Urban Splash suffers turnover decline and slide into deficit

Melville Royal William Yard

Manchester-based regeneration company, Urban Splash, increased its cash balance in the year to December 31, 2022, but recorded a loss for the year, it has revealed.

Announcing its annual results it said it made revenues of £40.1m, which compares with £66.5m the previous year.

While the 2021 results revealed a pre-tax profit of £8.5m, representing a 102% increase on the 2020 figures, this year’s results show a total comprehensive result for the year of £2.3m deficit (2021: £4m surplus), with net assets of £34.5m, a decrease of £2.3m.

The reported net asset position of the group continues to be affected by the residual balance due to shareholders which is considered as equity. Urban Splash said an adjusted statement of financial position provides greater clarity over the underlying financial standing of the group, giving a net asset position of £51.5m. Fixed assets reduce marginally from £111.3m to £107.3m.

It said £11m of the 2022 turnover represented increased revenue from the company’s commercial property portfolio, which at year end was 93% let, with notably high occupancy of more than 96% at buildings in the North West.

The results also showed an increase in cash balances of £0.9m to £5.5m, while third party debt reduced by £2.5m to £56.5m. Urban Splash also successfully refinanced £38.3m of debt during the year – previously held across three separate facilities, the debt is now with a single lender following a £40.3m deal with Aviva in July 2022.

Urban Splash CEO, Julian Curnuck, said: “Urban Splash is a leader in its field, with an established reputation as a pioneer, and advocate of modern design. We have a record of innovative and exciting development and regeneration either by ourselves or with great partners as we transform brownfield sites across the country, working with existing companies and nurturing something new.

“These results for the year ending 31st December 2022 reflect a period of consolidation, one which saw a reduction in our development and construction work and an increased focus on our core strengths of regeneration and placemaking.”

Post year-end, Urban Splash has turned its attentions to those regeneration projects, completing 56,169sq ft of new space at Melville at Royal William Yard in Plymouth, letting the building to Everyman Cinema, BLOCK gym and coworking space, and HubBox restaurant.

The company has also acquired Campbell Park Limited, an entity with a development agreement to deliver approximately 800 homes in Milton Keynes. In August, Urban Splash announced a joint venture with Glenbrook MK to deliver the first phase of this scheme, while other new developments are in design stages in Swansea, Windermere, Birmingham, Plymouth and Manchester, as well as plans for the remaining phase of Park Hill in Sheffield.

The new developments are also supported by a deal with Grosvenor, with whom Urban Splash signed a four-year equity loan facility to provide enabling finance for early-stage projects and land acquisition.

Julian concluded: “With a healthy pipeline and new partners in place to help us deliver future schemes, we are looking ahead to the next year with both confidence and caution.”

The valuation of the investment property portfolio saw a net decrease of £1.6m in the period, which reflects the uncertainty seen in the investment property markets in the latter half of 2022. Despite the decrease in valuation, loan to value covenants continue to be met with clear headroom.

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