Property & Construction Daily

The Property & Construction Daily provides a sector-specific comment from leading analyst Alastair Stewart. His daily perspective provides a round-up of market statements, news, economics and views from the property and construction sectors.

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July 12, 2023

SPR, WINK, GFTU, HLCL

Company news

Springfield Properties (SPR, 64p, £76m mkt cap) – SPR is a client of PERL

Scotland’s only quoted housebuilder. Board announcement. Springfield Properties has announced that Iain Logan, Interim CFO since March, has been confirmed to the permanent role. Mr Logan, aged 49, has held the positions of Finance Director and Group Financial Controller over the last three years. He was responsible for leading all aspects of financial operations and reporting and for managing the Group’s banking relationships. He also played a key role in the Company’s acquisition, and integration, of Tulloch Homes in December 2021 and the Scottish housebuilding division of MacTaggart & Mickel in June 2022. Prior to joining Springfield, he was Group Financial Controller of AIM-quoted Omega Diagnostics Group, a specialist medical diagnostics company, for nine years. He is a Chartered Accountant with the Institute of Chartered Accountants of Scotland and began his career at PwC in Edinburgh. CEO Innes Smith said: “The Board has been very pleased with Iain’s performance as interim CFO and unanimously decided to make the position permanent. Since joining Springfield over three years ago, Iain has made an important contribution to our finance function and, increasingly, across the business”.

M Winkworth (WINK, 145p, £19m) – PERL provides research services to Shore Capital on this stock

Franchised estate and lettings agency, focused on London and SE. Q2 dividend announcement and trading update.

Guidance: The group pay a dividend of 2.9p per share for Q2 23. “Directors expect H1 2023 pre-tax profits to be below last year’s level. While the Directors believe that confidence will return once buyers can access a broader choice of mortgage finance, the outlook for sales in the second half of the year remains uncertain and the shortfall in H1 2023 means that full year pre-tax profits are likely to fall below market expectations. The Company’s balance sheet remains strong and debt free, with cash in line with the level reported at 30 June 2022 despite continued investment in the business”.

Trading: “After a first quarter that was in line with management expectations, the sales market proved to be more challenging in the second quarter of 2023 as interest rates rose higher and faster than anticipated. Mortgage approvals, which in Q1 recovered from the low levels seen in Q4 2022, were reported below the levels seen in the first half of last year. Property prices have held up reasonably well but transactions have slowed, leading to a high number of agreed sales being delayed to the second half of the year. Demand for lettings continues to be strong and, representing approximately half of group revenues, this activity will make a good contribution to group income in 2023”. Preliminary gross network income figures for H1 2023 indicate an overall fall of 6%, with lettings revenue approximately 11% higher and sales revenues down by 20% compared with H1 2022.

Grafton Group (GFTU, 790p, £1,687m)

UK, Irish, Dutch builders’ merchant and products group. Q2 (Jun) trading update.

Guidance: “Resilient first half performance in line with expectations. Full year operating profit guidance maintained”. Trading: Group revenue H1, +0.1% Y/Y LFL (Q1 -0.7%; Q2, +0.8%); UK -2.3% (-3.8%; -0.9%); Ireland, -2.6% (-0.5%; -4.5%).

Outlook: “the group remains well positioned due to the strength of its market leading brands, geographic diversity and exceptionally strong balance sheet”.

Helical (HLCL, 267p, £329m)

Commercial real estate investor, focused on London and Manchester offices. Property JV. Further to the announcement on 15 February that Transport for London’s wholly owned commercial property company had selected Helical as its preferred investment partner for its sustainable commercial office portfolio across central London, contracts have now been signed confirming Helical as the joint venture partner.  The partnership will see the delivery of new high-quality and sustainable office space above or close to London Tube stations, which currently consist of three new commercial office developments at Bank, Paddington and Southwark, totalling c. 600,000 sq ft. All three sites have full planning permission.

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