‘Subdued’ market sees Muse fall into loss

PROPERTY company Muse Developments, which fell into loss and saw more than turnover halve in 2009, has said it expects conditions to remain subdued in 2010.

The Salford-based company, which is a subsidiary of listed construction group Morgan Sindall, said that tough trading conditions had led to a reduction in activity and that it expected 2010 to offer a similar trading landscape.

It recorded a pre-tax loss of £1.5m (2008: pre-tax profit of £3.9m) on a turnover of £32m (2008: £84m) for the year to the end of December 2009.

Net assets increased to £2.6m, from a net liability of £3.9m in 2008, although cash at the bank decreased by £3m to £5m.

The company’s future development pipeline increased to £1.4bn from £1.3bn previously.

It signed two new development agreements during the year:  the £300m regeneration of Doncaster town centre, including a performance venue, council offices and public square; and work on a £220m office and retail scheme with Blackpool Council.

On the residential side, Muse completed three phases of mixed use projects in Reading, Plymouth and Leeds which put 460 properties into the market – 60% of which were sold by the year end.

Since the year end, Muse invested £228,000 the 50% share of residential developer Ician Developments Ltd it did not already own, buying it from Crosby Homes in March 2010.

In the same month, it also paid £1.7m for the remainder of Eurocentral Holdings Ltd, a joint venture it had formed with Royal Bank Project Investments Ltd.

The director’s report said: “Although conditions are expected to remain subdued for the next 12 months, with its high quality development portfolio the group is well-placed for growth as occupier demand returns in the medium-term.

“Muse’s business model provides a degree of insulation from adverse cost and value corrections, as it does not hold substantial land assets.”