St Modwen happy with new group strategy

Mark Allan, chief executive of St Modwen
Mark Allan, chief executive of St Modwen

Developer St Modwen was happy with its six month performance to May 31, despite a fall in pre-tax profits.

Chief executive Mark Allan said this morning: “We have had a good start to 2018.

“Our expectations for the full year remain unchanged and we are firmly focused on executing the new strategy we established a year ago.

“We have sold £635m of assets since then, improving our portfolio mix and allowing us to reduce borrowings, whilst accelerating the delivery of our substantial industrial/logistics and regional housebuilding pipeline.

“Despite ongoing uncertainty in the external environment, structural growth drivers in both sectors remain positive, so we anticipate delivering a meaningful improvement in earnings and return on capital in the medium term.”

Revenues of £211.9m compared with £151.4m the previous year.

Group NAV (net asset value) per share rose 1% to 455.4 pence, and group net borrowings were down £67.8m to £366m.

A 53.5% rise in interim dividend to 3.10 pence per share is recommended, despite pre-tax profits falling from £31.6m to £25.9m.

The group said it has achieved considerable progress in repositioning its portfolio towards sectors with better long-term growth prospects and accelerating the delivery of its substantial development pipeline.

It expects to exceed its full year target to sell £100-150m of retail and small assets, with the sale of 28% of its retail portfolio for £95m during the half year and a further £70m of retail and small assets under offer.

Plans include accelerating commercial activity and growing its residential and housebuilding arm.

Among the projects the group is involved in across the North West are a 63,657 sq ft speculative development at Stonebridge Park on Merseyside, and the redevelopment of Kirkby town centre.

The group is also regenerating the Great Homer Street district of North Liverpool with its ‘Project Jennifer’ scheme, as well as Crosby village, in Sefton.

Vulcan Urban Village in Newton-le-Willows involves the development of 200 family homes, while a scheme in Ellesmere Port is providing 150 homes for private rent ad sale.

Commercial activity includes a project at Southern Gateway, a prominent 368,000 sq ft multi-let industrial estate in Speke, Merseyside.

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