Post-referendum slowdown hits developer’s performance

A “deliberate slowdown” in activity in the wake of the EU referendum has resulted in a fall in half year profits for developer St Modwen.

Pre-tax profits slipped 11% to £31.6m, but it said it remains confident of the opportunities ahead despite the “uncertain market environment”.

The property group’s revenues were down 5%, to £151.4m, in the six months to May, with the drop coming from its development division where profits were reduced by £9.6m.

In the North West the company completed 93 transactions (lettings and renewals) during the period, amounting to a cumulative rental income of around £1.44m and spanning 144,000 sq ft of space.

Completed development and asset sales totalling £24.9m included Sunset Business Park in Kearsley, Sainsbury’s Great Homer Street and Vulcan Aldi.

The company said it is continuing to make good progress with the Project Jennifer scheme at Great Homer Street, Liverpool with continued momentum including the opening of the 67,000 sq ft Sainsbury’s and petrol station, while in Kirkby it has secured planning permission for a new cinema.

Mark Allan, chief executive of St Modwen, said: “The business continued its resilient performance across the first six months of the year, despite an uncertain market environment, with all parts of the group contributing positively.

“We also concluded our strategy and portfolio review, which has confirmed the significant potential present in our business and pipeline and we are now focused on realising these opportunities in the months and years ahead.”

Earlier this month, Allan completed a six-month review of the business he had undertaken since replacing Bill Oliver as chief executive.

He identified four objectives for the group – to accelerate commercial development activity, to grow its residential and housebuilding business, to develop its reputation for regeneration work, and to focus on the group’s portfolio and capital discipline.