Record year in the pipeline for St Modwen

DEVELOPER and regeneration specialist St. Modwen has said that it is expecting record profits.

In a trading update issued this morning for the financial year ended November 30, the firm said activity across its commercial portfolio is progressing in line with the regional market recovery.

“We have witnessed a steady stream of occupational demand, demonstrated by the performance of our well-let income producing portfolio, and have experienced encouraging results from our speculative commercial development programme,” it said.

St Modwen’s, based in Birmingham, is currently working on a 250,000 sq ft warehouse site in Doncaster which it says will create 150 jobs.

It also said it has been able to take advantage of an increasingly strong investor market by disposing of a number of mature assets and recycling sale proceeds to fund strategic acquisitions across the UK.

“We continue to add significant value to our portfolio through our own activities in land renewal, planning gain and robust asset management. Most notably, the New Covent Garden Market site achieved unconditional status in April, which resulted in a revaluation gain of £128m in the first half of the year. Profit before all tax for the full year is likely to be in line with market expectations,” it said.

Other major projects also reached significant milestones in the year, with the opening of the second phase of Longbridge Town Centre in Birmingham, including the new 150,000 sq ft Marks & Spencer (M&S) store, and delivery of the new £450m Bay Campus at Swansea.

St Modwen’s net debt position as of November 30 was expected to be slightly higher than current market expectations reflecting the timing of recent investment activities, including the acquisition of Kirkby Town Centre for £35.8m.

It said its capital structure remains strong with substantial balance sheet flexibility to grow the business.

The firm said it continues to be successful in securing planning permissions across its portfolio, the most recent example being the resolution to grant 300 homes at its Hendrefoilan site in Swansea.

“Our housebuilding business continues to perform well and overall profits from residential development remain in line with management expectations,” it said.

Chief executive Bill Oliver said: “This year we have experienced many highlights across our portfolio and in particular across our major projects, all of which have achieved significant value-enhancing milestones.

“We have also been able to take advantage of new opportunities coming to market, enabling us to acquire a number of assets to add to our portfolio, the most recent being Kirkby Town Centre.

“The success of all these activities throughout 2015 has culminated in our anticipation of record profits for the business for the financial year, whilst positioning us well for the future.”

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