Property group on course to meet full year expectations

Property group St. Modwen has said it is making good progress as part of its four strategic pillars and is on course to deliver full year results in line with expectations.

The Longbridge-based company announced in June that its future growth would be based around four strategic objectives:

• accelerating commercial development activity;
• growing its residential and housebuilding business;
• cementing and growing its regeneration reputation; and
• portfolio focus and capital discipline.

In a trading update for the period to November 30, 2017, Mark Allan, chief executive of St. Modwen Properties, said: “We have continued to advance our new strategic objectives since announcing them in June and have made solid progress in terms of accelerating delivery and focusing activity towards the higher performing industrial and logistics sector and our St. Modwen Homes business, both of which are experiencing excellent growth.

“At the same time, St. Modwen’s diverse portfolio and broader business has continued to perform well, demonstrating resilience and growth, and signalling that the full year results will be in line with expectations.”

The group will continue to recycle and rationalise its portfolio, evaluating which of its assets to prepare for sale in the first half of 2018. At the same time, it will identify which projects it wants to retain within its commercial development pipeline.

At the half year, the group said it had identified a smaller asset portfolio of approximately £100m, representing £4m of associated net rental income, which it intended to dispose of during the next few years.

“Our newly established asset management team has made good progress on the disposal of these assets with over £20m of this portfolio now sold, representing approximately £0.5m rental income,” it said.

“We are now evaluating the remainder of the portfolio to establish the optimum approach to disposing of the remaining properties.

“In addition, we are actively progressing discussions on the refinancing of our existing £488m of secured bank bilaterals, replacing them with a similar quantum of unsecured bank finance to give us greater operational flexibility.”

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