Springfield Properties PLC Further Update on COVID-19 (8812K)
27 Aprile 2020 - 8:00AM
UK Regulatory
TIDMSPR
RNS Number : 8812K
Springfield Properties PLC
27 April 2020
27 April 2020
Springfield Properties plc
("Springfield" or the "Group")
Further Update on COVID-19
Additional GBP18m facility agreed with Bank of Scotland
Further to the Group's announcement on 24 March 2020,
Springfield Properties plc (AIM: SPR), a leading housebuilder in
Scotland offering private and affordable housing, provides the
following update regarding COVID-19.
Since the start of the outbreak, the Health and Safety of
Springfield employees, customers and the communities in which the
Group operates has been of paramount importance. Consequently, in
accordance with Scottish Government guidance, on 24 March 2020
Springfield temporarily closed down all of its sites under
construction and its kit factory, as well as closing its sales and
administrative offices to the public with employees working from
home wherever possible. The COVID-19 situation continues to evolve
and until there is clarity on the duration and severity of these
events, it is not possible to know when operations will
recommence.
Enhanced GBP85m banking facility
In light of the current situation, the Group is pleased to
confirm that it has agreed an additional GBP18m, 12-month, term
loan facility with Bank of Scotland, increasing the total credit
facility to GBP85m. The term loan has been agreed on similar terms
to the existing credit facility.
Financial modelling has demonstrated to the Board that this
additional support gives Springfield sufficient headroom, should it
be necessary, to withstand even the most unlikely event of a
12-month shutdown. The Board modelled several cash flow scenarios
that assumed different lengths of shutdown as well as the adoption
of various mitigating actions. These actions are described below.
Beyond continued liquidity, the fundamental basis of the models was
the punctual payment of Springfield's employees, suppliers and
sub-contractors throughout the period.
The Board is satisfied that the Group is in a strong financial
position and able to operate within its new facilities even under
the most extreme of these highly stressed scenarios: a full year
shutdown.
Further mitigating actions taken
The Group has taken a number of actions in order to preserve its
cash position during this period. Cancellation of the interim
dividend was notified on 24 March 2020. Over 90% of the Group's
workforce has been furloughed under the UK Government's Job
Retention Scheme. In addition, of the core team still working,
Executive and Non-Executive Directors have agreed to a voluntary
50% reduction in base salary until further notice, and at least
until sales recommence, with 30% deferred and 20% forgone. All
senior managers still working have agreed to a 20% voluntary
reduction in base salary over the same period.
Additional measures that significantly reduce the Group's
monthly running costs include the delay or cancellation of future
land purchases, postponement of office rental and financial lease
payments, and curtailment of all non-essential spend. It is too
early to estimate with accuracy the potential impact on the Group's
financial results. However, the Board believes the Group is in a
strong position to withstand the impact of COVID-19 and once a
return to work is permitted (with the necessary Health and Safety
measures in place), Springfield will continue to deliver against
its strong order book.
Contracted revenues from private and affordable housing
currently stand at over GBP110m. This includes GBP44m of largely
constructed private housing, much of which would have handed over
to clients in April and May 2020. These homes are contracted under
the Scottish missive system and are underpinned by the banks'
three-month extension to mortgage offers. The affordable housing
element consists of GBP66m of affordable housing revenue from
construction contracts already underway.
The Group's position is further strengthened by a significant
volume of private house reservations on which the Group continues
to work, with customers, to secure a missive (contract). In
addition, Springfield is in possession of, what the Directors'
believe to be, the largest land bank in Scotland.
Innes Smith, CEO of Springfield, said: "Throughout the COVID-19
pandemic our first priority has always been the Health and Safety
of our workforce and the wider community and I am proud of the
response of our employees to the crisis. Thanks to their support
for our actions, the enhanced facility from the Bank of Scotland
puts us in a strong financial position for the time when it is
safe, once again, to resume business. We are also working to
maintain strength in our supply chain, hence our commitment to
paying all of our contractors and sub-contractors in full and with
minimum delay. While the impact of the disruption is still unknown,
Scotland will continue to need more good quality housing to address
its housing shortage and I believe that Springfield is in a very
strong position to meet this demand once our business can
restart."
Enquiries
Springfield Properties
Sandy Adam, Executive Chairman
Innes Smith, Chief Executive Officer +44 1343 552550
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N+1 Singer
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Shaun Dobson, James Moat (Corporate
Finance)
Rachel Hayes (Corporate Broking) +44 20 7496 3000
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Luther Pendragon
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Harry Chathli, Claire Norbury, Alexis
Gore, Joe Quinlan +44 20 7618 9100
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END
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