Strategy

Our strategy is intended to improve our returns on capital by concentrating our activities on sectors that have long-term structural growth characteristics while also enhancing our flexibility through tightly controlling leverage and reducing the proportion of our portfolio invested in land.

This is captured through our four key strategic objectives:

  • Portfolio focus and capital discipline
  • Accelerate our commercial development activity
  • Grow our residential and housebuilding business
  • Cement and grow our regeneration reputation.

Portfolio focus and capital discipline

  • Focus on sectors with best structural growth
  • Focus on fewer, larger projects
  • Focus on income
  • Reduce leverage

2018 progress: half year ended 31 May 2018

  • Sold £350m of assets since the end of 2017, bringing total disposals since announcement of new strategy a year ago to £635m, driving significant improvement in portfolio mix
  • Now anticipate selling £150-175m of retail and small assets this year
  • Income producing assets increased in value by 1.2%
  • See-through LTV stable since year end at 24.2% (Nov 2017: 24.2%)

Accelerate commercial development activity

  • >7.5m sq ft in A1 industrial and logistics space to deliver in the medium term
  • Retain the majority of our industrial/logistics pipeline

2018 progress: half year ended 31 May 2018

  • Increased committed industrial/logistics pipeline from 1.0m sq ft to 1.3m sq ft since the start of the year
  • Obtained consent for 1.2m sq ft at key strategic sites at Chippenham Gateway and Copthorne, Gatwick with combined ERV of over £8m
  • Prepared our pipeline for further growth; over 10m sq ft development potential across key strategic sites with ERV of over £60m deliverable over 5-8 years, partly subject to planning, plus over 5m sq ft development potential on smaller sites with over £30m ERV

Grow our residential and housebuilding business

  • Pipeline of >7,500 plots for St. Modwen Homes
  • Potential >9,000 plots for third party land sales

2018 progress: half year ended 31 May 2018

  • Delivered 31% growth in St. Modwen Homes’ volumes with 302 units sold in the first half (2017: 230 units)
  • Delivered 23.3% increase in profit to £11.1m reflecting low level of affordable completions during the previous period
  • Expectation of up to 25% volume growth and 0.5%ppt margin improvement for the full year remains unchanged
  • Sold 21 acres of residential land to third party housebuilders for £27m (2017:£14m)

Cement and grow our regeneration reputation

  • Deliver on our existing major regeneration projects
  • Unlock the next generation of regeneration schemes

2018 progress: half year ended 31 May 2018

  • Released £141m of capital out of first phases of development at Longbridge and Swansea to bring forward significant residual development opportunities
  • Preparing next phase of student housing and academic facilities at Swansea for delivery by 2021
  • Enhancing the Longbridge vision ahead of employment-led next phase
  • Secured the development of c.4,500 homes at Buckover and Wantage