ST. MODWEN DELIVERS SOLID RESULTS AND MAKES GOOD PROGRESS IN EXECUTING NEW AND FOCUSED STRATEGY
Mark Allan, Chief Executive of St. Modwen, commented:
“2017 has been a positive year for us. Having established our new, more focused strategy, we started to shift our portfolio towards sectors with better structural growth characteristics, we increased commercial development activity, grew housebuilding profits and reduced net borrowings. This will continue in 2018 and beyond, so despite continuing uncertainty in the external environment, the significant potential in our existing pipeline means we expect to deliver a meaningful improvement in earnings and return on capital in the medium term.”
|Financial highlights Non-statutory measures(1)||2017||2016||Statutory measures||2017||2016|
|EPRA NAV per share (pence)||471.2||460.5||NAV per share (pence)||450.9||431.0|
|Total accounting return(2) (%)||6.0||5.6||Total dividend per share (pence)||6.28||6.00|
|Trading profit (£m)||64.6||56.1||Profit before tax (£m)||70.3||66.9|
|Adjusted EPRA EPS(3) (pence)||13.3||9.7||Basic EPS (pence)||26.9||24.1|
|See-through loan-to-value (%)||24.2||30.5||Group net borrowings (£m)||433.8||470.0|
NAV per share up 4.6% to 450.9 pence (2016: 431.0 pence).
- Total accounting return(2) for the year up 0.4ppt to 6.0% (2016: 5.6%).
- Trading profit up 15.2% to £64.6m (2016: £56.1m).
- Total dividend up 4.7% to 6.28 pence per share (2016: 6.00 pence per share).
- See-through LTV down 6.3ppt to 24.2% (2016: 30.5%).
- Successfully refinanced majority of debt facilities with new £475m unsecured facility post year end, providing greater flexibility and longer debt maturity at lower cost.
Building momentum in executing our more focused strategy based on four strategic objectives, with a clear focus on sectors with long-term structural growth characteristics.
Portfolio focus and capital discipline:
- Good progress achieved in shifting portfolio mix by increasing exposure to income producing assets to 51% (2016: 45%), with intention to further increase this over time.
- Sold Nine Elms Square land for £190m net proceeds, £27m small assets, Swansea student housing for £87m net proceeds post year end and intend to sell £100-150m retail and small assets in 2018, with terms agreed on c. £40m of this.
Accelerate our commercial development activity
- Delivered 1.4m sq ft new space with total GDV of £216m, including 0.9m sq ft industrial and logistics space of which we will retain £66m, with 1.6m sq ft committed pipeline at start of 2018 expected to grow further during the year.
- Prepared pipeline to deliver continued growth in 2019 and 2020 subject to tenant demand, with 7.5m sq ft medium term A1 industrial and logistics pipeline which has a GDV of c. £700m and ERV of c. £45m of which we expect to retain the majority.
Grow our residential and housebuilding business
- Sold 54 acres of residential land to third party housebuilders for £56m (2016: £48m) at or above book value, with at least similar volume expected for 2018.
- Delivered 43% growth in St. Modwen Homes’ volumes to 694 units sold (2016: 485), driving 52% growth in pre-tax profits to £23.3m (2016: £15.3m), with up to 25% growth in volumes expected for 2018.
Cement and grow our regeneration reputation
- Started next phase of development of academic facilities and student housing at Bay Campus, Swansea, having released £87m of capital from the sale of the first phase.
- Progressed development of NCGM market facilities following the sale of the first ten acres of land and further phases of mixed-use development at Longbridge.
- Secured two major new residential schemes in Wantage and Buckover for combined 4,500 new homes on a ‘capital light’ basis.
|St. Modwen Properties PLC|
|Mark Allan, Chief Executive|
|Rob Hudson, Chief Financial Officer|
|Kathryn Edwards, Interim Head of Corporate Communications
Tel: 0121 222 9400
Tel: 020 3727 1000
A presentation for analysts and investors will be held at 9.30am today at FTI Consulting, 200 Aldersgate, Aldersgate Street, London, EC1A 4HD.
If you would like to attend please contact Ellie Sweeney at FTI on +44 (0)20 3727 1622 or firstname.lastname@example.org. A live webcast of the presentation will be available at www.stmodwen.co.uk and presentation slides will also be available to download.
Alternatively, details for the live dial-in facility are as follows:
Participants (UK): Tel: +44(0)20 3936 2999
Password: 18 08 40
This announcement contains inside information as set out in Article 17 of the Market Abuse Regulation (MAR).
(1) Reconciliations between all the statutory and non-statutory measures and the explanations as to why the non-statutory measures give valuable further insight into the Group’s performance are given in note 2 to the Group financial statements.
(2) Our definition of total accounting return was revised in the year so that it now represents dividends paid in the year plus the movement in NAV per share in the year, rather than the movement in EPRA NAV per share. This change reflects that our strategy includes the repositioning and recycling of our portfolio towards sectors with strong structural growth, whereas the EPRA model assumes that properties are retained. An analysis of the effect of this change on the measures is included in note 2 to the Group financial statements.
(3) Our key performance metrics include a new measure of adjusted EPRA earnings and an associated adjusted EPRA EPS calculation. This is a measure of profits which excludes non-cash valuation movements and will be used as a reference for dividend payments in the future. A detailed analysis of how this measure is calculated and reconciled to our statutory figures is included in note 3 to the Group financial statements.
While the financial information included in this announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards as adopted by the EU (EU IFRSs), this announcement does not itself contain sufficient information to comply with EU IFRSs. The Company expects to publish full financial statements that comply with EU IFRSs by the end of February 2018.
This announcement contains certain forward-looking statements which, by their nature, involve risk and uncertainty because they relate to future events and circumstances. Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements. Any forward-looking statements made by or on behalf of the Company are made in good faith based on the information available at the time the statement is made; no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. The Company does not undertake to update forward looking statements to reflect any changes in its expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. Nothing in this announcement should be construed as a profit forecast.