Developer St Modwen sees its profits surge
BIRMINGHAM developer St Modwen has seen its profits before tax increase by 68% over a 12 month period.
Announcing its annual results for the year ended November 30, the firm – which is behind the regeneration of Birmingham’s Longbridge area – revealed profit before all tax of £138.1m (2013: £82.2m).
Property profits were up 45% to £57.7m (2013: £39.8m).
Financial highlights of the period in question include its debt portfolio fully refinanced, with earliest maturity now 2018, and the successful launch of a £100m convertible bond.
St Modwen is working on a number of major regeneration projects in addition to Longbridge.
In London a resolution to grant planning for its New Covent Garden Market scheme was received in November while at its Bay Campus scheme at Swansea University it has signed a development agreement with the university for an additional 545 student apartments and new student facilities.
It forward sold 50% of the apartments to M&G Investments for the M&G Secured Property Income Fund for £20m.
St Modwen has also benefited from a resurgent residential market. Housebuilding activities delivered a 167% increase in residential profits to £24m (2013: £9m).
Bill Oliver, chief executive of S. Modwen, said: “This has been an exceptional year for St Modwen and we have achieved significant progress across all of our major projects as well as increasing our active pipeline of commercial development opportunities to over 3m sq ft of space.
“The residential part of the business continues to perform well with good sales rates achieved throughout the year and we anticipate a sustained performance into 2015.
“Across the UK, we continued to grow the business, capitalising on the upturn in the regional property market and we look forward to continuing this level of success throughout the coming year.”
Stephen Prosser, Midlands regional director for St Modwen, added: “Reflecting the growth in the regional commercial property market and the upturn in the economy, our Midlands pipeline for commercial development projects is growing fast and now represents around 1.5m sq ft of space, exemplifying the strength of the Midlands’ marketplace.
“Our redevelopment of Longbridge is one of the largest regeneration projects outside of London. Here, we are making excellent progress in transforming this 468-acre former industrial site into a thriving mixed-use community.
“To date, we’ve invested over £300m into this important scheme, created over 3,700 jobs and welcomed over 50 new businesses to this area of Birmingham. Current development work includes the delivery of phase 2 of the Town Centre which is anchored by a 150,000 sq ft Marks & Spencer store – one of the largest in the UK.
“Elsewhere in the Midlands, construction of our Technology Retail Park in Rugby, due to complete in August 2015, is already 100% let to retailers including Homebase and Pets at Home.
“It forms part of a broader regeneration scheme we are delivering in Rugby and has much in common with Longbridge as it exemplifies our foresight and presence of mind during the recession when we chose to prepare land for development through remediation and securing planning applications and as a result, placing us in prime position to deliver to the market when the recovery sets in.
“Answering the increasing demand for employment space, we will begin delivering five new business and industrial parks in Tamworth, Derbyshire and Staffordshire in 2015, generating thousands of new jobs for the region.
“Construction of six units at Great Western Business Park in Worcester will complete this spring, and more development is in the pipeline, confirming our confidence in this marketplace.”
