Mactaggart & Mickel Homes

Acquisition of Mactaggart & Mickel’s housebuilding business

Springfield acquires premium Scottish housebuilding business and timber frame factory… Springfield Properties (AIM: SPR), a leading housebuilder in Scotland delivering private, affordable and PRS housing, is pleased to announce that it has entered an agreement to acquire the Scottish housebuilding business of Mactaggart & Mickel Group Ltd (“Mactaggart & Mickel”),

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BDC 321 : Oct 2024

Mactaggart & Mickel Homes

Acquisition of Mactaggart & Mickel’s housebuilding business

Springfield acquires premium Scottish housebuilding business and timber frame factory… Springfield Properties (AIM: SPR), a leading housebuilder in Scotland delivering private, affordable and PRS housing, is pleased to announce that it has entered an agreement to acquire the Scottish housebuilding business of Mactaggart & Mickel Group Ltd (“Mactaggart & Mickel”), which has been delivering high-quality housing across the Central Belt of Scotland for almost 100 years. The total consideration is £46.3m, comprising £10.5m cash paid on completion and a deferred cash consideration of £35.8m to be paid proportionally as homes are sold over the next five years (the “Acquisition”). The Acquisition will be funded from Springfield’s internal resources and existing debt facilities with Bank of Scotland. Under the terms of the Acquisition, the Group has acquired six live private and affordable sites with work in progress with a fair value of approximately £15m and fixed assets. The Group has also acquired a brand licence to build homes as Mactaggart & Mickel on a further 11 private and affordable sites, which will transfer to Springfield as homes are sold in line with the payments of the deferred consideration. The total 17 sites, of which 16 have planning permission and equating to the delivery of c. 700 homes, have a gross development value of c. £230m. The Group expects to generate gross margins on these sites materially in line with margins delivered by the rest of the Group. Springfield intends to retain all of Mactaggart & Mickel’s housebuilding business employees. The Acquisition also includes Timber Systems, a timber frame factory near Glasgow. The Group already constructs 90% of its homes from timber kits and the addition of a second timber frame factory will secure kit supply and increase capacity for future growth while further reducing its carbon footprint. Springfield will retain all of Timber Systems’ employees. In addition, Springfield and Mactaggart & Mickel have established a strategic alliance with an agreement that gives Springfield opportunities for future acquisitions of sites from Mactaggart & Mickel’s remaining land bank of approximately 2,300 acres across Scotland. The housebuilding business of Mactaggart & Mickel is a premium brand housebuilder primarily targeting the larger private home market. The land bank is in highly desirable locations within the Central Belt of Scotland, expanding the Group’s footprint in areas with a higher price point.  The payment of the deferred cash consideration is subject to an annual minimum payment of £7.7m from the second year following completion. Each annual minimum payment will be reduced by any excess deferred consideration paid by the Group over the annual minimum payment in the prior year. The Group has the option to defer any year’s minimum payment by 12 months. The consideration for the Acquisition will initially be satisfied from the Group’s existing cash and debt facilities and the deferred consideration will be paid proportionally as homes are completed. It will also partly utilise the Group’s existing uncommitted land purchase budget for the next five years. The Acquisition is expected to be earnings enhancing in the current year to 31 May 2023. For the year to 31 May 2022, the Group expects to report results in line with market expectations, with good revenue growth and a better-than-expected reduction in net debt to c. £39.0m at year end (30 November 2021: £43.0m). Further details will be provided in the Group’s full year results announcement, which is expected to be published in September 2022. Innes Smith, Chief Executive Officer of Springfield Properties, commented: “We are very pleased to welcome Mactaggart & Mickel’s Scottish housebuilding business into the Springfield Group. As well as bringing another premium brand into the Group, this acquisition gives us land, with planning permission, in areas of significant demand. The structure of the acquisition – with the majority of the payment to be made as homes are completed – de-risks the deal and creates an effective and efficient means of acquiring land. “The addition of a timber frame facility in the Central Belt, alongside our existing facility in Elgin, secures our supply of timber kits and provides further capacity to support our next stage of growth. It will also reduce our carbon footprint by enabling local manufacture of all kits. “We welcome our new colleagues to the Group and look forward to working together to continue delivering high-quality homes across Scotland.” Paul McAninch, Group Finance Director of Mactaggart & Mickel, added: “We welcome this agreement with Springfield, which we believe provides a strong platform for growth for both parties. “Our company has had a proud tradition as a leading housebuilder in Scotland, which is built on the work of its dedicated teams. “This tradition will continue, and I’m pleased that there will be continuity of employment as a result of this agreement. I’d like to thank all our staff for their dedication over the years as we look to our second century as a successful business. I’d also like to wish transferring colleagues every success for their future.”

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Mactaggart & Mickel Homes England Submit Planning Permission for Oxfordshire Sites

Mactaggart & Mickel Homes England have submitted the reserved matters planning permission for a site at Milton under Wychwood in Witney, Oxfordshire. Mactaggart & Mickel are a fourth-generation family housebuilder who have been established since 1925. The award winning housebuilder is a five-star HBF rated development company that has their headquarters in Glasgow. The company has recently announced that they will be expanding into the English with the submission of detailed planning permission expected for a site located at East Challow, which is near to Oxford. The proposed development in East Challow will be the second planned house building project in England. However, the Mactaggart & Mickel Homes has a strong land bank in England and has been involved in a range of strategic land development south of the Scottish border since 2008. The company have managed to secure more than 1200 acres across the north west and south of England and has an additional 250 acres under offer. The proposed housing development in East Challow has an outline planning consent to create 38 new homes. The house building company are awaiting a decision on a more detailed planning application which is expected to be made in the late autumn. The proposed development includes a mix of 25, two to five bedroom private homes and 13 affordable homes with one to three bedrooms. Mactaggart & Mickel Homes have been working to deliver quality houses for almost a century and the company feel that the development of beautiful homes that they have submitted will fit into the village of East Challow perfectly. Through the development, the housebuilders are looking forward to the opportunity to work with national and local suppliers in order to deliver the new houses, and creating a range of employment opportunities as well as an economic boost to the local community and the surrounding area.

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