St Modwen returns to profit and reduces debt

REGENERATION specialists St Modwen has announced a return to profit and net asset value growth in its half-yearly results.

The Quinton-based company has also resumed pay outs of dividends for the six-month period ending May 31.

Its results revealed a profit before tax of £26.7m in the period compared with a loss of £98.3m in 2009.

Net assets increased by 6.8% to 214p per share since November 30, 2009, with an interim dividend payment of 1p per share.

It also signed an agreement to acquire a portfolio of 11 industrial estates for £21.4m, with annual rental income of £2.2m, and acquired a vehicle component factory in Hednesford.

This completes the site assembly for its £50m town centre redevelopment, for which planning permission is expected to be granted this summer.

Chairman Anthony Glossop said: “As anticipated in our March trading update, I am delighted to be able to report a significant improvement in our trading performance for the half year, which has produced an NAV increase of 6.8% in the period and enabled us to resume the payment of dividends.”

Other key elements of the results show a reduction in net debt of £17.3m, with loan to value ratio improved to 31% from 34% in 2009.

In the period, the group reported a trading profit of £8.3m compared with £6.8m in 2009.

This result has been underpinned by an increase in net rental income received of 1.8% compared with H1 2009, and 6.1% compared with H2 2009.

Gross annual rent roll now stands at £44.3m as at May 31 this year which is unchanged on a like-for-like basis compared with November 2009.

Property valuations of the company’s assets rose by £20.1m in the period to May 31 this year whereas in the six months up to May 31, 2009, it had declined £97.6m.

Since the year end, the company says it has committed £36m in acquiring 167 developable acres.

St Modwen’s Midlands regional director John Dodds said: “We are definitely open for business and we’re getting the finances to take new schemes forward.

“We continue to move forward with two schemes in the Midlands. Bournville College at Longbridge will welcome 15,000 students from September 2011 and we’re progressing with the redevelopment works of the 150,000 sq ft Warwickshire College building at Rugby, opening in September.

“We are also continuing to work on all our other programmes and are bringing these forward and have interest in other sites.

“The Long Marston development in Stratford has received planning consent for around 800,00 sq ft of employment space.

“This is very important for the businesses down there – now they can plan with certainty for the future as they were unable to do that.”