Bruntwood saw its pre-tax profits fall by more than 55% in 2019, following a profit spike the previous year when it formed a joint venture with Legal & General.
The Manchester-based developer reported pre-tax profits of £52m, compared to £116m in 2018.
It launched Bruntwood SciTech in October 2018, a 50:50 joint venture with property fund L&G intended to help grow the UK’s science and technology sector through the development of a portfolio of science and research parks. Bruntwood has said the aim is to expand the portfolio to more than 6m sq ft with a valuation of above £2.5bn in the years ahead.
A spokesman for Bruntwood said: “The 2018 financial results were boosted by the immediate cash injection that L&G brought through the joint venture, and help explain the subsequent drop-off in pre-tax profit in 2019.
“There was a much larger property value gain in 2018 as we had a much higher percentage of our portfolio in development which generates a much higher level of return. As a result of the SciTech transaction, we’ve decreased that percentage by almost two thirds in 2019, and hence the drop in value gain is in line with this drop in development.”
Bruntwood SciTech achieved pre-tax profits of £10.1m in 2019, with net assets standing at £240.6m, attributed to progress made in the development of various projects including Circle Square, Citylabs 2.0 and Alderley Park over the past 12 months. Plans to expand the joint venture’s activity across the country are underway, after it was appointed a 25% shareholder in Sciontec Liverpool last year, and also submitted planning permission to develop the next phase of the Innovation Birmingham campus, the 120,000 sq ft Enterprise Wharf, this week.
Meanwhile, turnover for Bruntwood rose 16.6% to £160m, from £137m, and the total value of the company’s assets grew to £1.4bn from £1.3bn in 2018. The company forecasts a “slight increase in 2019 profit after tax” in 2020, the spokesman added.
Bruntwood chief executive Chris Oglesby said: “In a year where the UK saw a sharp fall in inward investment as a result of the uncertainty over Brexit, we invested a record amount in creating places for businesses to thrive, reflecting our belief in the underlying strength and potential of great cities like Birmingham Liverpool, Leeds and Manchester.
“While we invest for the long term, and never judge our performance in the context of a single year’s figures, these are strong results following a record year where our profits were buoyed by a number of one-off exceptional items.”
In 2019, Bruntwood progressed development of its Circle Square mixed-use scheme in Manchester’s Oxford Road innovation district, and unveiled plans for No 3 Circle Square, a 15-storey 220,000 sq ft office building. CityLabs 2.0 topped out in September, with global molecular diagnostics firm Qiagen signed as a tenant. Planning permission has now been granted for the £50m CityLabs 4.0 to continue the scheme.
The past year also saw Bruntwood Works, the company’s offices division, launch its £50m Pioneer scheme to redevelop landmark buildings across the North, including 111 Piccadilly and Blackfriars.
Bruntwood Works’ joint venture with Trafford Council was extended in 2019 with the £50m acquisition of Stretford Mall and Stamford Quarter in Altrincham, while the redevelopment of of the former Kellogg’s headquarter building under the partnership re-opened during the year as new university UA92. Further plans have since been revealed for investment in housing, a new primary school and commercial space.
Bruntwood owns more than 100 buildings across the North and Midlands which are home to more than 3,000 companies, it says.
The company’s founder Michael Oglesby died last November. In 2011, he had been awarded a CBE for his services to industry and charity.