St Modwen sees continued strong performance
Regeneration specialist St Modwen Properties has continued to perform strongly since the half year results announcement issued on 2 July 2013, according to the company’s latest interim management statement.
This comes against a backdrop of an ongoing strengthening of the housing market and a greater sense of optimism in the regional commercial property sector.
Whilst recovery in some areas of the market remains slower, improving consumer sentiment, supportive government schemes and an increasingly stable economy are contributing to a notably more positive market outlook than has been seen for some time. This, combined with the success of the firm’s ongoing asset management activities, points to profits and cashflows remaining consistent with management expectations for the 2013 financial year.
Demand for St Modwen’s residential land continues to grow with active land transactions indicating some upside against our book valuations.
The company is achieving steady sales rates across its St. Modwen Homes sites and those developed in its joint venture with Persimmon. Overall profits from its development remain in line with expectations set out at the half year.
St Modwen has an active development pipeline and continue to make good progress across its flagship schemes in each region. A clear example of this is the GBP150m regeneration of Great Homer Street in Liverpool where the company is due to start on site in spring 2014.
For this quarter, the key highlight among St Modwen’s four major projects is Longbridge, where the first phase of the Town Centre is now open for trading. The company expects to submit an application for phase two shortly.
St Modwen’s income producing portfolio is performing well as a result of both improving sentiment in the commercial property market and the firm’s ongoing ability to extract maximum value from our assets.
There is good momentum in lettings and asset management and Set Modwen has continued to manage space effectively with voids largely unchanged.
None of St Modwen’s existing corporate or joint venture debt facilities require renewal before November 2014. The company’s cash flows and debt levels remain in line with our expectations and we continue to monitor these closely.
Bill Oliver, chief executive of St Modwen, says: “Confidence in the residential market continues to grow across the UK and we are also seeing more optimism in the regional secondary commercial market which we hope will result in increasing levels of activity. Against this background, our ability to add value across our portfolio through effective asset management and planning expertise is resulting in an increasingly active, well-let development pipeline. This, coupled with our strong balance sheet, means we anticipate delivering continued growth for our shareholders.”