Profits halve for property group
Pre-tax profits have halved at Coleshill property group, IM Properties, despite the business enjoying a successful 2016.
The group enjoyed a stellar 2015, with pre-tax profits breaking the £100m barrier for the first time to reach £103.2m.
The year was boosted by the exceptional sale of a £200m industrial portfolio to a Malaysian pension fund. 2015 also saw revenue increase by 30% to £164m.
Such a performance was always going to make comparisons difficult in 2016 and so it has proved.
Despite continuing to outperform the real estate market, group turnover reached £178m during 2016, a rise of £14m. Pre-tax profits declined to £58m.
In any other year such a performance – especially given the economic climate – would be more than acceptable, and while it still is, the results in 2015 overshadow everything else.
In many respects, 2016 was a year of consolidation for the business as it looks to build for the future.
The group said cash reserves of £87m, mainly generated from property sales secured during 2015, had given it the liquidity to invest in projects offering a higher return in the medium to long term, with a focus on its development divisions.
Establishing a strong pipeline for the future, value of property under construction and stock and work in progress increased by £91m to £279m.
Tim Wooldridge, IMP’s managing director said: “We’ve strengthened our in-house project delivery team, so we are able not only to invest in, but deliver highly complex commercial and residential projects. 55 Colmore Row in Birmingham was a prime example of this in 2016, which saw a Grade II listed building completely remodeled bar its facade to deliver 160,000 sq ft of prime, Grade A commercial space in the city centre.
“Our residential division too, Spitfire Bespoke Homes, which focuses on bespoke homes in prime locations enjoyed rapid expansion, with turnover increasing by 101% to £53m. We see this as an important element of the business going forward and we will continue to invest in development of the brand.
“IM Land has a development pipeline of over 12,000 plots providing a balanced portfolio of committed, near, medium and long-term projects which following successful promotion through the planning system will deliver phased development land with a value in excess of £1bn.”
Mr Wooldridge said despite the economic climate, the group had been confident enough to commit to speculatively built offices, industrial and logistics space at its Blythe Valley Park scheme.
Strong demand also saw the group complete a number of high profile pre-lets at BVP during 2016, including new offices for Prologis and a hi-tech aftersales and preparation centre for Rybrook.
“We’re always looking to break new ground and achieve ‘best in class’ in developments. We’re just announced a UK first, creating a 69,000 sq ft, speculatively built Electricity Cost Neutral Building at The Hub in Birmingham, in a bid to lead the industrial and logistics market,” he added.
Another long-term project is in the USA – a $250m mixed-use, lifestyle scheme north of Chicago (The Corners of Brookfield) has been opened with retailers reporting record opening sales.
“We move at a very fast pace and it’s exciting to be involved and have the reserves to seize opportunities. Our focus on the development side in 2017 is a strategic one, but we’re flexible enough as a business to look at other investments if they present themselves. We go where we see we can add value or make a long term impact,” said Mr Wooldridge.
IMP is one of the UK’s largest privately owned property companies and specialises in investment, management and development, with a diverse range of assets across the UK, in Germany and the USA.
