"Improving conditions" move Muse back into profit

MUSE Developments reversed a £1.5m loss experienced in 2009 into a pre-tax profit of £600,000 in 2010 due to what it described as a “modest improvement in market conditions”.

Newly-filed accounts for the Salford Quays-based developer, which is part of quoted construction giant Morgan Sindall, show that it increased turnover to £48m during the year (2009: £32m) which was based on stronger sales of residential units at some of its schemes as well as increases in development fees from projects that it manages.

It also completed a number of forward-sold schemes and generated some income through land trading.

Muse currently has a development pipeline of around 30 projects, of which its share has a value of £1.4bn. Many of these include joint ventures with other investors and with public sector landowners, including the £220m Talbot Gateway scheme at Blackpool and the £225m regeneration of Network Rail’s Victoria station in Manchester.

The value of its portfolio remained unchanged at £1.4bn during the year. A directors’ report accompanying the accounts said that Muse concentrated on developing out existing schemes as there had been “relatively few quality new development opportunities” .

However, in its outlook for 2011 the firm said that the resources afforded to it by being part of the Morgan Sindall Group mean that it is “well poised to take advantage of opportunities as and when they arise”.

For instance, it has already bought out its joint development partner in the 23-hectare Northshore regeneration scheme at Stockton-on-Tees. A note detailing post-year end events states that it paid Urban Splash £405,000 for its half-share of the scheme.

Muse listed its highlights for 2010 as starting on site with two major regeneration projects – the £300m town centre regeneration scheme at Doncaster in South Yorkshire and the first phase of a major regeneration scheme at Rathbone market in Cannning Town, where it began work on a 21-storey tower containing 271 residential units. During the year, net assets increased by just under £500,000 to £49m.