St Modwen posts £197m profit drop
The Birchwood-based developer recorded a turnover of £287.7m in 2016, equal to its revenue in 2015, however profits dropped from £258m to £60.9m this year.
In 2015, St Modwen’s profits benefited from a £201.7m valuation increase in its £1.7bn portfolio, largely from its New Covent Garden Market asset in London. There was no such boost this year, and in a statement issued with its financial results to November 2016, St Modwen attributed the dip to “a turbulent market backdrop” during 2016.
A “noticeably weaker investment market” impacted profit figures. Overall St Modwen saw £12.5m of valuation gains across its portfolio, less than the £35.7m achieved in 2015. There was also a £12.5m pay-out from changes to stamp duty land tax on commercial properties.
However, St Modwen posted a growth in rental income to £40.5m from £32.8m, and stable development profits of £51.7m, the same as in 2015.
Overall, nationally the developer delivered 800,000 sq ft of commercial space in 2016, and said it has a development pipeline of 1.6m sq ft.
St Modwen is active on several large-scale schemes across the North West. Steven Knowles, director for region, said that in the North West the company had experienced another year of growth.
He said: “We have seen continued resilience amongst our commercial portfolio across the region with a focus on transactional activity and long-term value creation. During the past financial year, we have completed 156 transactions in lettings and lease renewals, amounting to a cumulative rental income of over £1.8m and spanning 278,000 sq ft of space, which has seen the region achieve annual rental growth of 6%.
“During the year we have made good progress with our major developments. We broke ground on Great Homer Street, Liverpool with a 67,000 sq ft Sainsbury’s and a new 80,000 sq ft district centre. In Kirkby, we signed a development agreement with Knowsley Council to bring forward the development of the town centre and we are now progressing a planning application for a new retail scheme that includes a new supermarket and 76,000 sq ft of additional shops.
“We also began construction of the 18,000 sq ft Aldi at Vulcan in Newton-Le-Willows and started on-site with 63,000 sq ft of industrial and logistics space at Stonebridge Business Park in Merseyside with one unit already under offer.
“We have also successfully secured planning permission for two key sites. Consent was granted for 325 new family homes at Wigan Enterprise Park, which we are now bringing forward for development. We also sold the first tranche of housing land at Cromwell Road in Ellesmere Port for the development of 350 new homes.
“This year a key focus is to ensure we continue to add to our portfolio with new opportunities. We have been selected as the development partner of Bury Council for Chamberhall Industrial Park with plans for a high-quality employment-led scheme to be delivered over a number of phases. We also acquired a significant portion of Crosby Town Centre in March 2016 which spans Crosby’s retail core and presents opportunities for further development.”