Full Year 2026 Springfield Properties PLC Earnings Call

September 16, 2026

[Company Representative] (Equity Development): For Springfield's full year 2026 results investor presentation. Just as we allow people to join the call, I will run through some housekeeping. This session is being recorded, and the video will be circulated in due course and will appear on our website and Springfield's website. There will be a survey at the end of this presentation, so if you could just hang on and stay online, that will pop up on your screens, and if you could complete that, would be very much appreciated. You can also access our research note online with the analyst forecasts, and there will be a Q&A session at the end of the presentation. If you do have any questions for management, just please pop them in the box at the bottom of your screen. I will now hand over to Innes Smith and Iain Logan to run through the presentation for us.

Operator: For Springfield's full year 2026 results investor presentation. Just as we allow people to join the call, I will run through some housekeeping. This session is being recorded, and the video will be circulated in due course and will appear on our website and Springfield's website. There will be a survey at the end of this presentation, so if you could just hang on and stay online, that will pop up on your screens, and if you could complete that, would be very much appreciated. You can also access our research note online with the analyst forecasts, and there will be a Q&A session at the end of the presentation. If you do have any questions for management, just please pop them in the box at the bottom of your screen. I will now hand over to Innes Smith and Iain Logan to run through the presentation for us.

Speaker #2: For the Springfield School Year 2026 results investor presentation, just as we allow people to join the call, I'll run through some housekeeping. This session is being recorded, and the video will be circulated in due course and will appear on our website and Springfield's website.

Speaker #2: There will be a survey at the end of this presentation, so if you could just hang on and stay online, that will pop up on your screens.

Speaker #2: And if you could complete that, it would be very much appreciated. You can also access our research note online with the analyst forecasts, and there will be a Q&A session at the end of the presentation. So, if you do have any questions for management, please just pop them in the box at the bottom of your screen.

Speaker #2: So I will now hand over to Ines Smith and Ian Logan to run through the presentation for us.

Speaker #3: Good morning, everyone. Welcome to the full year results for the 12 months ended 31st May 2026 for Springfield Property PLC. My name is Ines Smith, Chief Executive, and this is Ian Logan, Chief Financial Officer.

Innes Smith: Good morning, everyone. Welcome to the full year results for the 12 months ended 31 May 2026 for Springfield Properties PLC. My name is Innes Smith, Chief Executive, and this is Iain Logan, Chief Financial Officer. Okay, next slide. Two years ago, we had almost GBP 100 million of debt, and we set a very clear strategy that we wanted to clear that debt. We engaged in a selling of land, a tightening on the purse strings, and we are delighted today that we have got money in the bank at the end of the year. A marvelous achievement over the last two years to get there. But whilst we have done that, we have also managed to increase our private sales and increase our housing revenue on the year, and we have managed to hit all our analyst projections and forecasts for this year. We are delighted with the results.

Speaker #3: Okay, next slide. Two years ago, we had almost $100 million of debt, and we set a very clear strategy that we wanted to clear that debt.

Speaker #3: So we engaged in the selling of land, a tightening on the purse strings, and we're delighted today that we've got money in the bank at the end of the year.

Speaker #3: So, a marvelous achievement over the last two years to get us there. But whilst we have done that, we've also managed to increase our private sales and increase our housing revenue on the year, and we've managed to hit all our analyst projections.

Speaker #3: And, you know, forecasts for this year. So we're delighted with the results. In addition to clearing the debt post year-end, we've also paid off McTaggart & Mickle.

Innes Smith: In addition to clearing the debt, post-year end, we have also paid off MacTaggart & Mickel, so GBP 20 million of deferred consideration now done. We have got considerably stronger balance sheet now. Our strategy also involves building some 300 houses for one of the infrastructure network providers. That is some 300 homes which will house workers working on infrastructure projects, basically to upgrade the electricity network. We will then, over four years, rent those houses out, and at the end of them, we will actually explain later, we will have a fantastic asset. We are uniquely placed to deliver this in the north of Scotland because we have got an excellent land holding that we have built up over many, many years. We have got a local plan coming through over the next two years as well, which will also add to that. A really good position.

Speaker #3: So, $20 million in deferred consideration is now done, so we've got a considerably stronger balance sheet now. Our strategy also involves building some 300 houses for one of the infrastructure network providers.

Speaker #3: That's around 300 homes, which will house workers working on infrastructure projects, essentially to upgrade the electricity network. We will then, over four years, rent those houses out, and at the end of that period—as we'll explain later—we will have a fantastic asset.

Speaker #3: We're uniquely placed to deliver this in the north of Scotland, because we've got an excellent land holding that we've built up over many, many years.

Speaker #3: And we've got a local plan coming through over the next two years as well, which will also add to that. So, really good position.

Speaker #3: In terms of logistics, we have the workforce, we have the know-how, we have the experience in that area, and we're very well placed to take advantage of that.

Innes Smith: We have the logistics, we have the workforce, we have the know-how, we have the experience in that area, and we are very well placed to take advantage of that. All of this gives us confidence to increase the dividend to 3 pence, up 50% from 2025, and post-year end, we announced a share buyback program as an effective means to create value for our shareholders. Iain.

Speaker #3: All of this gives us confidence to increase the dividend to £3, up 50% from 2025, and post year-end, we announced a share buyback program as an effective means to create value for our shareholders.

Speaker #3: Yeah.

Speaker #4: Morning, everyone. So again, delighted to be reporting another year of strong financial performance. As Ines mentioned, the highlight ending the year was positive cash compared to the extent of forecasts, which had £10 million of bank debt.

Iain Logan: Morning, everyone. Again, delighted to be reporting another year of strong financial performance. As Innes mentioned, the highlight, ending the year with positive cash compared to the external forecast, which had GBP 10 million of bank debt. We are really pleased with that. If we look at the first slide on private housing, really positive given the current macro environment that private revenue has increased from GBP 156 million to GBP 165 million.

Speaker #4: So, really pleased with that. If we look at the first slide on private housing, it's really positive, given the current macro environment, that private revenue has increased from £156 million to £165 million.

Speaker #3: Could we go back to the previous slide, Rachel? Thank you.

Innes Smith: The previous slide, Rachel. Thank you.

Speaker #4: And we've also seen an increase in average selling price. That's a result of housing mix and underlying pricing. So, a very positive year for private housing.

Iain Logan: We have also seen an increase in average selling price that is a result of housing mix and underlying pricing. A very positive year for private housing. Affordable housing continues to be a really positive story for the group with increased revenue, increased completions, increased average selling price, and again, robust gross margin. We continue to sign contracts based on shorter time periods. That gives us much more certainty over the costs. Given we have still got a housing emergency in Scotland, we see real opportunity in this sector going forward. Just to finish with land sales, the prior year benefited from a significant one-off land sale, that Innes talked about. Worth noting also the land sales in the current year, again, were at 1.2 times the book value, so demonstrating the significant value of our land bank and the strength of our land bank. To the next slide.

Speaker #4: Affordable housing continues to be a really positive story for the group, with increased revenue, increased completions, and increased average selling price. And again, there is a robust gross margin.

Speaker #4: We continue to sign contracts based on shorter time periods, which gives us much more certainty over the cost. And given we've still got a housing emergency in Scotland, we see real opportunity in this sector going forward.

Speaker #4: Just to finish with land sales, the five-year benefited from a significant one-off land sale, as talked about. But it's worth noting also that the land sales in the current year again were at £1.2 times the book value.

Speaker #4: So, demonstrating the significant value of our land bank and the strength of our land bank. The next slide—you can see that revenue was £244 million, versus £280 million.

Iain Logan: You can see that revenue was GBP 244 million versus GBP 280 million. The GBP 280 million, as we said, benefited from the one-off land sales. Again, that evidences how strong the performance has been from private and affordable. Gross margin 16.4% versus the prior year 18.6%. However, if you remove the land sales in both years, the margin would have been 15.8% in 2026 versus 14.6% in 2025. Administrative expenses are reduced by 8%, from GBP 27.6 million to GBP 25.4 million. Again, a measure of our ongoing cost control and efficiency savings. Profit before tax and exceptional items, which is one of our key metrics, was GBP 13 million versus GBP 20 million in the prior year. Again, if you remove the one-off land sales last year, the profit this year would have been ahead.

Speaker #4: The £280 million, as we said, benefited from the one-off land sales. And again, that evidences how strong the performance has been from private and affordable.

Speaker #4: Gross margin was 16.4% versus the prior year at 18.6%. However, if you remove the land sales in both years, the margin would have been 15.8% in 2026 versus 14.6% in 2025.

Speaker #4: Administrative expenses have reduced by 8%, from £27.6 million to £25.4 million—again, a measure of our ongoing cost control and efficiency savings. Profit before tax and exceptional items, which is one of our key metrics, was £13.0 million versus £20.0 million in the prior year.

Speaker #4: Again, if you remove the one-off land sales last year, the profit this year would have been ahead. As highlighted at the start, we're really, really pleased to have ended with positive cash in the bank at 31 May 2026, versus a prior year where we had £21 million of debt.

Iain Logan: As highlighted at the start, we are really, really chuffed to have ended with positive cash in the bank at 31 May 2026, versus the prior year, where we had GBP 21 million of debt. Again, to finish the slide, really pleased to have increased the dividend again from two pence to three pence. Next slide. This is the usual slide that maps us going from the bank debt position of GBP 21 million at May 2025 to positive cash at May 2026. As Innes said, we put a strategy in place a couple of years ago, and it is really pleasing to see that that has been delivered successfully. The main movements over the 12 months, we have GBP 20 million of cash coming in from land sales alongside GBP 18 million of operating profit.

Speaker #4: And again, to finish the slide, really pleased to have increased the dividend again from £2 to £3. Next slide. So this is the usual slide that maps us going from the bank debt position of £21 million in May 2025 to the positive cash of May 2026.

Speaker #4: As Ines said, we put a strategy in place a couple of years ago, and it's really pleasing to see that that's been delivered successfully.

Speaker #4: The main movements over the 12 months: we've got £20 million of cash coming in from land sales, alongside £18 million of operating profit. In terms of outflows, we've invested £11 million in new land purchases.

Iain Logan: In terms of outflows, we have invested GBP 11 million in new land purchases, and we have also spent GBP 8 million on tax and bank interest. Again, worth highlighting that we had a year where we have finished with cash ahead of the external projections in the market. The next slide. The key thing here is that we continue to grow our net assets. Our net assets at May 2026 were GBP 179 million. The fact that we have ended our year with cash has allowed us, as planned, to reduce our bank facilities from GBP 80 million to GBP 50 million. As Innes mentioned, we had a final deferred consideration payment to make to MacTaggart & Mickel that was sitting on the balance sheet at May 2026 at GBP 21 million. So repaying that again strengthens our balance sheet as we move forward. Next slide. This is another really key positive metric.

Speaker #4: And we've also spent £8 million on tax and bank interest. And again, it's worth highlighting that we had a year where we've finished with cash ahead of the external projections in the market.

Speaker #4: The next slide. The key thing here is that we continue to grow our net assets. So, our net assets at May 2026 were £179 million.

Speaker #4: The fact that we've ended our year with cash has allowed us, as planned, to reduce our bank facilities from £18 million to £15 million.

Speaker #4: And as Ines mentioned, we had a final deferred consideration payment to make to McTaggart & Mickle. That was sitting on the balance sheet at May 2026 at £21 million.

Speaker #4: So, repaying that again strengthens our balance sheet as we move forward. Next slide. This is another really key positive metric. You see significant growth in net asset value from £57 million at listing to today's £179 million in that period.

Iain Logan: You see the significant growth in net asset value from GBP 57 million on listing to today's GBP 179 million. In that period, we have paid dividends of GBP 26 million, and we have a compound share growth rate of 16%. Really pleasing set of results this year.

Speaker #4: We've paid dividends of £26 million, and we've got our compound share growth rate at 16%. So yeah, really, really pleasing set of results this year.

Speaker #3: Can I just add, in other years we've got very strong land banks—7,000 plots owned and contracted. And we also have about 6,000 to 7,000 coming through the latest local plans that are being approved over the next two to three years.

Innes Smith: As in other years, we have very strong land banks, 7,000 plots owned and contracted, and we also have about 6,000, 7,000 coming through the latest local plans that are being approved over the next 2 to 3 years. The strengthening of the balance sheet, I guess one thing to touch on, has enabled us to complete the land sale program. So where we were probably looking at winding down a bit in central belt and only having 2 or 3 sites, we actually have some sites that we are now going to develop ourselves as opposed to sell. The reason we are doing that is because it makes more efficient use of the overheads. We make more profit from the sites. We have the cash to do this. It also retains staff, which can also help us out with some of the projects in the north.

Speaker #3: The strengthening of the balance sheet, I guess one thing to touch on, has enabled us to complete the land sale program. So, where we were probably looking at winding down a bit in the Central Belt and only having two or three sites, we actually have some sites that we're now going to develop ourselves as opposed to sell.

Speaker #3: The reason we're doing that is because it makes more efficient use of the overheads. We make more profit from the sites, and we've got the cash to do this.

Speaker #3: And it also retains staff, which can also help us out with some of the projects in the North. There is going to be a shortage of labour in the North with all of the work that's going on there.

Innes Smith: There is going to be a shortage of labor in the north with all of the work that is going on there, so retaining architects and engineers, et cetera, is a very good thing. Moving on. Capitalizing on the opportunities in the north. Today, we expect to sign the first main works agreement. It has been a long time coming. We obviously had the initial work signed for the 300 houses. That has allowed us to put a lot of the infrastructure, a lot of the groundworks, and get started on the 6 or 7 sites. Now we will have our main works agreement signed today, which means that the houses, which are now ready in one of our sites, some 39 houses, they have already got furniture in them. They are all kitted out. They are ready to move in, and that will be signed imminently.

Speaker #3: So, retaining architects and engineers, etc., is a very good thing. Moving on, capitalising on the opportunities in the North. Today, we expect to sign the first main works agreement.

Speaker #3: It's been a long time coming. We obviously had the initial work signed for the £300 houses. That's allowed us to put a lot of the infrastructure, a lot of the groundworks, and get started on the six or seven sites.

Speaker #3: Now, we'll have a main works agreement signed today, which means that the houses which are now ready in one of our sites—from 39 houses that have already got furniture in them—they're all kitted out, they're ready to move in.

Speaker #3: And that will be signed imminently. Obviously, we'll make a further announcement when that gets signed, so that'll be some further good news.

Innes Smith: Obviously, we will make a further announcement when that gets signed. So that will be some further good news. The actual project that we are looking at, if you can look at the next slide. So what we basically do is we basically identified 6 sites which were not in our current program. We had planning. We owned the sites. We then basically sign a contract. We get an initial works agreement, which we will get 5% of the gross development value up front, and it pays for all the infrastructure and stuff to get started. We will then sign a main works contract once we hand over the houses, and at that point, we pretty much get the construction costs all paid for.

Speaker #3: The actual project that we're looking at—if you can look at the next slide. So what we basically do is, we basically identified six sites which were not in our current program.

Speaker #3: We had planning, we owned the sites. We then basically sign a contract—we get an initial works agreement, where we'll get 5% of the gross development value up front, and it pays for all the infrastructure and stuff to get started.

Speaker #3: We will then sign a main works contract once we hand over the houses, and at that point, we pretty much get the construction costs all paid for.

Speaker #3: Over the next four years, we get a rental, so for 48 months, and that covers our service costs. Obviously, we'll make a profit on that throughout those years.

Innes Smith: Over the next 4 years, we get a rental, so for 48 months, and that covers our service cost, and obviously, we will make a profit on that throughout those years. Then at the end of the period 2 things happen. Half of the houses go back to the council for guarantees. I think it is about GBP 120,000 a house. Now, obviously, the rentals have been The costs that have came up front cover the discount that we have to offer there. But then we have half of the homes left that we can sell, rent on, do with as we please. But they are largely paid for, so there will be a huge cash generation at that point if we decide to sell.

Speaker #3: And then at the end of the period, two things happen. Half of the houses go back to the council for a guaranteed price of about £120,000 a house.

Speaker #3: Now, obviously, the rentals have been the costs that have come up front to cover the discount that we have to offer there. But then we have half of the homes left that we can sell, rent on, or do with as we please.

Speaker #3: But they're largely paid for, so it will be a huge cash generation at that point if we decide to sell. There is also, I should say, an option for the providers to extend the lease by 18 months, which we would obviously be more than happy to do because it continues the profits for a further 18 months.

Innes Smith: There is also, I should say, an option for the providers to extend the lease by 18 months, which we would obviously be more than happy to do because it continues the profits for a further 18 months. The Archil projects, for those that don't know, the opportunity is, if you go back to previous slide, number 12, the opportunities, as you can see, the UK currently uses some 50 gigawatts of power at its peak, and that's estimated to go up to 100 gigawatts over the next 10 years. We need more power. Scotland has excellent wind because of the consistency, because of the depths of the ocean, and that wind basically needs to get shipped all across the UK. Some 97% of Scotland's energy currently comes from renewable, and it's 50% in England.

Speaker #3: The actual projects, for those that don't know, the opportunities—if we go back to previous slides, number 12—the opportunities, as you can see, the UK currently uses some 50 gigawatts of power at its peak.

Speaker #3: And that's estimated to go up to 100 gigawatts over the next 10 years. So we need more power. Scotland has excellent wind because of the consistency, and because of the depth of the ocean.

Speaker #3: And that wind basically needs to get shipped all across the UK. Some 97% of Scotland's energy currently comes from renewables, and it's 50% in England.

Speaker #3: So, if you think England's market is probably going to be 10 times the size of Scotland, then there's obviously a huge requirement for more energy. But more energy is required because we have electric cars, because we have air source heat pumps, because of data centres—all various things mean we need more power, and we need to be able to transmit that power.

Innes Smith: If you think England market's probably going to be 10 times the size of Scotland, then there's obviously huge requirement for more energy. But the more energy is required because we have electric cars, because we have air source heat pumps, because of data centers, all various things mean we need more power, and we need to be able to transmit that power. Because it's happening in the north, then all of the pylons need to be kind of upsized, the substations need to be upgraded. It's significant amounts of work. SSEN alone are spending GBP 20 billion on upgrading the network. Then you throw in hydro schemes and various other projects and offshore wind, and also the freeports. Don't forget the freeports. There's four freeports there with significant investment going in there. A lot of jobs being created.

Speaker #3: Because it's happening in the North and all of the pylons need to be kind of up-sized, the substations need to be upgraded. So it's a significant amount of work.

Speaker #3: SSEN alone are spending £20 billion on upgrading the network. Then you throw in hydro schemes and various other projects, and offshore wind, and also the freeports.

Speaker #3: Don't forget, the freeports are for freeports – that's where there's significant investment going in. So, a lot of jobs are being created, so we've seen a very strong market on the private side.

Innes Smith: We've seen a very strong market on the private side, and obviously this will be a kind of anti-cyclical area of economic growth for the next foreseeable future. Moving forward to the next slide. The next one, yeah. Private housing. We offer an energy efficient. It's timber kit houses, air source heat pumps, so very energy efficient houses. Customer gets to choose their paint colors, they get to choose their kitchens, all of the things that separate us from our competition. We do have a higher average sales price, as we'll see further on, than the Scotland average. It's higher spec houses, slightly larger houses, some 1,200 foot for that for a four-bed, which is slightly larger than some of the competition. We're pleased to announce that we increased the revenue this year, and we've seen a strong market in the north.

Speaker #3: And obviously, this will be a kind of anti-cyclical area for economic growth for the next foreseeable future. So, moving forward to the next slide. And the next one, yeah.

Speaker #3: So, private housing. We offer energy-efficient timber kit houses with air source heat pumps—so, very energy-efficient houses. Customers get to choose their paint colours.

Speaker #3: They get to choose their kitchens. All of the things that separate us from our competition. We do have a higher average sales price, as you will see further on.

Speaker #3: ...than the Scotland average. So, it's higher-spec houses, slightly larger houses. Some at £1,200 for a four-bed, which is slightly larger than some of the competition.

Speaker #3: And we're pleased to announce that we increased revenue this year, and we've seen a strong market in the North. That has been flat in the rest of Scotland, just in line with the other house builders.

Innes Smith: It has been flat rest of Scotland, just in line with the other house builders. But because we've got the strength in the north, then that's obviously given us good results. Customer satisfaction, we're delighted to see that go up to 97%. That's gone from 93% four years ago up to 97% now. Very pleased to see that our hard work is ending up with an excellent product. Moving on to affordable housing. Again, this has been a core part of our business for many years. Slightly different model in Scotland and England. Scottish Government committed to building 110,000 houses over 10 years. We're about halfway through that, and we're behind on the houses at the moment.

Speaker #3: But because we've got the strength in the North, that's obviously given us good results. Customer satisfaction—we're delighted to see that go up to 97%.

Speaker #3: That's gone from 93% four years ago up to 97% now, so I'm very pleased to see that our hard work is resulting in an excellent product.

Speaker #3: Moving on to affordable housing. Again, this has been a core part of our business for many years. There's a slightly different model in Scotland than in England.

Speaker #3: The Scottish Government committed to building 110,000 houses over 10 years. We're now over halfway through that period, and we're currently behind on the houses at the moment. But the government has announced—and this was just recently voted in this year—£4.9 billion over four years to increase housing delivery.

Innes Smith: The government have announced, which has just recently voted in this year, GBP 4.9 billion over four years to increase the housing delivery and a record level of annual investment of almost GBP 1 billion this year. Strong fundamentals. Next slide. Strong fundamentals in the Scottish housing market. Bottom right there, you can see the earnings to house price, and you can see Scotland on the far right. There is a lot more affordability in Scotland, around about four to five times, whereas in England it is between five, six, seven. So obviously, there is some direction that the house price could go. Average price down the bottom left there, as I said, we are 348 against an average 196. The annual growth in Scotland has been 4.4%, so house price inflation is slightly higher than England.

Speaker #3: And a record level of annual investment of almost £1 billion this year. Strong fundamentals. Next slide. Strong fundamentals in the Scottish housing market.

Speaker #3: Bottom right there, you can see the earnings-to-house-price ratio. And you can see Scotland on the far right—there's a lot more affordability.

Speaker #3: In Scotland, it's around about four—four to five times—whereas in England it's between five, six, seven. So, obviously, there is some direction that the house price could go.

Speaker #3: Average price down at the bottom left there, as I said, we're at £348,000 against an average of £196,000. The annual growth in Scotland has been 4.4%.

Speaker #3: So house price inflation is slightly higher than England. Which is kind of covering the cost price inflation we're seeing, which has not been anywhere near as bad as we kind of expected with all of the stuff that's going on with the war, etc.

Innes Smith: Which is kind of covering the cost price inflation we are seeing, which has not been anywhere near as bad as we kind of expected with all of the stuff that is going on with the war, et cetera. So we have been covering that. The north of Scotland dynamic. I have mentioned some 10.5 million beds are going to be required through to 2040. So that means more beds, effectively means more houses are required. The other thing, this is the final one, is we saw the government reduce the rent cap or remove the rent cap, which was a spectacular failure, to be quite honest. It largely predicted by all. We have been speaking to the likes of Octopus, Phoenix, Standard Life, all of these Legal & General, all these guys are coming back and looking at things.

Speaker #3: So yeah, we've been covering that—the North of Scotland dynamic. I've mentioned that some 10.5 million beds are going to be required through to 2040.

Speaker #3: So, that means more beds needed effectively means more houses are required. And the other thing, just as a final one, is we saw the government reduce the rent cap, or remove the rent cap, which was a spectacular failure, to be quite honest.

Speaker #3: It was largely predicted by all. But we have been speaking to the likes of Octopus, Phoenix, Standard Life, Legal & General—all these guys are coming back.

Speaker #3: I'm looking at things, and we have been speaking to one of them about a potential ET House project in the north of Scotland. So that looks quite exciting, that we get back into the bolster rent.

Innes Smith: We have been speaking to one of them about potential BTR projects in the north of Scotland. So that looks quite exciting as we get back into the build-to-rent market. Commitment to environment and people. It is really important to us, especially with the north, that we continue with our apprentice programs. To the right there, you can see young Dean Murdoch. He won the Apprentice of the Year in Scotland, so a fantastic achievement. We have got lots and lots of good apprentices, and Dean is just one of many who probably could have won that award. So it is important to invest in your people, it is important to have motivated staff, and it is important that we retain them. So we are slightly different to other house builders. We have plumbers, we have scaffolders, brickies, joiners, all of these guys are on the books.

Speaker #3: Market. Commitment to environmental people—it's really important to us, especially with the North, that we continue with our apprentice programmes to the right there.

Speaker #3: You can see young Dean Murdoch; he won the Apprentice of the Year in Scotland—so a fantastic achievement. But we've got lots and lots of good apprentices.

Speaker #3: And Dean's just one of many who probably could have won that award. So it's important to invest in your people. It's important to have motivated staff.

Speaker #3: And it's important that we retain them. So we're slightly different from other house builders. We have plumbers, we have scaffolders, brickies, joiners—all of these guys are on the books.

Speaker #3: So we stay away from the pure subby model. In the North, retaining staff is easier if you employ them as opposed to subbies, who can come and go.

Innes Smith: So we stay away from the pure subby model in the north because retaining staff is easier if you employ them as opposed to subbies where you can come and go. Regarding the environment, I have mentioned it is really important for us that we build efficient houses, that we build good communities because it all adds to the sales. So I actually see these things as helping our sales, building an efficient house, building a good community, making sure you get on with your local community. All of these things are very positive things for our sales. In conclusion, we have executed our strategy. We are obviously taking advantage of all of the opportunities we can in the north of Scotland. We have strengthened our balance sheet. We have grown the house building, both in the private and affordable, and we are looking at PRS.

Speaker #3: Regarding the environment, I've mentioned it's really important for us that we build efficient houses, that we build good communities, because it all adds to the sales.

Speaker #3: So I actually see these things as helping our sales: building an efficient house, building a good community, making sure you get on with your local community—all of these things are very positive things for our sales.

Speaker #3: So, in conclusion, we have executed our strategy. We are obviously taking advantage of all of the opportunities we can in the north of Scotland.

Speaker #3: We've strengthened our balance sheet. We've grown the house building, both in the private and affordable sectors. And we're looking at PRS. Our land bank is still of high quality.

Innes Smith: Our land bank is still of high quality, and we are looking at improving that over the next two to three years as the latest local plan goes through. All of this is delivering shareholder value. We are able to increase the dividend, and we are able to commence a share buyback program because we believe the shares are currently undervalued. I would like to thank you, and I would like to open up for questions now.

Speaker #3: And we're looking at improving that over the next two to three years as the latest local plan goes through. All of this is delivering shareholder value.

Speaker #3: So, we're able to increase the dividend, and we're able to commence a share buyback programme because we believe the shares are currently undervalued. So, I'd like to thank you.

Speaker #3: And I'd like to open it up for questions now.

Speaker #1: All right. Thank you for running through that presentation. I will move on to Q&A now. We've got quite a number that are coming in.

[Company Representative] (Equity Development): Great. Thank you for running through that presentation. I will move on to Q&A now. We have got quite a number that are coming in. If we look at the land banking strategy, you completed the land disposal program and decided to develop your remaining central Scotland land holdings. How should investors think about land sales and land investment going forward, across both central and the north of Scotland?

Operator: Great. Thank you for running through that presentation. I will move on to Q&A now. We have got quite a number that are coming in. If we look at the land banking strategy, you completed the land disposal program and decided to develop your remaining central Scotland land holdings. How should investors think about land sales and land investment going forward, across both central and the north of Scotland?

Speaker #1: So, if we look at the land bank and strategy, you've completed the land disposal programme and decided to develop your remaining Central Scotland land holdings.

Speaker #1: How should investors think about land sales and land investment going forward across both central and the north of Scotland?

Innes Smith: Two, three years ago, we decided that what was important for Springfield Properties to do was to be a profitable company. While we do have a strategy and we have said we have stopped selling land, obviously, if someone comes up with a silly offer for a bit of land, then we will consider it, and if it represents good value, then we may well do it. But we will concentrate. We have got a number, certainly on the land buying side, which is important. We are going through local plans. All of Scotland is pretty much going through local plan approval over the next two to three years, and we have got significant land holdings that we are representing in the north of Scotland. So our focus is on them. There are two sites which we are working with The Highland Council on, which are called Masterplan Consent Area sites.

Speaker #2: Two or three years ago, we kind of decided that what was important for Springfield to do was to be a profitable company. And whilst we do have a strategy and we've said we've stopped selling land, obviously, if someone comes up with a silly offer for a bit of land, then we'll consider it.

Speaker #2: And if it represents good value, then we may well do it. But we'll concentrate. We've got a number, certainly on the land buying side, which is important.

Speaker #2: We're going through local plans. All of Scotland has pretty much gone through local plan approval over the next two to three years. And we've had significant land holdings that were represented in the north of Scotland.

Speaker #2: So our focus is on them. There are also two sites that we’re working with Highland Council on, which are called Masterplan Consent Area sites.

Speaker #2: And these are sites that fall outwith the local plan but can be promoted by the council. So, we see it as very important that we continue to grow our land bank.

Innes Smith: These are sites that fall out with the local plan but can be promoted by the council. So we see it as very important that we continue to grow our land bank. Just this week, we have actually bought two pieces of land. Sandy has been busy for us. Sandy, unfortunately, not down in London. He is staying this week, and he has bought two pieces of land while I have been away. So we are very much wanting to use our cash to continue to grow the company and to continue to give us opportunities going forward.

Speaker #2: Just this week, we've actually bought two pieces of land. Sandy's been busy—for Sandy, unfortunately not down in London. He's staying this week, and he's bought two pieces of land while I've been away.

Speaker #2: So we are very much wanting to use our cash to continue to grow the company and to continue to give us opportunities going forward.

Speaker #1: Great. And while we're on the subject, can you maybe talk a little bit about planning permission and how that’s improved? I know it's probably quite different given the Highland Council and the Master Plan, but could you run people through that, please?

[Company Representative] (Equity Development): Great. While we are on the subject, can you maybe talk a little bit around planning permission, and has that improved? I know it is probably quite different given The Highland Council and the Masterplan Consent Area, but could you run people through that, please?

Operator: Great. While we are on the subject, can you maybe talk a little bit around planning permission, and has that improved? I know it is probably quite different given The Highland Council and the Masterplan Consent Area, but could you run people through that, please?

Speaker #2: Yeah, I think Sandy touches on it in the annual report. We're fortunate—we've got a good land bank, with a lot of it with planning.

Innes Smith: Yeah. I think Sandy touches on it in the annual report. We are fortunate we have got a good land bank with a lot of it with planning. The planning is absolutely hopeless. The governments keep introducing new regulations and new rules, and it makes it really difficult. On one side, that creates a lot of value in our land bank, but on the other side, it makes it difficult getting stuff through. That is why our relationships with landholders in the north and our long-term deals and our identifying of good sites and our knowledge of the area is going to prove very important over the next two to three years. But it is extremely difficult to get planning. We have a housing emergency in Scotland since 2024, and there is going to be a More Homes Scotland.

Speaker #2: But planning is absolutely hopeless. The government keeps introducing new regulations and new rules, and it makes it really difficult. So, on one side, that creates a lot of value in our land bank.

Speaker #2: But on the other side, it makes it difficult getting stuff through. So that's why our relationships with landholders in the North, our long-term deals, our identifying of good sites, and our knowledge of the area are going to prove very important over the next two to three years.

Speaker #2: But it is extremely difficult to get planning. We have a housing emergency in Scotland since 2024, and there's going to be a housing task agency.

Speaker #2: I forget what the title is, but it's going to be set up in the middle of next year. In that time, we've had two prime ministers.

Innes Smith: I forget what the title is, but it is going to be set up middle of next year. In that time, we have had two prime ministers. That is them setting up a committee to look at housing. Yeah, I think we need to focus on what we are good at and get on with it and do it in spite of government, not with the help of government, is my own opinion.

Speaker #2: And that's them setting up a committee to look at housing. So yeah, I think we need to focus on what we're good at and get on with it, and do it in spite of government, not with the help of government, is my own opinion.

Speaker #1: Perfect, thank you. And just for our viewers who may be less familiar with the region, can you give us a sense of what's actually happening on the ground up in the north of Scotland in terms of infrastructure, activity, housing demand, and accommodation requirements?

[Company Representative] (Equity Development): Thank you. Just for our viewers that are maybe less familiar with the region, can you give us a sense of what is actually happening on the ground up in the north of Scotland in terms of infrastructure, activity, housing demand, and accommodation requirements and what it looks like at the minute?

Operator: Thank you. Just for our viewers that are maybe less familiar with the region, can you give us a sense of what is actually happening on the ground up in the north of Scotland in terms of infrastructure, activity, housing demand, and accommodation requirements and what it looks like at the minute?

Speaker #1: And what does it look like at the minute?

Speaker #2: Yeah. So the transient workforce is what they did. They had all of the project managers for Balfour Beatty, for Van Nuttall, Murphy's, for SSE.

Innes Smith: Yeah. The transient workforce is already there. All of the project managers for Valsubi, for BAM Nuttall, Mercies, for SSE. A lot of the infrastructure, the planning, and those guys are up there. If you look for hotel rooms, they are up at GBP 400 a night through the summer when you are looking for them, which is really for like a Holiday Inn or one of those kind of hotels, and that is extremely expensive. There are no properties for rent because there are not enough beds. The local government is looking at doing short-term let regulations. That is just shifting the deck chairs on the Titanic, so to speak. It is not creating more beds. It is just shuffling the beds you have got. There is a huge shortage. The SSEN predicts 5,000 transient workers will be going up.

Speaker #2: So a lot of the kind of infrastructure, the planning, and those guys are up there. And if you look for a hotel rooms are up at 400 quid a night through the summer when you're looking for them, which is really flashed out like a holiday in or a one of those kind of hotels.

Speaker #2: And that's extremely expensive. There are no properties for rent because there aren't enough beds. The local government's looking at doing short-term let regulations. That's just shifting the deck chairs on the Titanic, so to speak.

Speaker #2: It's not creating more beds. It's just shuffling the beds you've got. So, yeah, there's a huge shortage now. SSEN predict 5,000 transient workers will be going up.

Speaker #2: Freeport is predicting some 10,000 to 12,000 workers over the next 5 to 10 years. And those Freeports this year are named Cromarty and Inverness.

Innes Smith: Freeport is predicting some 10,000 to 12,000 workers over the next 5 to 10 years. Those freeports are Ardersier, Nigg, Cromarty, and Inverness. I have mentioned it before, the significant amounts of investment. Sumitomo are just opening up a cable factory over the next year, GBP 350 million worth of investment. Lots of jobs getting created. We were unfortunate that the Labour government decided that the GBP 1.5 billion MingYang investment was a security risk. I am not sure what security risk a wind turbine is. All the electronics were going to be made in the UK. There seems to be a very strange decision. John Swinney is questioning that decision, as are many people saying, "Why was that made?" Maybe without Starmer, who knows? Maybe we get a different decision. They have signed a memorandum of understanding with another Chinese organization.

Speaker #2: And as I’ve mentioned before, there are significant amounts of investment. Sumitomo are just opening up a cable factory over the next year, with £350 million worth of investment.

Speaker #2: So, lots of jobs getting created. We were unfortunate that the Labour government decided the £1.5 billion MingYang investment was a security risk. I'm not sure what security risk a wind turbine is— all the electronics are going to be made in the UK.

Speaker #2: So, there seems to be a very strange decision. Now, John Swinney is questioning that decision, as are many people, saying, why was that made? Now, maybe without Starmer—who knows?

Speaker #2: Maybe we get a different decision, but they have signed a memorandum of understanding with another Chinese organisation. So, we are hopeful to see some activity and an increase in activity.

Innes Smith: We are hopeful to see some activity and increase in activity at Ardersier soon. All of that creates jobs, and all of that creates economic growth. That is going to put demand on the workforce, but what it does is push wages up, which effectively, eventually ends up with house prices going up. There is a lot of activity. The planning permission for the substation of the pylons, as usual, everything is getting held up, everything is getting delayed. That is not necessarily a bad thing for us because it gives us plenty time then to build the houses and make sure that we are It is not everything at once. A bit of controlled delay is maybe not a bad thing. You came up to see us recently, and you have seen the level of investment.

Speaker #2: Obviously, all of that creates jobs, and all of that creates economic growth. Now, that's going to put demand on the workforce. But what it does is push wages up, which effectively, eventually, ends up with house prices going up.

Speaker #2: So, there is a lot of activity. The planning permissions for the substations and the pylons—as usual—everything's getting held up. Everything's getting delayed.

Speaker #2: That's not necessarily a bad thing for us, because it gives us plenty of time then to build the houses and make sure that it's not everything at once.

Speaker #2: So a bit of controlled delay is maybe not a bad thing. But you just—I mean, you came up to see us recently and you've seen the level of investment, the amount of—you just need to look at the number of these vans that are driving around with Balfour Beatty and BAM Nuttall on them.

Innes Smith: You just need to look at the amount of these vans that are driving around with Balfour Beatty and Maccallum on it.

Speaker #2: And our car park in Elgin is full of these vans. So they are here, and there is a lot of economic activity going on.

Iain Logan: Yeah.

Innes Smith: Our car parks in Elgin are full of these vans. They are here, and there is a lot of economic activity going on.

Speaker #1: Great, thank you. And while we're on the subject, are you starting to see an uplift in house prices in the north of Scotland?

[Company Representative] (Equity Development): Great. Thank you. While we are on the subject, are you starting to see an uplift in the house prices in the north of Scotland? How does that compare with the rest of the country? I know you touched on it briefly. Could you go into a little bit more detail on that?

Operator: Great. Thank you. While we are on the subject, are you starting to see an uplift in the house prices in the north of Scotland? How does that compare with the rest of the country? I know you touched on it briefly. Could you go into a little bit more detail on that?

Speaker #1: And how does that compare with the rest of the country? I know you touched on it briefly. Could you go into a little bit more detail on that?

Speaker #2: Ian, do you want to?

Innes Smith: Iain, do you want to do it?

Speaker #3: Yeah, I think the north of Scotland is performing really well. If we look at the post-year-end house sales, that region is definitely seeing an impact from what Ben has talked about.

Iain Logan: Yeah, I think the north of Scotland is performing really well. If we look at the post year-end house sales, that region has definitely seen an impact from what Innes has talked about. There is no doubt that we are seeing better sales rates. Yeah, I think there is an inevitability that the prices will start to increase. We talked about the affordability in Scotland and the metrics around that. It definitely helps. I think in the rest of our sites in central Scotland, they are steady. We have still got lots of very good sites. Yeah, we are certainly seeing good activity. Yeah, we just have to keep working hard. The north of Scotland is definitely benefiting at the moment from what is going on.

Speaker #3: There's no doubt that we're seeing better sale rates, and yeah, I think there's an inevitability that prices will start to increase. And we talked about the affordability in Scotland and the metrics around that.

Speaker #3: It definitely helps. And I think in the rest of the sort of our sites in central Scotland, they're steady. But there's still we've still got lots of very good sites.

Speaker #3: And yeah, we're certainly seeing good activity. And yeah, we just have to keep working hard. But the north of Scotland is definitely benefiting at the moment from what's going on.

Speaker #1: Great, thank you. And while we're on the north of Scotland, as activity accelerates in the north of Scotland, do you have sufficient operational capacity and supply chain resources to meet that demand?

[Company Representative] (Equity Development): Great. Thank you. While we are on the north of Scotland, as activity accelerates in the north of Scotland, do you have sufficient operational capacity and supply chain resource to meet that demand, or will you need to put in additional investment?

Operator: Great. Thank you. While we are on the north of Scotland, as activity accelerates in the north of Scotland, do you have sufficient operational capacity and supply chain resource to meet that demand, or will you need to put in additional investment?

Speaker #1: Or will you need to put in additional investment?

Speaker #2: Oh, it's undoubted that we need additional investment to open up sites. We're going to need to continue training people. One of the advantages we have—and we've got two or three people I can think of immediately in the Central Belt—that are now working for the North of Scotland.

Innes Smith: Oh, it is undoubtedly we are going to need additional investment to open up sites. We are going to need to continue training people. One of the advantages we have, and we have two or three people I can think of immediately in the central belt that are now working for the north of Scotland. That is actually given us a resource. You do not necessarily need to be located in the north of Scotland. You can do a lot of things like engineering and architects and planning can be done remotely. That is something that gives us a bit of extra capacity. But yeah, there is going to be pressure on labor, without a shadow of a doubt. When a gold rush happens, then people become really important.

Speaker #2: And so, that's actually given us a resource. You don't necessarily need to be located in the north of Scotland. You can do things like engineering, and architects, and planning can be done remotely.

Speaker #2: So, that is something that gives us a bit of extra capacity. But yeah, there's going to be pressure on labour, without a shadow of a doubt.

Speaker #2: And yeah, when a gold rush happens, then people become really important. So yes, I can see a lot of influx, not just of people working on the infrastructure, but also people looking at working for us and looking at working in other areas.

Innes Smith: Yes, I can see a lot of influx, not just on the people working on the infrastructure, but also looking at working for us and looking at working in other areas. As people move up here, we are going to need more teachers, we need more post people, more Tesco workers, et cetera. There really is a lot of people are going to be required. I have no doubt that will become a pressure point. But that is where us employing our own joiners, plumbers, electricians, the scaffolders, is really important.

Speaker #2: If people move up here, we're going to need more teachers. We need more postal workers and more Tesla workers, etc., etc. So there really are a lot of people who are going to be required.

Speaker #2: And I have no doubt that will become a pressure point. But that's where us employing our own joiners, planners, electricians, and scaffolders is really important.

Speaker #2: So yeah.

Speaker #1: And if we look at the building lease, do you have, or are you planning on having, a dedicated team in place to manage those properties leased?

[Company Representative] (Equity Development): If we look at the build-to-lease, do you have or are you planning on having a dedicated team in place to manage those properties leased?

Operator: If we look at the build-to-lease, do you have or are you planning on having a dedicated team in place to manage those properties leased?

Speaker #2: Yes, so we will have a contractor company that will look after the cleaning and replacement of things. And there's an emergency line that the customers—the tenants—will be able to phone to resolve things.

Innes Smith: Yeah. We will have a factor company that will look after the cleaning and replacement of things. There is an emergency line that the tenants will be able to phone to resolve things. When it comes to the ground maintenance, equally, that will be subcontracted out. We are not looking at doing all of that ourselves. That will be farmed out. We are also looking, just in addition to that, we are going to look at building some 40 houses per year, speculative kind of flats, speculative. We think they will be snapped up by our existing people. If not, then it is there for other organizations and businesses to do commercial rents from us on that. If there is not an interest in that, we just sell them. There is no real risk to that. We see that as a potential for increasing this.

Speaker #2: When it comes to the ground maintenance, equally, that will be subcontracted out. So we're not looking at doing all of that ourselves—that will be farmed out.

Speaker #2: And we're also looking just in addition to that, we're going to look at building some 40 houses per year spec of kind of flat speculative.

Speaker #2: And we think they'll be snapped up by our existing people. But if not, then it's there for other organisations and businesses to do commercial rents from us on that.

Speaker #2: And if there isn't interest in that, we just sell them, so there's no real risk to that. We see that as a potential for increasing this.

Speaker #2: What the rental properties do is give us an annuity going forward, providing constant income and constant profits. We see that as a very sensible business model.

Innes Smith: Because what the rental properties do is give us an annuity going forward, that we have got constant income, constant profits, and we see that as a very sensible business model, albeit slightly different to the other house builders. Although Berkeley are looking at doing a similar thing, some are going this direction. It means we cannot really cookie-cutter skits with the rest of the volume house builders. To us, it is more about having a really good balance sheet and having good profits, and that is what is most important. I am sure there are investors out there who will like that.

Speaker #2: Albeit slightly different to the other house that was a little Barclay, I'm looking at doing a similar thing — some hardware in this direction. But yes, it means you can't really cookie-cut us just with the rest of the volume housebuilders.

Speaker #2: But to us, it's more about having a really good balance sheet and having good profits, and that's what's most important. I'm sure there are investors out there who will like that.

Speaker #1: Great. And while we're touching on the subject, what activity are you seeing from other housebuilders in the north of Scotland? Are you seeing much?

[Company Representative] (Equity Development): Great. While we are touching on the subject, what activity are you seeing from other house builders in the north of Scotland? Are you seeing much? I know that is kind of your stomping ground, is not it? You have got a good land bank up there. What else are you seeing?

Operator: Great. While we are touching on the subject, what activity are you seeing from other house builders in the north of Scotland? Are you seeing much? I know that is kind of your stomping ground, is not it? You have got a good land bank up there. What else are you seeing?

Speaker #1: I mean, I know that's kind of your stomping ground, isn't it? And you've got a good land bank up there. What else are you seeing?

Speaker #2: Yeah. The only house builder that most of the people on here would recognise is probably Barratt. Then Taylor Wimpey, for someone, Cala, Bellway. None of those guys go north of Perth, to be honest.

Innes Smith: The only house builder that most of the people on here would recognize is probably Barratt. Taylor Wimpey, Persimmon, Cala, Bellway, none of those guys go north of Perth, to be honest. We have kind of got a run of it there. There are some local house builders that we compete with, and there is plenty for everyone. We have certainly got our fair share of it, and long may that continue.

Speaker #2: So, yeah, we've kind of got a run of it there. There are some local house builders that we compete with, and there's plenty for everyone.

Speaker #2: But we've certainly got our fair share of it. And along with that—continue.

Speaker #1: And presumably, there'll be further conversations with other infrastructure providers about the building lease model?

[Company Representative] (Equity Development): Presumably, there will be further conversations with other infrastructure providers about the build-to-lease model.

Operator: Presumably, there will be further conversations with other infrastructure providers about the build-to-lease model.

Speaker #2: Yeah, yeah. So we've been speaking to companies that are doing the hydro schemes. We're putting our name out with some of the factories that are getting put up.

Innes Smith: Yeah. We have been speaking to companies that are doing the hydro schemes. We are putting our name out with some of the factories that are getting put up. Yeah, there will be opportunities, and I mentioned the PRS, they are specifically building those 80 for this reason, that they see there is going to be a market of, that is going to be individual renters. Now, we do not want to go down the individual renters route. We want to go the commercial route. It is safer, it gives us a more guaranteed occupancy and just a little less hassle and a little less work required.

Speaker #2: So yeah, so there's going to be there will be opportunities. And I mentioned the PRS. They're specifically buying building those 80 for this reason that they see there's going to be a market of that's going to be individual renters.

Speaker #2: Now, we don't want to go down the individual renters route. We want to go the commercial route—that's safer. It gives us a more guaranteed occupancy.

Speaker #2: And just a little less hassle and a little less work required.

Speaker #1: Great. And you’ve done a lot of talking, Innocent. Maybe a question for Ian on capital allocation. With the balance sheet now significantly strengthened, what are you thinking about capital allocation priorities between growth investment, shareholder returns, and acquisitions?

[Company Representative] (Equity Development): Great. You have done a lot of talking, Innes, so maybe a question for Iain on capital allocation. With the balance sheet now significantly strengthened, what do you think about capital allocation priorities between growth investment, shareholders' return, and acquisitions, because obviously that has been part of what Springfield have done historically. What are your thoughts on that now?

Operator: Great. You have done a lot of talking, Innes, so maybe a question for Iain on capital allocation. With the balance sheet now significantly strengthened, what do you think about capital allocation priorities between growth investment, shareholders' return, and acquisitions, because obviously that has been part of what Springfield have done historically. What are your thoughts on that now?

Speaker #1: Because, obviously, that has been part of what Springfield have done historically. What are your thoughts on that now?

Speaker #2: Yeah, I think all of those aspects are important. So if we start with the existing business, over the next two or three years, we're starting a number of new sites in the north of Scotland.

Iain Logan: Yeah, I think all of those aspects are important, really. If we start with the existing business, over the next 2 or 3 years, we are starting a number of new sites in the north of Scotland. We are starting new sites in central Scotland, and then as talked about, we have got strategic land that is going through the local plan in the north, and we are going to be acquiring a lot of that land over the next 3 years. So we have got significant investment levels and external forecasts for land purchases. That is what will fuel our business going forward. That is what will drive the increase in our profits over the coming 2 or 3 years that are out there in the market. Absolutely, we see the importance of returns to shareholders. So again, we have increased the dividend last year. We have increased the dividend this year.

Speaker #2: We're starting new sites in central Scotland. As Ennis talked about, we've got strategic land that's going through the local plan in the north, and we're going to be acquiring a lot of that land over the next three years.

Speaker #2: So, we've got significant investment levels and external forecasts. For land purchases, that's what will fuel our business going forward. That's what will drive the increase in our profits over the coming two or three years that are out there in the market.

Speaker #2: Absolutely. We see the importance of returns to shareholders. So again, we've increased the dividend last year; we've increased the dividend this year. If you look at the external market forecasts, again, we see increases in the dividend—return to shareholders—over the next three years.

Iain Logan: If you look at the external market forecasts, again, we see increases in the dividend return to shareholders over the next 3 years. We've introduced a buyback program. We're really looking to do all these things. We want to fund the long-term growth of the business through acquiring the high-quality land that we see in the north. We want to continue increasing the dividends. We see that as really important, and we'll execute on the buyback program. Acquisitions, again, we're a group that is very nimble. If we see an opportunity that we think we can make work, we would go for it. As I say, there's not that many opportunities out there in Scotland at the moment. Again, we'll look at anything that we think can add to the return that we can make for the business and for shareholders.

Speaker #2: We've introduced a buyback program, so we're really looking to do all these things. We want to fund the long-term growth of the business through acquiring the high-quality land that we see in the North.

Speaker #2: We want to continue increasing the dividends; we see that as really important. And we'll execute on the buyback program. Acquisitions—again, we're a group that is very nimble.

Speaker #2: If we see an opportunity that we think we can make work, we would go for it. As I say, there aren't that many opportunities out there in Scotland at the moment.

Speaker #2: But again, we'll look at anything that we think can add to the return that we can make for the business and for shareholders. So, we've got a clear plan over the next three years.

Iain Logan: We've got a clear plan over the next 3 years, and it's about just delivering on that plan as we have done in recent years.

Speaker #2: And it's about just delivering on that plan, as we have done in recent years.

Speaker #1: Great, thank you. You touched briefly on it—cash generation has obviously been a standout feature over recent years. How should investors think about cash generation and working capital dynamics as the building lease model scales up?

[Company Representative] (Equity Development): Great. Thank you. You touched briefly on it. Cash generation has obviously been a standout feature over recent years. How should investors think about cash generation and working capital dynamics as the build-to-lease model scales up?

Operator: Great. Thank you. You touched briefly on it. Cash generation has obviously been a standout feature over recent years. How should investors think about cash generation and working capital dynamics as the build-to-lease model scales up?

Speaker #2: Yeah. I think the beauty of the building lease model is that we do, on the handover of the homes, get this significant payment to cover our construction costs.

Iain Logan: Yeah, I think the beauty of the build-to-lease model is that we do, on the handover of the homes, get this significant payment to cover our construction costs. That's great for us because it means that we have a period to fund the working capital, 6 to 9 months. But as soon as we hand over those homes, we get a lot of that money reimbursed. If you look at our forecasts over the next 2 or 3 years for the Equity Development note, there is a bit of debt over the next 2 or 3 years, but that's for good reason. That's because we are increasing the profits. We're increasing the assets on the balance sheet. Yeah, that's a positive.

Speaker #2: That's great for us because it means that we have a period to fund the working capital—six to nine months. But as soon as we hand over those homes, we get a lot of that money reimbursed.

Speaker #2: So, if you look at our forecasts over the next two or three years for the equity development note, there is a bit of debt over the next two or three years.

Speaker #2: But that's for good reason. That's because we are increasing the profits. We're increasing the assets on the balance sheet. So yeah, that's a positive.

Speaker #2: And the other thing, the beauty of it about the lease model is these are properties that we own, and will be on our balance sheet for the next four or five years. Come the end of that lease term, there's a significant amount of cash we can cash in on from sales of the homes to the councils that Ennis talked about, and the remaining homes selling in the private market.

Iain Logan: The other thing, the beauty of the build-to-lease model is these are properties that we own and will be on our balance sheet for the next 4 to 5 years. Come the end of that lease term, there is a significant amount of cash we can cash in on from sales of the homes to the councils that Anna's talked about and the remaining homes selling in the private market. So whilst we are going through a period over the next 2 or 3 years of investing heavily, we have got this big asset on our balance sheet to cash in for the future.

Speaker #2: So, whilst we're going through a period over the next two or three years of investing heavily, we've got this big asset on our balance sheet to cash in for the future.

Speaker #1: Great, thank you. And one more on financials: gross margins improved in private and affordable in the full year 2026. What's the outlook for the current year?

[Company Representative] (Equity Development): Great, thank you. While we are on financials, gross margins improved in private and affordable in full year 2026. What is the outlook for the current year?

Operator: Great, thank you. While we are on financials, gross margins improved in private and affordable in full year 2026. What is the outlook for the current year?

Speaker #2: Yeah. So again, if you look at the external note that Equity Development put out, we see an increase in the margin in the coming year for '27.

Iain Logan: Yeah. So again, if you look at the external, the note that Equity Development put out, again, we see an increase in the margin in the coming year for 2027. Part of that is driven by the introduction of the rental model. Again, if you look out the next couple of years, that is helping increase the profits. So we have had a really good year on private and affordable in terms of the sites we have had and the margins we have been able to generate. Yeah, we see that continuing over the coming years. We have got some great sites coming through in the north and in the central belt. As I say, the SSEN model further helps increase our margin over the coming years.

Speaker #2: Part of that is driven by the introduction of the rental model. And again, if you look out over the next couple of years, that's helping increase the profits.

Speaker #2: So, we've had a really good year on private and affordable, in terms of the sites we've had and the margins we've been able to generate.

Speaker #2: And yeah, we see that continuing over the coming years. We've got some great sites coming through in the North and in the Central Belt.

Speaker #2: And, as I say, the SSEN model further helps increase our margin over the coming years.

Speaker #1: Great, thanks. And while we're talking about affordability, are contracts being structured slightly differently than they were a few years ago—just in terms of the cost inflation?

[Company Representative] (Equity Development): Great, thanks. While we are talking about affordable, are contracts being structured slightly differently than they were a few years ago?

Operator: Great, thanks. While we are talking about affordable, are contracts being structured slightly differently than they were a few years ago?

Iain Logan: Yeah.

[Company Representative] (Equity Development): Just because of the cost inflation.

Operator: Just because of the cost inflation.

Speaker #2: Yeah, absolutely. If you trail back to 2020, 2021, we’d seen some long-term contracts for two or three years for 120 homes. We’ve dialed away from that over recent years.

Iain Logan: Yeah, absolutely. If you trail back to 2020, 2021, we had signed some long-term contracts for 2 or 3 years for 120 homes. We have dialed away from that over recent years, and we have successfully returned our margins to 14% and 15%. A function of that has been, instead of signing a contract for 120 homes, we will sign one for 40 homes, then another 40 and another 40. What that does is it allows us to get much more certainty over our costs. If we have got a 12 to 18 month delivery program for affordable, we can get a lot of those costs with subcontractors and materials largely fixed. That has been another learning for us and something that we will take forward, and it is something that we continue to apply to contracts today, very much on a shorter term basis, so that we have got much more certainty around our margin.

Speaker #2: And we've successfully returned our margins to 14–15 percent. And a function of that has been, instead of signing a contract for 120 homes, we'll sign one for 40 homes, then another 40, and another 40.

Speaker #2: What that does is it allows us to get much more certainty over our costs. If we've got a 12- to 18-month delivery program for affordable, we can get a lot of those costs with subcontractors and materials largely fixed.

Speaker #2: So that's been another learning for us and something that we'll take forward. It's something that we continue to apply to contracts today, very much on a shorter-term basis, so that we've got much more certainty around our margin.

Speaker #1: Great, thank you. We've got a question here. I suspect I know the answer to it already, but I will put it to you.

[Company Representative] (Equity Development): Great. Thank you. We have got a question here. I suspect I know the answer to it already, but I will put it to you. Last year's strategic focus moved from central to north of Scotland. I was surprised to see you are considering buying land in central Scotland again. Is this due to the opportunity in the north being slower than expected?

Operator: Great. Thank you. We have got a question here. I suspect I know the answer to it already, but I will put it to you. Last year's strategic focus moved from central to north of Scotland. I was surprised to see you are considering buying land in central Scotland again. Is this due to the opportunity in the north being slower than expected?

Speaker #1: Last year’s strategic focus moved from central to north of Scotland. I was surprised to see you considering buying land in central Scotland again. Is this due to opportunities in the north being slower than expected?

Speaker #2: No, no. The opportunity in the north is still the opportunity in the north, but what we have in Central is there are a number of sites that we still own.

Iain Logan: No. The opportunity in the north is still the opportunity in the north. What we have in central is there is a number of sites that we still own, and we are going to be working those out as opposed to selling them, and that will keep us going for certainly 3 to 4 or 5 years maybe. What we are saying is that if opportunities come up in central, we can look at those and consider those, because we are in a position, we have got cash in the bank now, that we have got a workforce there, we have got an overhead that is making a good return. Maybe it is a GBP 50 million business that absolutely not the former, nothing to do with the north. It is just there is an opportunity in central, and we can take advantage of it.

Innes Smith: No. The opportunity in the north is still the opportunity in the north. What we have in central is there is a number of sites that we still own, and we are going to be working those out as opposed to selling them, and that will keep us going for certainly 3 to 4 or 5 years maybe. What we are saying is that if opportunities come up in central, we can look at those and consider those, because we are in a position, we have got cash in the bank now, that we have got a workforce there, we have got an overhead that is making a good return. Maybe it is a GBP 50 million business that absolutely not the former, nothing to do with the north. It is just there is an opportunity in central, and we can take advantage of it.

Speaker #2: And we're going to be working those out as opposed to selling them, and that will keep us going for certainly three, four, or five years, maybe.

Speaker #2: And what we're saying is that if opportunities come up in Central, we can look at those and consider those, because we're in a position—we've got cash in the bank now, and we've got a workforce there.

Speaker #2: We've got an overhead that's making a good return. Maybe it's a £50 million business that is absolutely not the form or nothing to do with the North.

Speaker #2: It's just that there's an opportunity in Central, and we can take advantage of it.

Speaker #1: Great, thank you. And on the long-term sustainability of the building lease model, how do you assess the risk that, once the major infrastructure and energy projects in the north of Scotland are completed, a significant proportion of the workers driving housing demand could leave the region?

[Company Representative] (Equity Development): Okay. Thank you. On the long-term sustainability of the build-to-lease model, how do you assess the risk that once the major infrastructure and energy projects in the north of Scotland are completed, a significant proportion of the workers driving housing demand could leave the region?

Operator: Okay. Thank you. On the long-term sustainability of the build-to-lease model, how do you assess the risk that once the major infrastructure and energy projects in the north of Scotland are completed, a significant proportion of the workers driving housing demand could leave the region?

Speaker #2: Yeah. So my experience is—and I'm from Mali, where we have two RAF bases, and my dad was in the RAF there—is that when people come up to the north of Scotland, they tend to settle and they'll buy a three- or four-bed house, and then the relocation down south, you're paying 50% more, 75% more for the same house.

Innes Smith: Yeah. My experience is, I'm from Mallaig where we had two Royal Air Force bases, and my dad was in the Royal Air Force there. Is that when people come up to the north of Scotland, they tend to settle, and they'll buy a three, four-bed house. Then the relocation down south, you're paying 50% more, 75% more for the same house. So people tend to stay there. How long are we going to be upgrading the infrastructure? Well, there's a five, 10, 15, 20-year program. There's a decommissioning that's still got to happen, which Freeport could also be involved in. So I think, you're looking at economic growth of, certainly the infrastructure is a 10-year program. The original ASTI project we're looking at is a five-year program, but we're aware there's going to be an ASTI 2, there's going to be an ASTI 3. ASTI, that is.

Speaker #2: So people tend to stay there now. How long are we going to be upgrading the infrastructure? Well, there's a 5-, 10-, 15-, 20-year program.

Speaker #2: There's a decommissioning that's still got to happen, which three ports could also be involved in. So I think you're looking at economic growth of, certainly, the infrastructure is a 10-year program.

Speaker #2: The original ASCII project we're looking at is a five-year program, but we're aware that there's going to be an ASCII fee, and there's going to be an ASCII fee.

Speaker #2: ASTI, that is. So I tend not to look too much further than 10 years out. Nothing to do with being 56, but if I can give 10 years of very good growth, then that's pretty much a good thing for me.

Innes Smith: I tend not to look too much further than 10 years out. Nothing to do with being 56, but if I can give 10 years of very good growth, then that's pretty much a good thing for me.

[Company Representative] (Equity Development): Okay. How will the rental revenue stream vary with the wider lettings market rates during the fixed rental period that you have?

Operator: Okay. How will the rental revenue stream vary with the wider lettings market rates during the fixed rental period that you have?

Speaker #1: Okay. And how will the rental revenue stream vary with the wider lettings market rates during the fixed rental period that you have?

Speaker #2: Yeah, I think it's slightly different from our normal sort of rental model because of the fact that we're giving the homes to the councils at the end.

Innes Smith: Yeah, I think it is slightly different, our model, to a normal sort of rental model because of the fact that we are giving the homes to the councils at the end. So that means there is an incentive at the start. The rental is going to be higher to compensate for that discount. So our model is slightly different compared to a normal model. But it should not be considered rent. It is more like serviced apartments. It is more like when the energy providers are comparing our costs to other things or comparing it to hotels or comparing it to workers camp. A workers camp is stuff like GBP 200 a man a night. A hotel, I have said the figures that it could be. So what you are doing is comparing, they are getting value for money compared to that.

Iain Logan: Yeah, I think it is slightly different, our model, to a normal sort of rental model because of the fact that we are giving the homes to the councils at the end. So that means there is an incentive at the start. The rental is going to be higher to compensate for that discount. So our model is slightly different compared to a normal model.

Speaker #2: So that means there's unassigned land at the start. The rental is going to be higher to compensate for that discount, so our model is slightly different compared to our normal model.

Speaker #2: But it shouldn't be considered rent. It's more like serviced apartments. And it's more like when the energy providers are comparing our costs to other things, or comparing it to hotels, or comparing it to workers' camp.

Innes Smith: But it should not be considered rent. It is more like serviced apartments. It is more like when the energy providers are comparing our costs to other things or comparing it to hotels or comparing it to workers camp. A workers camp is stuff like GBP 200 a man a night. A hotel, I have said the figures that it could be. So what you are doing is comparing, they are getting value for money compared to that.

Speaker #2: Workers' camp and stuff like £200 a man a night. A hotel—I said the figures that it could be. So what you're doing is comparing; they're getting value for money compared to that.

Speaker #2: It's not just a rental of flats, and the rents don't go up and down over four years. It's set at the start, and it's maybe inflation-linked, but we know with a lot of certainty what the rentals are going to be for the four-year period.

Innes Smith: It is not just a rental of flats and the rents do not go up and down over four years. It is set at the start and it is maybe inflation linked, but we know with a lot of certainty what the rentals are going to be for the four-year period and hopefully 18 months on.

Speaker #2: And hopefully, 18 months on.

Speaker #1: Great, thank you. And one final question—you touched on the PRS market becoming, or certainly people are starting to talk to you again. What's changed, and what do you see as the biggest opportunities for Springfield?

[Company Representative] (Equity Development): Great. Thank you. One final question. You touched on the PRS market becoming, or certainly people are starting to talk to you again. What has changed? What do you see as the biggest opportunities for Springfield?

Operator: Great. Thank you. One final question. You touched on the PRS market becoming, or certainly people are starting to talk to you again. What has changed? What do you see as the biggest opportunities for Springfield?

Speaker #2: Well, the government took away the rent cap. The rent cap on rents was spectacularly unsuccessful because people just stopped investing in properties. If you can't get an increase in your return, nobody's going to build properties for rental.

Innes Smith: Well, the government took away the rent cap. The rent cap, rent freeze was spectacularly unsuccessful because people just stopped investing in properties. If you cannot get an increase in your return, nobody is going to build properties for rental. So that is exactly what happened. The government has now put through a new bill, and the rent cap has been removed. They could declare, I think it is a rent cap area, and it is capped to 6% or CPI plus 1%. But there are various vetoes or I forget the right word, but if you are a PRS provider of significance, then there are certain rules that do not apply to you. So they made it very much easier for them to invest.

Speaker #2: So that's exactly what happened, and the government has now put through a new bill and the rent cap's been removed. They could declare, I guess, a rent cap area, and it's capped to 6% or CPI plus 1%.

Speaker #2: But there's various vetoes, or—I forget the right word—but if you're a PRS provider of significance, then there are certain rules that don't apply to you.

Speaker #2: So they've made it much easier for them to invest. So they are looking at investing again. And the fact that one of them is looking at the north and can see the opportunities with all of the work coming is a good thing.

Innes Smith: They are looking at investing again, and the fact that one of them is looking at the North and can see the opportunities with all of the work coming is a good thing. Again, because we have got the land and we have got some big long-term sites, then we can actually do some for them, and we are not really affecting either of our markets. That could be a very good thing.

Speaker #2: So again, because we've got the land and we've got some big, long-term sites, we can actually do some for them, and we're not really affecting either of our markets.

Speaker #2: So, that could be a very good thing.

Speaker #1: All right. Well, thank you very much for your time. Very comprehensive run-through and some good questions there. So very much appreciated. And we look forward to catching up with you at your interims in February next year.

[Company Representative] (Equity Development): Well, thank you very much for your time. A very comprehensive run-through and some good questions there. Very much appreciated, and we look forward to catching up with you at your interims in February next year. I am sure you will have plenty to tell us then as well. To our viewers, can I just remind you there will be a survey at the end. If you can just wait for that to pop up onto your screen and answer those questions, it would be very much appreciated.

Operator: Well, thank you very much for your time. A very comprehensive run-through and some good questions there. Very much appreciated, and we look forward to catching up with you at your interims in February next year. I am sure you will have plenty to tell us then as well. To our viewers, can I just remind you there will be a survey at the end. If you can just wait for that to pop up onto your screen and answer those questions, it would be very much appreciated.

Speaker #1: I'm sure you'll have plenty to tell us then as well. And to our viewers, can I just remind you there will be a survey at the end.

Speaker #1: So, if you can just wait for that to pop up onto your screen and answer those questions, it would be very much appreciated.

Speaker #2: Yeah. And I'd just like to thank everyone that has watched this and does invest in us. We really do appreciate it. And hopefully, this has given you a good picture of what we're about to thank you.

Innes Smith: Yeah. I would just like to thank everyone that has watched this and does invest in us. We really do appreciate and hopefully this has given you a good picture of what we are about. Thank you. Thanks very much.

Speaker #2: Thanks very much.

Iain Logan: Thanks very much.

Operator: Goodbye

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