Muse contributes to Morgan Sindall’s half year results

The proposed New Bailey scheme

Urban regenerator and property development company, Muse Developments, which has offices in London, Manchester and Leeds, has contributed to half year results released today by parent company Morgan Sindall.

The group delivered results for the half year to June 30, 2020, which were, unsurprisingly impacted by the COVID-19 pandemic.

Revenues fell by four per cent to £1.363bn, while pre-tax profits declined by 62% to £13.6m.

However, the group’s balance sheet remains strong, with average daily net cash in the period increasing to £153m and period end net cash of £146m.

With its secured workload up five per cent to £8.0bn, the group is confident of future success and growth.

Muse, focusing on mixed-use development and urban regeneration, continued to deliver innovative new places through collaborative partnerships during the first half of the year safely and in line with current government guidelines.

The company currently has 17 projects on site, with a gross development value of £392m, and is expecting to begin construction on a further 11 projects in the second half of 2020.

Planning consent was achieved on four projects with a total development value of £70m.

The company’s order book and forward development pipeline now stands at £2.3bn.

In addition, preferred developer status was secured on three major new projects in Bradford, St Helens and Salford. The latter two projects are through its joint venture with Legal & General and Homes England – The English Cities Fund.

Activity in Muse’s logistics portfolio remains strong, with construction of a 195,000 sq ft unit continuing at Harrier Park Hucknall for educational resource provider, RM Resources, as well as the completion of 361,000 sq ft distribution hub for Amazon and further plots underway at its flagship Logic Leeds scheme.

Muse’s commercial and leisure schemes continue apace, with a number at various stages of construction in Salford, Cheadle, Stockport, Blackpool and Basingstoke, as well as a number of deals completed, including 31,000 sq ft former market building at Time Square, Warrington let to Gravity Active Entertainment for its 13th site.

It also continues to create a range of new homes within its portfolio, across a variety of tenures including private sale, build to rent and affordable in Bristol, Salford, Plymouth, Hucknall, Stockton-on-Tees and Tottenham Hale.

Matt Crompton, managing director at Muse, said: “While the half year results have been impacted by the effects of coronavirus, we remain in a strong position as we continue to collaborate with our partners to create inspiring new places and spaces, bringing together the best of the public and private sector to drive economic and social prosperity at a time when it’s needed most.

“One of our key focus areas going forward is using our experience of creating vibrant new places to work closely with local authorities to help them repurpose their towns and cities by looking at adaptable, complementary and sustainable places that also maximise social value for local communities.

“In addition to some important new business wins, some of the year’s highlights include significant occupier deals at Time Square, Warrington, Logic Leeds, Hucknall and Basing View, plus residential sales in Stockton-on-Tees, Tottenham Hale, Salford, Plymouth and Bristol.”

Some of Muse’s key developments in the North West include:

  • The new market hall at Time Square, in the heart of Warrington town centre has now opened to the public safely and in line with government guidelines. The flagship scheme, which has been delivered in partnership with Warrington Borough Council, has repurposed a key part of the town centre into a vibrant leisure destination and civic hub is now complete with the new permanent home for the award-winning market now open safely to serve the community, with Cineworld opening its state-of-the-art 13-screen multiplex experience, as well as The Botanist launching a flagship bar and restaurant.
  • The English Cities Fund – Muse’s strategic joint venture with Legal & General and Homes England, was selected as Salford City Council and the University of Salford’s preferred development partner to deliver the Salford Crescent and University District masterplan, a £2.5bn, 240-acre major regeneration scheme that aims to create an inviting, attractive place, which generates wealth, jobs and knowledge, enhancing the wider Salford economy.
  • Multiple phases of development at Salford Central are currently on site, including Two New Bailey Square (188,500 sq ft office), Three New Bailey (157,000 sq ft office building for HMRC), along with a range of residential schemes, including the third phase of the highly successful Build to Rent scheme, The Slate Yard (199 one-, two- and three-bedroom apartments), Atelier (178 apartments and townhouses), Valette Square (33 two-, three- and four-bedroom townhouses) and plot C1 (211 apartments).
  • Stockport Exchange – construction is now complete on 2 Stockport Exchange, a new 61,500 sq ft office building. The wider £145m regeneration scheme – which forms part of Stockport’s Mayoral Development Corporation – is being delivered in partnership with Stockport Council and has already delivered a 1,000-space multi-storey car park, 50,000 sq ft office and extensive public realm and highway improvements. Global chemical company, BASF, is the latest occupier to announce they are taking space at the scheme, after signing a lease for 21,500 sq ft for their UK headquarters.
  • Islington Wharf – Manchester City Council has approved plans for the fourth and final phase at Islington Wharf in the heart of Ancoats. The scheme is being delivered by Muse’s joint venture with the Canal & River Trust, Waterside Places, and brings forward 106 one- and two-bedroom apartments over two buildings at 11- and 16-storeys, respectively, on the corner of Great Ancoats Street and Old Mill Street. This final phase will also feature 1,750 sq ft of active ground floor uses along with landscaping, sustainability initiatives, 19 car parking (including disabled) and 106 secure cycle spaces.
  • Talbot Gateway – Demolition is now under way on the former Wiko’s site in Blackpool town centre to make way for the second phase of development, which will bring forward the completion of the new tramway interchange at Blackpool North Station, a new underpass, a four-star Holiday Inn hotel and restaurant, and new retail outlets.

Parent group Morgan Sindall has declined to recommend an interim dividend this year. Last year it paid out 21p per share to shareholders.