St Modwen to take "more cautious approach" after Brexit vote

PROPERTY group St Modwen is to take a “more cautious approach” to its development strategy in the wake of the EU referendum, despite reporting a “strong” first half.

Revenues for the six months to May were up 15% to £159.7m, which resulted in pre-tax profits of £39.9m.

While St Modwen’s chief executive Bill Oliver believes the results “demonstrate our ongoing ability to deliver strong underlying profits”, he sounded a cautionary note following the referendum result.

“We are now operating in a period of uncertainty in relation to many factors that impact the property market,” he said.

“Whilst it is too early to accurately predict how the UK property market will respond, until we have more clarity we believe it is appropriate to take a more cautious approach to the delivery of our development strategy.”

St Modwen’s share price dropped by one-fifth in trading in the hours after the Brexit decision and slipped further before stabilising. It closed last night at 259p,  23% down on its pre-referendum price.

The group’s £1.7bn property portfolio is split between income producing properties, which account for 47% of its portfolio value, residential land and development, which is 44%, and the remaining 9% comes from its commercial land and development.

Mr Oliver added: “We have had a strong first half of the year, with underlying trading profits in line with the comparative period’s record levels as a result of continued activity across our core commercial and residential businesses.

“We delivered growth through the improvement in the regional property markets and our ability to perform development, investment and asset management actions.”

The group’s highlights include acquisitions across the North West, including Warth Industrial Estate in Bury and 400,000 sq ft of retail and leisure space in Kirkby town centre.