St Modwen performs strongly in first half
DEVELOPER St Modwen has released a positive trading update for the six month period to May 31.
The Birmingham firm – which is regenerating the Longbridge area of the city – says it has a growing pipeline of development opportunities and predicts profits and cash flows will be in line with its expectations.
St Modwen said initial indications point to an uplift in market valuations for the first half of the year compared with November 2013, reflecting the on-going improvement in the residential and commercial property markets across the UK.
Profits before tax in the first half of the year are anticipated to be significantly ahead of the first half results for 2013.
The firm says momentum continues to build across all of our major projects.
Last month it submitted the planning application for the redevelopment of the 57 acre New Covent Garden Market site in Nine Elms, London. Subject to the receipt of planning consent, development of the new market will start next year.
The firm said that across its income producing portfolio it is seeing a continued increase in enquiries and occupancy levels remain high, providing further evidence of the returning confidence to the regional commercial property sector.
The St Modwen Homes and the Persimmon joint venture sites continue to experience strong sales rates and the firm says it is seeing increasing demand for its residential land from housebuilders looking to increase their sales outlets across the UK.
In February St Modwen launched an offering of £100m of unsecured guaranteed convertible bonds. The proceeds of the bond have been used to repay existing debt and to aid its growth plans.
St Modwen revealed it is in the process of renewing its bank debt facilities and will continue, as part of its long-term strategy, to increase the diversity and longevity of its funding portfolio.
Bill Oliver, chief executive of St Modwen, said: “As predicted at the full year, we are now witnessing a sustained improvement in the residential and commercial marketplace.
“Alongside our active programme of adding value through intensive asset management, we continue to secure opportunities across our portfolio to unlock value from our land bank through land sales and by development, thereby taking full advantage of current market conditions.
“This activity, supported by the on-going optimism in the commercial and the residential marketplace, points to a positive outlook for St Modwen, both in terms of profit and future net asset value growth.”
