Property group forecasts strong second half driven by rising completions

Manchester-based property development and management company, One Heritage Group, said it foresees a strong second half, after announcing its interim results for December 31, 2022, today (March 28).

Revenues were £5.75m, up from £150,000 the previous year, driven mainly by the contributions from Lincoln House, Bolton, which practically completed and delivered 27 sales completions in the period.

Pre-tax losses widened, from £530,000 in 2021, to £1.57m, while net debt increased from 314.95m a year ago to £17.73m, primarily facilitating the completion of developments prior to legal completions.

Subscription with existing and new investors raised £1.25m, on July 6, 2022.

During the reporting period the business completed its first major development project, Lincoln House, in Bolton. Planning permission was granted for 24 houses at Victoria Road, Eccleshill, West Yorkshire, while a planning application was submitted, and decision pending, for Seaton House, Stockport.

Following a strategic review, the company focus is now on its core discipline of residential property development in the North of England, acting as developer and development manager utilising fixed priced build contracts.

Agreements are in place for the sale of all 27 apartments at Oscar House, Manchester, while 20 of 23 apartments at Bank Street, Sheffield, were sold.

Post-period, practical completion was delivered at County House, Oldham, the first project acting as development manager.

Looking ahead, the business said it is on track to deliver strong revenue for fiscal year 2023, driven by a robust pipeline of property sales expected to start coming through in the second quarter of 2023.

Also, 29 further sales at Lincoln House, Bolton are expected in the 2023 calendar year and 32 remain available for sale following the strategic decision to remarket the units.

Further practical completions are on track to complete before June 30, 2023, the close of the current financial year, comprising: Oscar House, Manchester – 27 units; Bank Street, Sheffield – 23 units; and St Petersgate, Stockport – 18 units.

Chief executive, Jason Upton, said: “The group has made further progress on our strategic objectives during the first half of our financial year.

“We have adapted our strategy to the current environment by implementing better internal processes and controls to improve efficiencies whilst also focusing our efforts as a residential developer and development manager.

“Importantly, our development pipeline is now delivering revenue through sales, following the completion of Lincoln House, Bolton, with 27 units legally completed, a further 29 are sold and the remaining 32 unsold units are marketed for sale.”

He added: “The second half of the financial year is looking strong, with the practical completions of Oscar House, Manchester and Bank Street, Sheffield, imminent.

Lincoln House, in Bolton

“Nearly all units relating to these projects have either been sold or sales have been agreed. St Petersgate, Stockport, is also expected to complete prior to our financial year end, with all units pre-sold.

“The overall outlook for the residential property sector within our core region of the North of England remains positive.

“There is still a shortage of quality, affordable homes and the focus of our strategy is to address this segment where demand is the highest and where our co-living proposition is growing in popularity. With momentum building, I look forward to updating the market on further progress in due course.”

Addressing the future, he said: “Savills’ long term forecast to 2027 for the UK rental market projects a 6.2% increase in the capital value of the UK second-hand market. The North West and Yorkshire are in the top three leading regions for growth, each with forecasted increases of 11.7%.

“Over the five-year period, the rental value for the UK, excluding London, is forecast to grow by 18.3%. There also continues to be demand emanating from a long term lack of supply of new housing throughout the country.

“With inflation continuing to increase, construction prices over the last year, and with land prices remaining stable, there is pressure on the industry, but we are seeing signs of improvement that give us confidence moving into the second half of 2023.”