St Modwen posts profit drop; regional value grows

The Birchwood-based developer with a £1.7bn national portfolio posted pre-tax profits of £30m for the half-year to June.

The profit was significantly down from 2015’s figure of £206m, which was bolstered by the £128m valuation of New Covent Garden Market, London. This year, St Modwen’s profits were hit by a £13m stamp duty land tax charge, and a £21m valuation drop. Turnover rose from £135.7m to £159.7m.

The developer is active on several sites across the North West, including Project Jennifer in Liverpool, projects in Crosby, Kirkby and Skelmersdale town centres. Steven Knowles, St Modwen’s North West director, said that the region had experienced growth in the first half of the year.

“We have added a number of strategic acquisitions to our future development portfolio, increased net rental income and sold two assets for which we have recycled the income received back into the business,” he said.

“We have continued to add value to our existing portfolio of income producing assets with the recent acquisition of Crosby Town Centre, along with Wharf Industrial Estate and Chamberhall Business Park, both of which are in Bury. We have also entered a wider agreement with Knowsley Council on the development of a further 60 acres to complement the purchase of Kirkby Town Centre which was completed at the end of 2015.

“The sale of two major distribution centres totalling more than 129,000 sq ft to international parcel delivery firm DPD in Stoke-on-Trent and Stonebridge Business Park in Liverpool in December brought a share of the £25m investment to the North West. At the start of the New Year we completed the sale of Heron Business Park in Widnes for £3.5m. Despite the disposal of these assets we have continued to grow our income in the region.

“In September we will be starting the development of 80,000 sq ft of retail space at Great Homer Street in Liverpool.”

The FTSE 250-listed developer issued a statement nationally, in which the chief executive said that the company would proceed “cautiously” following the Brexit vote.

Bill Oliver, chief executive, told investors “following the referendum held on 23 June 2016, we are now operating in a period of uncertainty in relation to many factors that impact the property market. 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.”