before exceptional items and is used in adjusted EPS
calculation.
2024
2023
£000
£000
Profit for the year attributable to owners of the Company
7,548
12,073
Adjusted for the impact of tax adjusted exceptional costs in the year
811
652
Adjusted earnings
8,359
12,725
Weighted average number of ordinary shares for the purpose of basic
earnings per share
118,572,439
118,478,254
Effect of dilutive potential shares: share options
4,830,426
3,507,257
Weighted average number of ordinary shares for the purpose of diluted
earnings per share
123,402,865
121,985,511
Earnings per ordinary share
Basic earnings on profit for the year
6.36p
10.19p
Diluted earnings on profit for the year
6.12p
9.90p
Adjusted earnings per ordinary share (1)
Basic earnings on profit for the year
7.05p
10.74p
Diluted earnings on profit for the year
6.77p
10.43p
SPRINGFIELD PROPERTIES PLC
89
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
13. Property, plant and equipment
2024
2023
£000
£000
Property, plant and equipment
2,119
2,577
Right-of-use assets
5,065
5,239
Property, plant and equipment
7,184
7,816
Land &
buildings
Plant &
machinery
Fixtures,
fittings &
equipment
Motor
vehicles
Total
£000
£000
£000
£000
£000
Cost
At 1 June 2022
986
6,958
1,693
242
9,879
Additions
-
511
278
71
860
Disposals
(142)
(234)
(13)
(144)
(533)
At 31 May 2023
844
7,235
1,958
169
10,206
Additions
-
181
22
29
232
Disposals
-
(594)
(7)
(93)
(694)
At 31 May 2024
844
6,822
1,973
105
9,744
Accumulated depreciation
At 1 June 2022
147
5,522
1,237
213
7,119
Depreciation charge
25
616
233
36
910
Disposals
(26)
(225)
(6)
(143)
(400)
At 31 May 2023
146
5,913
1,464
106
7,629
Depreciation charge
21
378
189
31
619
Disposals
-
(536)
(3)
(84)
(623)
At 31 May 2024
167
5,755
1,650
53
7,625
Net book value
At 31 May 2024
677
1,067
323
52
2,119
At 31 May 2023
698
1,322
494
63
2,577
At 31 May 2022
839
1,436
456
29
2,760
SPRINGFIELD PROPERTIES PLC
90
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
13. Property, plant and equipment (continued)
Right-of-use assets
Land &
buildings
Fixtures,
fittings &
equipment
Motor
vehicles
Total
£000
£000
£000
£000
Cost
At 1 June 2022
2,571
31
1,653
4,255
Additions
1,522
37
1,992
3,551
Disposals
-
-
(27)
(27)
At 31 May 2023
4,093
68
3,618
7,779
Additions
923
-
649
1,572
Disposals
-
(15)
(110)
(125)
At 31 May 2024
5,016
53
4,157
9,226
Accumulated
depreciation
At 1 June 2022
909
20
287
1,216
Depreciation charge
519
20
803
1,342
Disposals
-
-
(18)
(18)
At 31 May 2023
1,428
40
1,072
2,540
Depreciation charge
546
14
1,153
1,713
Disposals
-
(15)
(77)
(92)
At 31 May 2024
1,974
39
2,148
4,161
Net book value
At 31 May 2024
3,042
14
2,009
5,065
At 31 May 2023
2,665
28
2,546
5,239
At 31 May 2022
1,662
11
1,366
3,039
Fixed assets with the carrying value of £5,065k (2023: £5,239k) are pledged as security.
SPRINGFIELD PROPERTIES PLC
91
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
14. Intangible fixed assets
Goodwill
Website
Marketing-
related
assets
Total
£000
£000
£000
£000
Cost
At 1 June 2022
1,631
19
4,300
5,950
Additions
420
30
-
450
At 31 May 2023
2,051
49
4,300
6,400
Additions
4
-
-
4
At 31 May 2024
2,055
49
4,300
6,404
Amortisation
At 1 June 2022
69
-
123
192
Amortisation charge in year
-
8
247
255
At 31 May 2023
69
8
370
447
Amortisation charge in year
-
12
247
259
At 31 May 2024
69
20
617
706
Net book value
At 31 May 2024
1,986
29
3,683
5,698
At 31 May 2023
1,982
41
3,930
5,953
At 31 May 2022
1,562
19
4,177
5,758
Goodwill relates to the prior acquisition of Walker Holdings (Scotland) Limited £1,049k (2023: £1,049k),
Tulloch Homes Holdings Limited £513k (2023: £513k) and the housebuilding business of Mactaggart &
Mickel Group Limited (Springfield M&M Homes Limited) £420k (2023: £420k) and is subject to annual
impairment reviews. The recoverable amount of Walker Holdings (Scotland) Limited goodwill has been
determined based on a value in use calculation using cash flow projections based on the actual results for
Walker Holdings (Scotland) Limited for the year ended 31 May 2024 and the Board-approved budget to May
2025 with two further years added to May 2027 and a final year based on a growth rate of 5% per annum.
The recoverable amount of the Tulloch Homes Holdings Limited goodwill has been determined based on a
value in use calculation using cash flow projections based on the actual results for the Tulloch Group for the
year ended 31 May 2024 and the Board-approved budget to May 2025 with two further years added to May
2027 and a final year based on a growth rate of 5% per annum. The recoverable amount of the Springfield
M&M Homes goodwill has been determined based on a value in use calculation using cash flow projections
based on the actual results for the Springfield M&M Homes for the year ended 31 May 2024 and the Board-
approved budget to May 2025 with two further years added to May 2027 and a final year based on a growth
rate of 5% per annum.
Marketing-related assets of £3,683k (2023: £3,930k) comprise of Springfield Properties Plc trademark asset
£600k (2023: £600k) which has been measured at cost and the Tulloch Homes brand £3,083k (2023:
£3,330k). The trademark asset is expected to have an indefinite useful life. The brand intangible £3,083k
(2023: £3,330k) relates to the brand name of Tulloch Homes Holdings Limited and is being amortised over
its economic useful life (15 years). The recoverable amount of the Springfield trademark intangible has been
determined based on a value in use calculation using cash flow projections based on the actual results for
Springfield Properties Plc company only for the year ended 31 May 2024 and the Board-approved budget to
May 2025 with two further years added to May 2027 and a final year based on a growth rate of 5% per
annum. The Tulloch brand intangible recoverable amount is based on the same detailed as noted above for
goodwill.
SPRINGFIELD PROPERTIES PLC
92
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
14. Intangible fixed assets (continued)
Website costs are stated at cost less amortised cost. The economic useful life of website costs is 3 years.
The discount rate applied to cash flows is 12% based on an estimated market rate of interest applied. As a
result of the impairment review, there has been no impairment to the carrying value of the intangible assets.
The Directors believe that any reasonably possible further change in the key assumptions on which the
recoverable amount is based would not cause the carrying amount to exceed the recoverable amount.
15. Acquisition of subsidiary company
During the year, the Group purchased 100% of the share capital of SP SUB 2024 Limited. This company has
yet to trade.
16. Fixed assets investments
Movement in fixed asset investments
Investment in
joint venture
Other
Total
£000
£000
£000
Cost
At 1 June 2022
-
520
520
Disposals
-
(520)
(520)
At 31 May 2023
-
-
-
Additions
-
-
-
At 31 May 2024
-
-
-
In the prior year, Springfield Properties Plc sold an investment in Castle Stuart for a consideration of £678k,
resulting in a gain on disposal of £158k.
17. Inventories
2024
2023
£000
£000
Work in progress
244,297
277,633
244,297
277,633
Finance costs capitalised during the year amounted to £nil (2023: £1,672k).
18. Trade and other receivables
Amounts falling due within one year
2024
2023
£000
£000
Trade receivables
9,907
9,102
Other receivables
7,696
7,270
Contract assets
8,136
5,006
Prepayments and accrued income
613
1,210
26,352
22,588
Revenue recognised in the year ended 31 May 2024 included £10,742k (2023: £3,973k) from projects that
were included in the contract assets balance at 31 May 2023.
The Directors consider the carrying amount of the receivables approximates to their fair value.
SPRINGFIELD PROPERTIES PLC
93
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
18. Trade and other receivables (continued)
The Group’s exposure to credit risk is limited by the fact that the Group generally receives cash at the point
of legal completion of its sales. There are certain categories of revenue where this is not the case; for
instance, affordable housing revenues, contracting housing revenues or land sales where management
considers that the ratings of these various debtors are good and therefore credit risk is low. Loans to related
parties (included within other receivables great than one year) have also been assessed as low credit risk
based on the expected profitability of their future contracts. The Group has low concentration of credit risk,
with exposure spread over a large number of customers and developments. The maximum exposure to credit
risk at 31 May 2024 is represented by the carrying amount of each financial asset.
Amounts falling due after one year
2024
2023
£000
£000
Other receivables
5,000
5,000
5,000
5,000
Shared equity receivables
2024
2023
£000
£000
At 1 June 2023
329
641
Repaid during the year
(176)
(325)
Finance income
3
13
At 31 May 2024
156
329
Less: amounts receivable within one year
(156)
(329)
Amounts receivable after one year
-
-
Shared equity loan receivables comprise loans which were granted as part of sales transactions. They are
secured by way of a second ranking legal charge over the related property. The assets are recorded at fair
value, being the estimated future amount receivable by the Group, discounted to present day values.
The Directors review the future anticipated receipts from the assets at the end of each financial year. Credit
risk, which the Directors currently consider to be mitigated through holding a second legal charge over the
assets, is accounted for in determining fair values and appropriate discount factors are applied. The Directors
review the financial assets for impairment at each balance sheet date. The Directors expect an average
maturity profile of between 2 and 5 years from the balance sheet date.
19. Trade and other payables
2024
2023
£000
£000
Trade creditors
23,787
35,377
Other taxation and social security
2,475
1,328
Other creditors
488
765
Contract liabilities
-
2,860
Accruals and deferred income
22,882
15,458
49,632
55,788
Revenue recognised in the year ended 31 May 2024 included £7,206k (2023: £5,641k) that was included in
the contract liability balance at 31 May 2023. The Directors consider the carrying amount of the accounts
payable approximates to their fair value.
SPRINGFIELD PROPERTIES PLC
94
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
20. Financial assets and liabilities
Assets
2024
2023
£000
£000
Financial assets at amortised cost
42,668
31,005
Total
42,668
31,005
Liabilities
2024
2023
£000
£000
Measured at amortised cost
129,080
162,165
Total
129,080
162,165
Included within financial assets at amortised cost is trade receivables, retentions and cash and cash
equivalents.
Included within financial liabilities at amortised cost is short and long term bank borrowings, trade creditors,
short term obligations under lease liabilities, long term obligations under lease liabilities, deferred
consideration and accruals.
21. Bank borrowings
2024
2023
Secured borrowings:
£000
£000
Bank loans
54,839
70,673
Less: payable within one year
(54,839)
-
Payable after one year
-
70,673
The bank loan comprises of a revolving credit facility of £87.5m that was initially due to expire in January
2025. Subsequent to the year end, this has been extended for a further 12 months to January 2026. The
facility attracts an interest rate of 2.75% 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 2024 work
in progress value of £36.6m.
A term loan of £18.0m that had a repayment date in September 2024 was repaid in full in May 2024.
At 31 May 2024, the Group had available £32.5m (2023: £16.5m) of undrawn committed borrowing facilities.
The Group’s lender has a floating charge over the assets of the Company and of its subsidiaries.
SPRINGFIELD PROPERTIES PLC
95
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
22. Obligations under leases
Lease payments represent rentals payable by the Group for certain items of plant and machinery and are
secured by the assets under lease in question. Leases include purchase options at the end of the lease
period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and
no arrangements have been entered into for contingent rental payments. Leases are stated at the present
value of the contractual payments due to the lessor over the lease term.
2024
2023
Future minimum payments due:
£000
£000
Not later than one year
1,904
2,236
After one year but not more than five years
3,426
3,232
After five years
1,513
1,546
6,843
7,014
Less finance charges allocated to future periods
(1,305)
(1,114)
5,538
5,900
Present value of minimum lease payments:
Not later than one year
1,567
1,884
After one year but not more than five years
2,663
3,273
After five years
1,308
743
5,538
5,900
23. Deferred taxation
2024
2023
£000
£000
The movement in the deferred taxation provision during the year was:
Provision brought forward
1,832
1,593
Charge in the year
(661)
239
Provision carried forward
1,171
1,832
2024
2023
£000
£000
Deferred tax liability
2,958
3,615
Deferred tax assets
(1,787)
(1,783)
1,171
1,832
2024
2023
£000
£000
The elements of deferred taxation are as follows:
Fixed asset timing differences
98
122
Available losses
(555)
(554)
Other timing differences
1,628
2,264
1,171
1,832
SPRINGFIELD PROPERTIES PLC
96
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
24. Deferred consideration
As part of the purchase agreement of Tulloch Homes Holdings Limited, there was a further £13,000,000 of
deferred consideration payable. This can be broken down into: (i) £362,330 paid on 24 April 2022 (ii)
£6,137,670 paid in November 2022 and (iii) £6,500,000 paid in August 2023. The outstanding discounted
amount payable at the period end is £nil (2023: £6,493,552).
As part of acquiring the housebuilding business of Mactaggart & Mickel Group Limited, there was a further
£30,781,108 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 £7,695,277. The outstanding discounted
amount payable at the period end was £24,462,203 (2023: £29,623,127).
2024
2023
£000
£000
Acquisition of Tulloch Homes Holdings Limited
-
6,494
Acquisition of the housebuilding business of
Mactaggart & Mickel Group Limited
24,462
29,623
24,462
36,117
2024
2023
£000
£000
Deferred consideration < 1 year
7,339
11,785
Deferred consideration > 1 year
17,123
24,332
24,462
36,117
25. (a) Contingent consideration
As part of the purchase agreement of Dawn Homes Holdings Limited there was a further £2,500,000 payable
for an area of land if (i) the Group make 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 £2,000,000 based on 80% probability. The outstanding amount
payable at the period end included within liabilities is £2,000,000 (2023: £2,000,000). The remaining
£500,000 (20% on the £2,500,000 still to be paid) has been treated as a contingent liability due to the
uncertainty over the future payment.
2024
2023
£000
£000
Acquisition of Dawn Homes Holdings Limited
2,000
2,000
2,000
2,000
25. (b) Provisions
Dilapidation provisions are included for all rented buildings within the Group. Maintenance provisions relate
to costs to come on developments where the final homes have been handed over.
2024
2023
£000
£000
Dilapidation provision
113
169
Provisions for onerous contracts
-
353
Maintenance provision
6,162
4,072
6,275
4,594
SPRINGFIELD PROPERTIES PLC
97
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
25. (b) Provisions (continued)
The movement in the provision accounts are as follows:
Dilapidation
Onerous
contracts
Maintenance
Total
£000
£000
£000
£000
Balance as at 1 June 2023
169
353
4,072
4,594
Additional provision
9
-
4,788
4,797
Amount utilised
(12)
(353)
(1,860)
(2,225)
Amount released
(53)
-
(838)
(891)
Balance as at 31 May 2024
113
-
6,162
6,275
2024
2023
£000
£000
Provisions < 1 year
2,018
1,710
Provisions > 1 year
4,257
2,884
6,275
4,594
26. 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 - allotted, called up
and fully paid
Number of shares
Share capital
£000
Share
premium
£000
At 1 June 2023
118,496,001
148
78,744
Share issue
173,123
-
-
At 31 May 2024
118,669,124
148
78,744
During the year, 173,123 shares (2023: 26,602) were issued in satisfaction of share options exercised for a
consideration of £26 (2023: £33).
Share based payments
During the year the Group operated four share-based schemes.
Share related share options scheme
The Group operates a Savings related Share Option Scheme which is open to all employees. Grant options
were made in May 2021 and become exercisable after 3 years, subject to employees remaining in continuous
employment. Employees enter into a savings contract with the Yorkshire Building Society who administers
the scheme. The options are granted at a 10% discount of the share price at the date of grant and lapse if
not exercised within six months of maturity. Special provisions apply to employees who leave their
employment for ill health, redundancy or retirement.
SPRINGFIELD PROPERTIES PLC
98
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
26. Share capital (continued)
Share based payments (continued)
Long-Term Incentive Plan (LTIP)
The Company operates a LTIP for senior management to retain and align their interests with shareholders.
The LTIP is split into a CSOP, ESOP and Performance Share Plan (“PSP”) scheme. The PSP was introduced
during the prior year and under which key executives could be granted conditional “whole share” awards (i.e.
rights to acquire shares where the individual is required to pay a zero or negligible exercise price) the vesting
of which is normally conditional on both continued employment and the satisfaction of specified performance
measures.
Fair value of share options
Options are valued using the Black-Scholes option-pricing model. No performance conditions are included
in the fair value calculation.
CSOP
2024
2023
Number of
shares
Weighted
average
exercise
price (pence)
Number of
shares
Weighted
average
exercise price
(pence)
Options at the beginning of the
year
606,413
115.28
627,558
115.33
Lapsed during the year
(22,775)
131.72
(21,145)
116.71
Options at the year end
583,638
114.64
606,413
115.28
Share option
Grant Price
(p)
Number of
shares at year
end
Exercise price
(p)
Vesting
period
(years)
CSOP – 16th October 2017
106.00
307,821
106.00
3
CSOP – 8th December 2017
111.00
27,027
111.00
3
CSOP – 3rd May 2018
134.00
22,388
134.00
3
CSOP – 16th May 2018
134.00
91,746
134.00
3
CSOP – 1st October 2018
122.50
98,165
122.50
3
CSOP – 4th June 2019
108.50
36,491
108.50
3
2024
2023
ESOP
Number
of shares
Weighted
average
exercise
price (pence)
Number of
shares
Weighted
average
exercise price
(pence)
Options at the start of the year
1,727,589
118.80
1,746,570
118.84
Lapsed during the year
(44,108)
122.14
(18,981)
122.50
Options at the year end
1,683,481
118.71
1,727,589
118.80
SPRINGFIELD PROPERTIES PLC
99
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
26. Share capital (continued)
Share based payments (continued)
Share option
Grant Price
(p)
Number of
shares at year
end
Exercise price
(p)
Vesting
period
(years)
ESOP – 16th October 2017
106.00
445,432
106.00
3
ESOP – 3rd May 2018
134.00
72,761
134.00
3
ESOP – 16th May 2018
134.00
11,157
134.00
3
ESOP – 1st October 2018
122.50
1,154,131
122.50
3
2024
2023
SAYE
Number of
shares
Weighted
average
exercise
price (pence)
Number of
shares
Weighted
average
exercise price
(pence)
Options at the start of the year
1,084,972
130.50
1,837,747
130.50
Lapsed during the year
(660,187)
130.50
(752,775)
130.50
Options at the year end
424,785
130.50
1,084,972
130.50
Share option
Grant Price
(p)
Number of
shares at year
end
Exercise price
(p)
Vesting
period
(years)
SAYE – 29th April 2021
145.00
424,785
130.50
3
2024
2023
PSP
Number of
shares
Weighted
average
exercise
price (pence)
Number of
shares
Weighted
average
exercise price
(pence)
Options at start of the year
2,853,274
0.13
2,368,181
0.13
Granted during the year
2,161,933
0.13
776,800
0.13
Lapsed during the year
(456,085)
0.13
(265,105)
0.13
Exercised during the year
(173,123)
0.13
(26,602)
0.13
Options at the year end
4,385,999
0.13
2,853,274
0.13
Share option
Grant Price
(p)
Number of
shares at year
end
Exercise price
(p)
Vesting
Period
(years)
PSP – 9th January 2020
0.13
24,132
0.13
3
PSP – 30th October 2020
0.13
159,678
0.13
3
PSP – 21st December 2021
0.13
1,263,456
0.13
3
PSP – 28th March 2023
0.13
776,800
0.13
3
PSP – 30th October 2023
0.13
2,161,933
0.13
3
SPRINGFIELD PROPERTIES PLC
100
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
26. Share capital (continued)
Share based payments (continued)
Inputs used to determine fair value of options
CSOP
ESOP
SAYE
PSP
Expected volatility
29.00%
29.00%
29.00%
17.83%
Risk free interest rate
0.49%
0.49%
0.49%
-1.91%
Expected dividends
-
-
-
2.5%
Fair value of options
34.00p
39.00p
37.00p
49.04p
Charge per option
32.00p
37.00p
35.00p
49.04p
Expected volatility was calculated using historical share price information of the house-building sector for the
CSOP and ESOP and the 12-month average Springfield share price prior to the grant of the PSP options.
CSOP – nil (2023: nil) of options were exercised during the year and 547,147 (2023: 606,413) shares were
exercisable.
ESOP – nil (2023: nil) of options were exercised during the year and 1,683,481 (2023: 1,727,589) shares
were exercisable.
SAYE – nil (2023: nil) of options were exercised during the year and 424,785 (2023: nil) shares were
exercisable.
PSP – 173,123 (2023: 26,602) of options were exercised during the year and 183,810 (2023: 56,929) shares
were exercisable.
Charge for share based incentive schemes
The total charge for the year relating to employee share-based plans were £26k (2023: £601k), all of which
related to equity-settled share-based payment transactions.
27. Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents comprise the following as
at 31 May:
2024
2023
£000
£000
Cash at bank and in hand
14,935
8,909
14,935
8,909
At 31 May 2024, the Group had an available overdraft facility of £12.5m (2023: £12.5m). In August 2024, the
overdraft facility was renewed at a level of £7.5m.
28. Capital risk management
The Group manages its capital to ensure that the Group will be able to continue as a going concern while
maximising the return to stakeholders through the optimisation of the debt and equity balance.
The capital structure of the Group consists of equity attributable to equity holders of the parent Company and
its subsidiary, comprising issued capital, reserves and retained earnings, all as disclosed in the balance
sheet. The Group is not subject to externally imposed capital requirements other than those included, from
time to time, in the financial covenants associated with bank borrowing.
SPRINGFIELD PROPERTIES PLC
101
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
29. Financial risk management
The Group is exposed to a variety of financial risks which result from both its operating and investing activities.
The Group’s risk management is coordinated by the Board of Directors, and focuses on actively securing the
Group’s short to medium term cash flows by minimising the exposure to financial markets.
29.1. Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will
affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising
the return on risk.
29.2. Interest risk
Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Group’s exposure to the interest rate risk relates primarily to its floating
rate borrowings.
The responsibility for setting the level of fixed rate debt lies with the Board and is continually reviewed in the
light of economic data provided by a variety of sources.
2024
2023
£000
£000
Financial liabilities at fixed rate
30,000
42,017
Financial liabilities at floating rate
54,839
70,673
Non-interest-bearing financial liabilities
24,241
49,475
129,080
162,165
Interest rate sensitivity analysis
The table below details the Group’s sensitivity to increase or decrease of floating interest rates by 0.5%,
which the Directors consider to be a reasonably possible change. The analysis was applied to loans and
borrowings (financial liabilities) based on the assumption that the amount of liability outstanding as at the
balance sheet date was outstanding for the whole year.
Bank of England SONIA rate
Bank of England SONIA rate
31 May 2024
31 May 2023
Interest rate
+0.5%
Interest rate
–0.5%
Interest rate
+0.5%
Interest rate
–0.5%
£000
£000
£000
£000
(Loss) / profit
(274)
274
(353)
353
Limitations of sensitivity analysis
The above tables demonstrate the effect of a change in a key assumption while other assumptions remain
unchanged. In reality, there is a correlation between the assumptions and other factors. It should also be
noted that these sensitivities are non-linear and larger or smaller impacts should not be interpolated or
extrapolated from these results. The sensitivity analysis does not take into consideration that the Group’s
assets and liabilities are actively managed. Additionally, the financial position of the Group may vary at the
time that any actual market movement occurs.
SPRINGFIELD PROPERTIES PLC
102
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
29. Financial risk management (continued)
29.2.
Inherent risk (continued)
Other limitations in the above sensitivity analysis include the use of hypothetical market movements to
demonstrate potential risk that only represent the Group’s view of possible near-term market changes that
cannot be predicted and the assumption that all interest rates move in an identical fashion.
This analysis is for illustrative purposes only, as in practice market rates rarely change in isolation of other
factors that also affect Group’s financial position and results.
Management believe that fair value of the loans, borrowings and finance lease obligations approximates their
carrying amounts as the majority of obligations bear interest rates approximating market rates at 31 May
2024.
29.3.
Liquidity risk
Liquidity risk is the risk that the Group will be unable to meet its liabilities as they fall due. The Group’s
objective is to maintain a balance between continuity of funding and flexibility through the use of bank
overdrafts, medium to long term borrowings and leases. The Directors continually assess the balance of
capital and debt of the Group.
They consider the security of capital funding against the potentially higher rates of return offered by debt
financing in order to set an efficient but stable balance appropriate to the size of the Group.
The Board reviews projects against build programmes and contractual agreements to avoid any risk of
incurring contractual penalties or damaging the Group’s reputations, which would in turn reduce the Group’s
ability to borrow at optimal rates. Covenant tests are continually reviewed to ensure covenant criteria are met
in the event of deterioration in market conditions.
The maturity profile of the Group and parent Company’s financial liabilities based on contractual
undiscounted payments (including interest payments) is as follows:
31 May 2024
Carrying
amount
Total minimum
future payment
Within
1 year
Within 1-2
years
Within 2-5
years
Greater
than
5 years
£000
£000
£000
£000
£000
£000
Accounts payable
44,241
44,241
44,241
-
-
-
Bank borrowings
54,839
55,000
55,000
-
-
-
Deferred consideration
24,462
25,140
7,695
7,695
9,750
-
Leases
5,538
6,842
1,904
488
2,938
1,512
129,080
131,223
108,840
8,183
12,688
1,512
31 May 2023
Carrying
amount
Total minimum
future
payment
Within
1 year
Within 1-
2 years
Within 2-5
years
Greater
than
5 years
£000
£000
£000
£000
£000
£000
Accounts payable
49,475
49,475
49,475
-
-
-
Bank borrowings
70,673
71,000
-
71,000
-
-
Deferred consideration
36,117
37,281
12,271
7,695
17,315
-
Leases
5,900
7,014
2,236
1,645
2,314
819
162,165
164,770
63,982
80,340
19,629
819
SPRINGFIELD PROPERTIES PLC
103
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
29. Financial risk management (continued)
29.4
Credit risk
The nature of Scotland’s housing industry and the legal framework surrounding it results in the Group having
a low exposure to credit risk.
Credit risk is the risk that a customer may default or not meet its obligations to the Group on a timely basis,
leading to financial losses to the Group.
The Group’s maximum exposure to credit risk in relation to each class of recognised financial asset is the
carrying amount of those assets as indicated in the balance sheet. At the balance sheet date, there was no
significant concentration of credit risk to the Group.
The Group manages credit risk actively monitoring its level of trade receivables and following up when they
are overdue more than three months. The ageing profile of trade receivables was:
31 May 2024
31 May 2023
Total book
value
Allowance for
impairment
Total book
value
Allowance for
impairment
£000
£000
£000
£000
Current
8,959
-
8,827
-
Overdue 90 days
948
112
275
-
9,907
112
9,102
-
During the year, the Group had no charge for impairment for trade receivables.
The ageing profile of other receivables was:
31 May 2024
31 May 2023
Total book
value
Allowance for
impairment
Total book
value
Allowance for
impairment
£000
£000
£000
£000
Current
7,696
-
7,270
-
Non-current
5,000
-
5,000
-
12,696
-
12,270
-
During the year, the Group had no charge for impairment for other receivables.
SPRINGFIELD PROPERTIES PLC
104
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
30. 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 £nil (2023:
£1,854k) were paid to key management personnel (Board of Directors and the members of the Operational
Board). Dividends were paid to Board of Directors as follows:
Name of Director
2024
£000
2023
£000
Mr Sandy Adam
-
1,776
Mr Innes Smith
-
43
Ms Michelle Motion
-
5
Mr Matthew Benson
-
1
Mr Roger Eddie
-
2
Mr Colin Rae
-
1
Mr Nick Cooper
-
1
-
1,829
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:
2024
£000
2023
£000
Short-term employee benefits
2,542
2,696
Share-based payments
248
555
Post-employment benefits
9
208
2,799
3,459
During the year the Group entered into the following transactions with related parties:
Sale of goods
Purchase of goods
2024
2023
2024
2023
£000
£000
£000
£000
Bertha Park Limited (1)
4,906
13,751
319
-
Other entities that key management personnel
have control, significant influence or hold a
material interest in
41
76
20
325
Key management personnel
46
244
-
-
Other related parties
156
1
2,016
1,616
5,149
14,072
2,355
1,941
Sales to related parties represent those undertaken in the ordinary course of business.
Rent paid
2024
2023
£000
£000
Entities that key management personnel have
control, significant influence or hold a material
interest in
80
162
Key management personnel
-
3
Other related parties
64
100
144
265
SPRINGFIELD PROPERTIES PLC
105
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
30. Transactions with related parties (continued)
2024
2023
£000
£000
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:
2024
2023
£000
£000
Amounts receivable:
Bertha Park Limited (1)
7,259
8,524
Other entities that key management personnel have control, significant influence
or hold a material interest in (short-term)
-
5
Key management personnel
1
-
Other related parties
36
-
7,296
8,529
2024
2023
£000
£000
Accounts payable:
Entities which key management personnel have control, significant influence or
hold a material interest in (short-term)
-
62
Other related parties
2,343
678
2,343
740
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 £4,906k (2023:
£13,751k) in relation to a build contract. At the year-end £2,259k (2023: £3,399k) is included in trade debtors and included within other debtors is a loan of £5,000k (2022:
£5,125k). During the year the Group had purchases from Bertha Park Limited of £319 (2023: £nil) in relation to a build contract.
31. Commitments and guarantees
In the ordinary course of the Group's business the Group is required to enter into performance bond
arrangements. At 31 May 2024, the Group had bonds of £41,986k (2023: £36,473k) provided by financial
institutions.
Capital commitments
2024
£000
2023
£000
Call and put options for the purchase of plots for development
24,078
27,275
SPRINGFIELD PROPERTIES PLC
106
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
32. Analysis of net debt
The Analysis of net debt is as follows:
2024
2023
£000
£000
Cash in hand and bank
14,935
8,909
Bank borrowings
(54,839)
(70,673)
(39,904)
(61,764)
Lease liability
(5,538)
(5,900)
Net debt
(45,442)
(67,664)
Deferred consideration
(24,462)
(36,117)
(69,904)
(103,781)
Reconciliation of net cashflow to movement in net debt is as follows:
At 1 June
2023
New
leases
Cashflow
Fair value
At 31 May
2024
£000
£000
£000
£000
£000
Cash and cash
equivalents
8,909
-
6,026
-
14,935
Bank borrowings
(70,673)
-
15,834
-
(54,839)
Leases
(5,900)
(1,593)
2,234
(279)
(5,538)
Net debt
(67,664)
(1,593)
24,094
(279)
(45,442)
Deferred
consideration
(36,117)
-
12,141
(486)
(24,462)
(103,781)
(1,593)
36,235
(765)
(69,904)
At 1 June
2022
New
leases
On
acquisition
Cashflow
Fair value
At 31 May
2023
£000
£000
£000
£000
£000
£000
Cash and cash
equivalents
16,390
-
-
(7,481)
-
8,909
Bank borrowings
(50,486)
-
-
(20,187)
-
(70,673)
Leases
(3,954)
(3,694)
-
2,147
(399)
(5,900)
Net (debt)/cash
(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)
SPRINGFIELD PROPERTIES PLC
107
FINANCIAL STATEMENTS
COMPANY BALANCE SHEET
AS AT 31 MAY 2024
2024
2023
Note
£000
£000
Non-current assets
Property, plant and equipment
2
2,177
2,162
Intangible assets
3
629
641
Investments
4
132,697
132,697
Deferred taxation
11
104
99
Trade and other receivables
6
5,000
5,000
140,607
140,599
Current assets
Inventories
5
105,076
114,533
Trade and other receivables
6
31,299
32,011
Cash and cash equivalents
15
3,086
2,470
139,461
149,014
Total assets
280,068
289,613
Current liabilities
Trade and other payables
7
124,000
112,136
Deferred consideration
12
-
6,494
Short-term obligations under lease
liabilities
10
168
236
Short-term bank borrowings
9
54,839
-
Provision
13
1,096
886
Corporation tax
880
-
180,983
119,752
Non-current liabilities
Long-term bank borrowings
9
-
70,673
Long-term obligations under lease liabilities
10
1,837
1,034
Contingent consideration
13
2,000
2,000
Provisions
13
2,252
1,191
6,089
74,898
Total liabilities
187,072
194,650
Net assets
92,996
94,963
Equity
Share capital
14
148
148
Share premium
14
78,744
78,744
Retained earnings
14,104
16,071
Total equity
92,996
94,963
As permitted by s408 Companies Act 2006, the Company has not presented its own profit and loss account
and related notes. The Company’s loss for the year was £1,992,624 (2023: £4,273,216).
These financial statements were approved by the Board of Directors on 16 September 2024.
Signed on behalf of the Board by:
Sandy Adam
Executive Chairman
Company number: SC031286
Company accounting policies are in line with Group – See Group Note 2. The accompanying notes on pages
110 to 128 form an integral part of these financial statements.
SPRINGFIELD PROPERTIES PLC
108
FINANCIAL STATEMENTS
COMPANY STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 31 MAY 2024
Share
capital
Share
premium
Retained
earnings
Total
£000
£000
£000
£000
1 June 2022
148
78,744
25,311
104,203
Total comprehensive income
for the year
-
-
(4,273)
(4,273)
Dividends
-
-
(5,568)
(5,568)
Share-based payments
-
-
601
601
31 May 2023
148
78,744
16,071
94,963
Total
comprehensive
expenditure for the year
-
-
(1,993)
(1,993)
Share-based payments
-
-
26
26
31 May 2024
148
78,744
14,104
92,996
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.
Company accounting policies are in line with Group – See Group Note 2.
The accompanying notes on pages 110 to 128 form an integral part of these financial statements.
SPRINGFIELD PROPERTIES PLC
109
FINANCIAL STATEMENTS
COMPANY STATEMENT OF CASH FLOWS
YEAR TO 31 MAY 2024
Note
2024
2023
£000
£000
Cash flows generated from operations
Loss for the year
(1,993)
(4,273)
Adjusted for:
Exceptional items
111
8
Taxation credit
(5)
(237)
Finance costs
7,179
4,446
Finance income
(125)
(125)
Adjusted operating profit before working capital movement
5,167
(181)
Gain on disposal of tangible fixed assets
(65)
(164)
Exceptional items – cash movement
(111)
(8)
Depreciation and impairment of tangible fixed assets
2
384
559
Amortisation and impairment of intangible fixed assets
3
12
8
Share based payments
14
26
601
Operating cash flows before movements in working capital
5,413
815
Decrease/ (increase) in inventory
8,207
(9,617)
Decrease/ (increase) and other receivables
3,468
(218)
Increase in accounts and other payables
13,524
8,095
Net cash generated/(used) from operations
30,612
(925)
Taxation paid
(550)
(1,900)
Net cash inflow/(outflow)from operating activities
30,062
(2,825)
Investing activities
Purchase of property, plant and equipment
2
(21)
(100)
Proceeds on disposal of property, plant and equipment
106
324
Purchase of intangible fixed assets
-
(30)
Subsidiary acquisition deferred payment
12
(6,500)
(6,138)
Interest received
125
125
Net cash used in investing activities
(6,290)
(5,819)
Financing activities
Proceeds from bank loans
19
(15,834)
20,187
Payment of lease liabilities
19
(180)
(323)
Dividends paid
-
(5,568)
Interest paid
(7,142)
(4,255)
Net cash (outflow)/inflow from financing activities
(23,156)
10,041
Net increase in cash and cash equivalents
616
1,397
Cash and cash equivalents at beginning of year
2,470
1,073
Cash and cash equivalents at end of year
15
3,086
2,470
Company accounting policies are in line with Group – See Group Note 2.
The accompanying notes on pages 110 to 128 form an integral part of these financial statements.
SPRINGFIELD PROPERTIES PLC
110
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MAY 2024
1. Staff costs
The average monthly number of employees (including Executive Directors) for the continuing operations was:
2024
2023
Building staff
221
341
Administrative staff
169
170
390
511
2024
2023
£000
£000
Wages and salaries
17,646
22,312
Share based payments
26
601
Social security costs
1,950
2,434
Pension costs
800
930
20,422
26,277
The charge to the profit and loss account in respect of defined contribution schemes was £800k (2023:
£930k). Contributions totalling £134k (2023: £150k) were payable to the fund at the year-end and are included
in creditors.
2. Property, plant and equipment
2024
2023
£000
£000
Property, plant and equipment
378
1,041
Right-of-use assets
1,799
1,121
Total property, plant and equipment
2,177
2,162
SPRINGFIELD PROPERTIES PLC
111
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MAY 2024
2. Property, plant and equipment (continued)
Land and
buildings
Plant and
machinery
Fixtures,
fittings &
equipment
Total
£000
£000
£000
£000
Cost
At 1 June 2022
986
2,227
1,633
4,846
Additions
-
32
68
100
Disposals
(142)
-
(13)
(155)
At 31 May 2023
844
2,259
1,688
4,791
Additions
-
5
16
21
Disposals
(585)
(103)
(7)
(695)
At 31 May 2024
259
2,161
1,697
4,117
Accumulated depreciation
At 1 June 2022
148
2,118
1,200
3,466
Depreciation charge
25
106
185
316
Disposals
(26)
-
(6)
(32)
At 31 May 2023
147
2,224
1,379
3,750
Depreciation charge
11
9
131
151
Disposals
(58)
(102)
(2)
(162)
At 31 May 2024
100
2,131
1,508
3,739
Net book value
At 31 May 2024
159
30
189
378
At 31 May 2023
697
35
309
1,041
At 31 May 2022
838
109
433
1,380
SPRINGFIELD PROPERTIES PLC
112
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MAY 2024
2. Property, plant and equipment (continued)
Right-of-use assets
Land and
buildings
Fixtures,
fittings &
equipment
Total
£000
£000
£000
Cost
At 1 June 2022
2,048
31
2,079
Additions
-
17
17
At 31 May 2023
2,048
48
2,096
Additions
911
-
911
Disposals
-
(15)
(15)
At 31 May 2024
2,959
33
2,992
Accumulated depreciation
At 1 June 2022
712
20
732
Depreciation charge
230
13
243
At 31 May 2023
942
33
975
Depreciation charge
226
7
233
Disposals
-
(15)
(15)
At 31 May 2024
1,168
25
1,193
Net book value
At 31 May 2024
1,791
8
1,799
At 31 May 2023
1,106
15
1,121
At 31 May 2022
1,336
11
1,347
3. Intangible fixed assets
Marketing-related
assets
£000
Cost
1 June 2022
619
Additions
30
At 31 May 2023 and 31 May 2024
649
Amortisation
At 1 June 2022
-
Amortisation
8
At 31 May 2023
8
Amortisation
12
At 31 May 2024
20
Net book value
At 31 May 2023
629
At 31 May 2022
641
At31 May 2021
619
SPRINGFIELD PROPERTIES PLC
113
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MAY 2024
3. Intangible fixed assets (continued)
Marketing-related assets comprises of the Springfield trademark asset which has been measured at cost.
Market-related assets are expected to have an indefinite useful life. The recoverable amount of the marketing
intangible has been determined based on a value in use calculation using cash flow projections based on the
actual results for Springfield company only for the year ended 31 May 2024 and the board approved budget
to May 2025 with two further years added to May 2027 and a final year based on a growth rate of 5% per
annum.
The discount rate applied to cash flows is 12% based on an estimated market rate of interest applied. As a
result of the impairment review, there has been no impairment to the carrying value of the intangible assets.
The Directors believe that any reasonably possible further change in the key assumptions on which the
recoverable amount is based would not cause the carrying amount to exceed the recoverable amount.
4. Fixed asset investments
2024
2023
£000
£000
Cost
Investment in subsidiaries
169,697
169,697
Provision for impairment
Impairment
(37,000)
(37,000)
Net book value
132,697
132,697
Movement in fixed asset investments
Share in
Group
undertakings
Total
£000
£000
Cost
At 1 June 2022
91,467
91,467
Additions
78,230
78,230
At 31 May 2023 and 31 May 2024
169,697
169,697
Provisions for impairment
At 1 June 2022
(37,000)
(37,000)
Impairment
-
-
At 31 May 2023 and 31 May 2024
(37,000)
(37,000)
Net book value
At 31 May 2024
132,697
132,697
At 31 May 2023
132,697
132,697
At 31 May 2022
132,697
132,697
Impairment is as a result of a £37,000k dividend from Walker Holdings (Scotland) Limited in the month after
acquisition in January 2019.
During the year, the company purchased 100% of the share capital of SP SUB 2024 Limited. This company
has yet to trade.
SPRINGFIELD PROPERTIES PLC
114
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MAY 2024
4. Fixed asset investments (continued)
Details of the Company’s subsidiaries and jointly owned entities at 31 May 2024 are as follows:
Name of undertaking
Nature of business
Class of shares
held
% Held
Glassgreen Hire Limited
Hire of plant and machinery
Ordinary
100%
Dawn Homes Holdings Limited
Holding Company
Ordinary
100%
Dawn Homes Limited *
Housebuilder/Construction
Ordinary
100%
Dawn Homes (Residential) Limited *
Buying and selling of own real estate
Ordinary
100%
Dawn Homes (Cambuslang) Limited *
Housebuilder/Construction
Ordinary
100%
Walker Group Springfield (Holdings) Limited
Housebuilders/
property development/
management services
Ordinary
100%
Walker Group (Scotland) Limited) *
Housebuilders/Construction
Ordinary
100%
Walker Contracts (Scotland) Limited *
Dormant
Ordinary
100%
Walker Residential (Scotland) Limited*
Dormant
Ordinary
100%
Walker Group Developments Limited *
Dormant
Ordinary
100%
Tulloch Homes Holdings Limited
Holding Company
Ordinary
100%
Tulloch Homes Group Limited *
Housebuilder/Construction
Ordinary
100%
Tulloch Homes Express Limited *
Housebuilder/Construction
Ordinary
100%
Tulloch Homes Limited *
Housebuilder/Construction
Ordinary
100%
Tulloch Limited *
Housebuilder/Construction
Ordinary
100%
Argyll Developments (Scotland) Limited*
Housebuilder/Construction
Ordinary
100%
Tulloch Homes (Drumossie) Limited*
Housebuilder/Construction
Ordinary
100%
Argyll Homes (Hamilton) Limited *
Housebuilder/Construction
Ordinary
100%
Springfield Timber Kit Systems Limited
Timber Kit Manufacturing
Ordinary
100%
Springfield M&M Homes Limited
Housebuilder/Construction
Ordinary
100%
SP SUB 2024 Limited
Dormant
Ordinary
100%
All of the above have a registered office address of:
Alexander Fleming House 8 Southfield Drive Elgin, Morayshire IV30 6GR
*Indirectly held subsidiary
SPRINGFIELD PROPERTIES PLC
115
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MAY 2024
5. Inventories
2024
2023
£000
£000
Work in progress
105,076
114,533
105,076
114,533
6. Trade and other receivables
Amounts falling due within one year
2024
2023
£000
£000
Trade receivables
5,640
8,152
Other receivables
5,142
6,477
Contract assets
6,708
4,383
Amounts due from Group undertakings
13,385
12,717
Prepayments and accrued income
424
282
31,299
32,011
Revenue recognised in the year ended 31 May 2024 included £10,742k (2023: £3,973k) from projects that
were included in the contract assets balance at 31 May 2023.
The Directors consider the carrying amount of the receivables approximates to their fair value.
The Company’s exposure to credit risk is limited by the fact that the Company generally receives cash at the
point of legal completion of its sales. There are certain categories of revenue where this is not the case; for
instance, housing association revenues or land sales where management considers that the credit ratings of
these various debtors are strong and therefore credit risk is low. Loans to related parties have also been
assessed as low credit risk based on the expected profitability of their future contracts. The Company has
low concentration of credit risk, with exposure spread over a large number of customers and developments.
The maximum exposure to credit risk at 31 May 2024 is represented by the carrying amount of each financial
asset.
Amounts falling due after one year
2024
2023
£000
£000
Other receivables
5,000
5,000
5,000
5,000
7. Trade and other payables
2024
2023
£000
£000
Trade creditors
12,175
18,768
Other taxation and social security
2,039
749
Other creditors
160
153
Amounts due to Group undertakings
98,325
78,894
Contract liabilities
-
2,860
Accruals and deferred income
11,301
10,712
124,000
112,136
The Directors consider the carrying amount of the accounts payable approximates to its fair value.
Revenue recognised in the year ended 31 May 2024 included £7,206k (2023: £5,641k) that was included in
the contract liability balance at 31 May 2023. The Directors consider the carrying amount of the accounts
payable approximates to their fair value.
SPRINGFIELD PROPERTIES PLC
116
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MAY 2024
8. Financial assets and liabilities
Assets
2024
2023
£000
£000
Financial assets at amortised cost
36,920
32,722
Total
36,920
32,722
Liabilities
2024
2023
£000
£000
Measured at amortised cost
176,326
185,888
Total
176,326
185,888
Included within financial assets at amortised cost is trade receivables, intercompany receivables, retentions
and cash and cash equivalents.
Included within financial liabilities at amortised cost is long term bank borrowings, trade creditors,
intercompany payables, short term obligations under lease liabilities, long term obligations under lease
liabilities, deferred consideration and accruals.
9. Bank borrowings
2024
2023
£000
£000
Secured borrowings:
Bank loans
54,839
70,673
Less: payable within on year
(54,839)
-
Payable after one year
-
70,673
The bank loan comprises of a revolving credit facility of £87.5m that was initially due to expire in January
2025. Subsequent to the year end, this has been extended for a further 12 months to January 2026. The
facility attracts an interest rate of 2.75% 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 2024 work
in progress value of £29.4m.
A term loan of £18.0m that had a repayment date in September 2024 was repaid in full in May 2024.
At 31 May 2024, the Group had available £32.5m (2023: £16.5m) of undrawn committed borrowing facilities.
SPRINGFIELD PROPERTIES PLC
117
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MAY 2024
10. Obligations under leases
Lease payments represent rentals payable by the Company for certain items of plant and machinery and
buildings and are secured by the assets under lease in question. Leases include purchase options at the end
of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment
basis and no arrangements have been entered into for contingent rental payments. Leases are stated at the
present value of the contractual payments due to the lessor over the lease term.
2024
2023
Future minimum payments due:
£000
£000
Not later than one year
288
312
After one year but not more than five years
1,131
867
After five years
1,268
377
2,687
1,556
Less finance charges allocated to future
periods
(682)
(286)
2,005
1,270
Present value of minimum lease payments
is:
Not later than one year
168
236
After one year but not more than five years
755
690
After five years
1,082
344
2,005
1,270
11. Deferred taxation
2022
Profit &
loss
account
2023
Profit &
loss
account
2024
£000
£000
£000
£000
£000
Fixed assets – temporary
differences
(88)
7
(81)
(6)
(87)
Other
–
temporary
differences
(74)
56
(18)
1
(17)
(162)
63
(99)
(5)
(104)
2024
2023
£000
£000
Deferred tax assets
104
99
104
99
12. Deferred consideration
As part of the purchase agreement of Tulloch Homes Holdings Limited, there was a further £13,000,000 of
deferred consideration payable. This can be broken down into: (i) £362,330 paid on 24 April 2022 (ii)
£6,137,670 paid on 1 November 2022 and (iii) £6,500,000 paid in August 2023. The outstanding discounted
amount payable at the period end is £nil (2023: £6,493,552).
2024
2023
£000
£000
Deferred consideration < 1 year
-
6,494
-
6,494
SPRINGFIELD PROPERTIES PLC
118
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MAY 2024
13. (a) Contingent consideration
As part of the purchase agreement of Dawn Homes Holdings Limited there was a further £2,500,000 payable
for an area of land if (i) the Company 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 £2,000,000 based on 80% probability.
The outstanding amount payable at the period end included within liabilities is £2,000,000 (2023:
£2,000,000). The remaining £500,000 (20% on the £2,500,000 still to be paid) has been treated as a
contingent liability due to the uncertainty over the future payment.
2024
2023
£000
£000
Acquisition of Dawn Homes Holdings Limited
2,000
2,000
2,000
2,000
13. (b) Provisions
Dilapidation provisions are included for all rented buildings. Maintenance provisions relate to costs to come
on developments where the final homes have been handed over.
2024
2023
£000
£000
Dilapidation provision
60
125
Provisions for onerous contracts
-
353
Maintenance provision
3,288
1,599
3,348
2,077
The movement in the provision accounts are as follows:
Dilapidation
Onerous
contracts
Maintenance
Total
£000
£000
£000
£000
Balance as at 1 June 2023
125
353
1,599
2,077
Additional provision
-
-
2,613
2,613
Amount utilised
(12)
(353)
(821)
(1,186)
Amount released
(53)
-
(103)
(156)
Balance as at 31 May 2024
60
-
3,288
3,348
2024
2023
£000
£000
Provisions < 1 year
1,096
886
Provisions > 1 year
2,252
1,191
3,348
2,077
SPRINGFIELD PROPERTIES PLC
119
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MAY 2024
14. 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 - allotted, called up
and fully paid
Number of
shares
Share capital
£000
Share premium
£000
At 1 June 2023
118,496,001
148
78,744
Share issue
173,123
-
-
At 31 May 2024
118,669,124
148
78,744
During the year, 173,123 shares (2023: 26,602) were issued in satisfaction of share options exercised for a
consideration of £26 (2023: £33).
Share based payments
During the year the Company operated four share based schemes.
Share related share options scheme
The Company operates a Savings related Share Option Scheme which is open to all employees. Grant
options were made in May 2021 and become exercisable after 3 years, subject to employees remaining in
continuous employment. Employees enter into a savings contract with the Yorkshire Building Society who
administers the scheme. The options are granted at a 10% discount of the share price at the date of grant
and lapse if not exercised within six months of maturity. Special provisions apply to employees who leave
their employment for ill health, redundancy or retirement.
Long-Term Incentive Plan (LTIP)
The Company operates a LTIP for senior management to retain and align their interests with shareholders.
The LTIP is split into a CSOP, ESOP and Performance Share Plan (“PSP”) scheme. The PSP was introduced
during the prior year and under it, key executives could be granted conditional “whole share” awards (i.e.
rights to acquire shares where the individual is required to pay a zero or negligible exercise price) the vesting
of which is normally conditional on both continued employment and the satisfaction of specified performance
measures.
SPRINGFIELD PROPERTIES PLC
120
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MAY 2024
14. Share capital (continued)
Share based payments (continued)
Fair value of share options
Options are valued using the Black-Scholes option-pricing model. No performance conditions are included
in the fair value calculation of the CSOP and ESOP.
CSOP
2024
2023
Number
of shares
Weighted
average
exercise price
(pence)
Number
of shares
Weighted
average
exercise price
(pence)
Options at the beginning of the
year
606,413
115.28
627,558
115.33
Lapsed during the year
(22,775)
131.72
(21,145)
116.71
Options at the year end
583,638
114.64
606,413
115.28
Share option
Grant Price
(p)
Number of
shares at year
end
Exercise price
(p)
Vesting
period
(years)
CSOP – 16th October 2017
106.00
307,821
106.00
3
CSOP – 8th December 2017
111.00
27,027
111.00
3
CSOP – 3rd May 2018
134.00
22,388
134.00
3
CSOP – 16th May 2018
134.00
91,746
134.00
3
CSOP – 1st October 2018
122.50
98,165
122.50
3
CSOP – 4th June 2019
108.50
36,491
108.50
3
ESOP
2024
2023
Number
of shares
Weighted
average
exercise price
(pence)
Number
of shares
Weighted
average
exercise price
(pence)
Options at the beginning of the
year
1,727,589
118.84
1,746,570
118.84
Lapsed during the year
(44,108)
122.14
(18,981)
122.50
Options at the year end
1,683,481
118.71
1,727,589
118.80
Share option
Grant Price
(p)
Number of
shares at year
end
Exercise price
(p)
Vesting
period
(years)
ESOP – 16th October 2017
106.00
445,432
106.00
5
ESOP – 3rd May 2018
134.00
72,761
134.00
5
ESOP – 16th May 2018
134.00
11,157
134.00
5
ESOP – 1st October 2018
122.50
1,154,131
122.50
5
SPRINGFIELD PROPERTIES PLC
121
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MAY 2024
14. Share capital (continued)
Share based payments (continued)
SAYE
2024
2023
Number
of shares
Weighted
average
exercise price
(pence)
Number of
shares
Weighted
average
exercise
price
(pence)
Options at the beginning of
the year
1,084,972
130.50
1,837,747
130.50
Lapsed during the year
(660,187)
130.50
(752,775)
130.50
Options at the year end
424,785
130.50
1,084,972
130.50
Share option
Grant Price
(p)
Number of
shares at year
end
Exercise price
(p)
Vesting
period
(years)
SAYE – 29th April 2021
145.00
424,785
130.50
3
PSP
2024
2023
Number
of shares
Weighted
average
exercise price
(pence)
Number
of shares
Weighted
average
exercise price
(pence)
Options at the beginning of
the year
2,853,274
0.13
2,368,181
0.13
Granted during the year
2,161,933
0.13
776,800
0.13
Lapsed during the year
(456,085)
0.13
(265,105)
0.13
Exercised during the year
(173,123)
0.13
(26,602)
0.13
Options at the year end
4,385,999
0.13
2,853,274
0.13
Share option
Grant Price
(p)
Number of
shares at year
end
Exercise price
(p)
Vesting
Period
(years)
PSP – 9th January 2020
0.13
24,132
0.13
3
PSP – 30th October 2020
0.13
159,678
0.13
3
PSP – 21st December 2021
0.13
1,263,456
0.13
3
PSP – 28th March 2023
0.13
776,800
0.13
3
PSP – 30th October 2024
0.13
2,161,933
0.13
3
SPRINGFIELD PROPERTIES PLC
122
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MAY 2024
14. Share capital (continued)
Share based payments (continued)
Inputs used to determine fair value of options
CSOP
ESOP
SAYE
PSP
Expected volatility
29.00%
29.00%
29.00%
17.83%
Risk free interest rate
0.49%
0.49%
0.49%
-1.91%
Expected dividends
-
-
-
2.5%
Fair value of options
34.00p
39.00p
37.00p
49.04p
Charge per option
32.00p
37.00p
35.00p
49.04p
Expected volatility was calculated using historical share price information of the house-building sector for the
CSOP, ESOP and SAYE and the 12 month average Springfield share price prior to the grant of the PSP
options.
CSOP – nil (2023 – nil) of options were exercised during the year and 547,147 (2023: 606,413) shares were
exercisable.
ESOP – nil (2023 – nil) of options were exercised during the year and 1,683,481 (2023: 1,727,589) shares
were exercisable.
SAYE – nil (2023 – nil) of options were exercised during the year and 424,785 (2023: nil) shares were
exercisable.
PSP – 173,123 (2023 – 26,602) of options were exercised during the year and 183,810 (2023: 56,929) shares
were exercisable.
Charge for share based incentive schemes
The total charge for the year relating to employee share-based plans were £26k (2023: £601k), all of which
related to equity-settled share-based payment transactions.
15. Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents comprise the following as
at 31 May:
2024
2023
£000
£000
Cash at bank and in hand
3,086
2,470
3,086
2,470
At 31 May 2024, the Company had an available overdraft facility of £12.5m (2023: £12.5m). In August 2024,
the overdraft facility was renewed at a level of £7.5m.
SPRINGFIELD PROPERTIES PLC
123
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MAY 2024
16. Capital risk management
The Company manages its capital to ensure that the Company will be able to continue as a going concern
while maximising the return to stakeholders through the optimisation of the debt and equity balance.
The capital structure of the Company consists of issued capital, reserves and retained earnings, all as
disclosed in the balance sheet. The Company is not subject to externally imposed capital requirements other
than those included, from time to time, in the financial covenants associated with bank borrowing.
17. Financial risk management
The Company is exposed to a variety of financial risks which result from both its operating and investing
activities. The Company’s risk management is coordinated by the Board of Directors, and focuses on actively
securing the Company’s short to medium term cash flows by minimising the exposure to financial markets.
17.1
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will
affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising
the return on risk.
Interest rate risk
Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company’s exposure to the interest rate risk relates primarily to its
floating rate borrowings.
The responsibility for setting the level of fixed rate debt lies with the Board and is continually reviewed in the
light of economic data provided by a variety of sources.
2024
2023
£000
£000
Financial liabilities at fixed rate
2,005
7,764
Financial liabilities at floating rate
54,839
70,673
Non-interest-bearing financial liabilities
119,482
107,451
176,326
185,888
Interest rate sensitivity analysis
The table below details the Company’s sensitivity to increase or decrease of floating interest rates by 0.5%,
which the Directors consider to be a reasonably possible change. The analysis was applied to loans and
borrowings (financial liabilities) based on the assumption that the amount of liability outstanding as at the
balance sheet date was outstanding for the whole year.
Bank of England SONIA rate
Bank of England SONIA rate
31 May 2024
31 May 2023
Interest rate
+0.5%
Interest rate
-0.5%
Interest rate
+0.5%
Interest rate
-0.5%
£000
£000
£000
£000
(Loss) / profit
(274)
274
(353)
353
SPRINGFIELD PROPERTIES PLC
124
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MAY 2024
17. Financial risk management (continued)
17.1
Market risk (continued)
Limitations of sensitivity analysis
The above tables demonstrate the effect of a change in a key assumption while other assumptions remain
unchanged. In reality there is a correlation between the assumptions and other factors. It should also be
noted that these sensitivities are non-linear and larger or smaller impacts should not be interpolated or
extrapolated from these results. The sensitivity analysis does not take into consideration that the Company’s
assets and liabilities are actively managed. Additionally, the financial position of the Company may vary at
the time that any actual market movement occurs.
Other limitations in the above sensitivity analysis include the use of hypothetical market movements to
demonstrate potential risk that only represent the Company’s view of possible near-term market changes
that cannot be predicted and the assumption that all interest rates move in an identical fashion.
This analysis is for illustrative purposes only, as in practice market rates rarely change in isolation of other
factors that also affect the Company’s financial position and results.
Management believe that fair value of the loans, borrowings and finance lease obligations approximates their
carrying amounts as the majority of obligations bear interest rates approximating market rates at 31 May
2022.
17.2 Liquidity risk
Liquidity risk is the risk that the Company will be unable to meet its liabilities as they fall due. The Company’s
objective is to maintain a balance between continuity of funding and flexibility through the use of bank
overdrafts, medium to long term borrowings and hire purchase contracts. The Directors continually assess
the balance of capital and debt of the Company. They consider the security of capital funding against the
potentially higher rates of return offered by debt financing in order to set an efficient but stable balance
appropriate to the size of the Company.
The Board reviews projects against build programmes and contractual agreements to avoid any risk of
incurring contractual penalties or damaging the Company’s reputation, which would in turn reduce the
Company’s ability to borrow at optimal rates. Covenant tests are continually reviewed to ensure covenant
criteria are met in the event of deterioration in market conditions.
The maturity profile of the Company’s financial liabilities based on contractual undiscounted payments
(including interest payments) is as follows:
31 May 2024
Carrying
amount
Total
minimum
future
payment
Within 1
year
Within 1-2
years
Within 2-
5 years
Greater
than 5
years
£000
£000
£000
£000
£000
£000
Accounts
payable
119,482
119,482
119,482
-
-
-
Bank
borrowings
54,839
55,000
55,000
-
-
-
Leases
2,005
2,687
288
286
845
1,268
176,326
177,169
174,770
286
845
1,268
SPRINGFIELD PROPERTIES PLC
125
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MAY 2024
17. Financial risk management (continued)
17.2 Liquidity risk (continued)
31 May 2023
Carrying
amount
Total minimum
future payment
Within 1 year
Within 1-2
years
Within 2-5
years
Greater
than 5
years
£000
£000
£000
£000
£000
£000
Accounts
payable
107,451
107,451
107,451
-
-
-
Bank
borrowings
70,673
71,000
-
71,000
-
-
Deferred
consideration
6,494
6,500
6,500
-
-
-
Leases
1,270
1,556
312
267
600
377
185,888
186,507
114,263
71,267
600
377
17.3 Credit risk
Credit risk is the risk that a customer may default or not meet its obligations to the Company on a timely
basis, leading to financial losses to the Company.
The Company’s maximum exposure to credit risk in relation to each class of recognised financial asset is the
carrying amount of those assets as indicated in the balance sheet. At the balance sheet date, there was no
significant concentration of credit risk to the Company.
The Company manages credit risk by actively monitoring the level of trade receivables and following up when
they are overdue more than three months.
The ageing profile of trade receivables was:
31 May 2024
31 May 2023
Total book
value
Allowance for
impairment
Total book
value
Allowance for
impairment
£000
£000
£000
£000
Current
4,833
-
7,920
-
Overdue 90 days
807
112
232
-
5,640
112
8,152
-
During the year, the Company had no allowance for impairment for trade receivables.
The ageing profile of other receivables was:
31 May 2024
31 May 2023
Total book
value
Allowance for
impairment
Total book
value
Allowance for
impairment
£000
£000
£000
£000
Current
5,142
-
6,477
-
Non-current
5,000
-
5,000
-
10,142
-
11,477
-
During the year the Company had no allowance for impairment for other receivables.
SPRINGFIELD PROPERTIES PLC
126
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MAY 2024
18. 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 £nil (2023:
£1,854k) were paid to key management personnel (Board of Directors and the members of the Operational
Board). Dividends were paid to Board of Directors as follows:
Name of Director
2024
£000
2023
£000
Mr Sandy Adam
-
1,776
Mr Innes Smith
-
43
Ms Michelle Motion
-
5
Mr Matthew Benson
-
1
Mr Roger Eddie
-
2
Mr Colin Rae
-
1
Mr Nick Cooper
-
1
-
1,829
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:
2024
£000
2023
£000
Short-term employee benefits
2,240
2,696
Share-based payments
204
555
Post-employment benefits
8
208
2,452
3,459
During the year the Company entered into the following transactions with related parties:
Sale of goods
Purchase of goods
2024
2023
2024
2023
£000
£000
£000
£000
Bertha Park Limited (1)
4,737
13,390
319
-
Other entities that key management personnel
have control, significant influence or hold a
material interest in
39
37
19
325
Key management personnel
34
227
-
-
Other related parties
44
1
2,014
1,616
4,854
13,655
2,352
1,941
Sales to related parties represent those undertaken in the ordinary course of business.
Rent paid
2024
2023
£000
£000
Entities that key management personnel have
control, significant influence or hold a material
interest in
80
162
Key management personnel
-
3
Other related parties
64
100
144
265
SPRINGFIELD PROPERTIES PLC
127
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
18. Transactions with related parties (continued)
2024
2023
£000
£000
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:
2024
2023
£000
£000
Amounts receivable:
Amounts due from Group undertakings
13,385
15,876
Bertha Park Limited (1)
7,195
8,495
Other related parties
1
1
20,581
24,372
2024
2023
£000
£000
Amounts payable:
Amounts due from Group undertakings
98,325
82,054
Entities that key management personnel have control, significant influence or
hold a material interest in (short-term)
-
32
Other related parties
2,343
678
100,668
82,764
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.
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 £4,737k (2023:
£13,390k) in relation to a build contract. At the year-end £2,195 (2023: £3,370k) is included in trade debtors and included within other debtors is a loan of £5,000k (2023:
£5,125k). During the year the Group had purchases from Bertha Park Limited of £319k (2023: £nil) in relation to a build contract.
Other related party transactions
During the year there were transactions between the Company and its subsidiaries as follows:
2024
2023
£000
£000
Balance at 1 June 2023
(66,177)
(54,645)
Charges to/(from) subsidiary companies
(2,997)
1,064
Transfers of cash from subsidiary companies
(15,766)
(12,596)
Balance at 31 May 2024
(84,940)
(66,177)
During the period the company made purchases from related parties of £9,544k (2023: £5,900k) and sales
to related parties of £2,485k (2023: £3,331k). Management charges of £4,062k (2023: £3,653k) were charged
to subsidiary companies during the year.
£nil (2023: £10,000k) was transferred to Springfield M&M Homes Limited (subsidiary company) to fund the
initial cash consideration for the acquisition of the housebuilding business of Mactaggart & Mickel Group
Limited.
SPRINGFIELD PROPERTIES PLC
128
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR TO 31 MAY 2024
19. Analysis of net debt
The analysis of net debt is as follows:
2024
2023
£000
£000
Cash in hand and bank
3,086
2,470
Bank borrowings
(54,839)
(70,673)
(51,753)
(68,203)
Lease liability
(2,005)
(1,270)
Net debt
(53,758)
(69,473)
Reconciliation of net cashflow to movement in net debt is as follows:
At 1 June
2023
New Leases
Cashflow
Fair Value
At 31 May
2024
£000
£000
£000
£000
£000
Cash and cash
equivalents
2,470
-
616
-
3,086
Bank borrowings
(70,673)
-
15,834
-
(54,839)
Lease
(1,270)
(911)
180
(4)
(2,005)
Net debt
(69,473)
(911)
16,630
(4)
(53,758)
Deferred consideration
(6,494)
-
6,500
(6)
-
(75,967)
(911)
23,130
(10)
(53,758)
At 1 June
2022
New Leases
Cashflow
Fair Value
At 31 May
2023
£000
£000
£000
£000
£000
Cash and cash
equivalents
1,073
-
1,397
-
2,470
Bank borrowings
(50,486)
-
(20,187)
-
(70,673)
Lease
(1,484)
(17)
323
(92)
(1,270)
Net debt
(50,897)
(17)
(18,467)
(92)
(69,473)
Deferred consideration
(12,574)
-
6,137
(57)
(6,494)
(63,471)
(17)
(12,330)
(149)
(75,967)