St. Modwen Properties PLC (LSE: SMP), the UK’s leading regeneration specialist, is pleased to announce that the business has continued to perform well since the announcement of its 2011 annual results on 7 February 2012. Our profits and cashflows are in line with our expectations, we are very pleased that we have been selected, in joint venture with VINCI PLC, for the major £2bn regeneration of New Covent Garden Market in Nine Elms, London, and that we have completed the previously announced refinancing of our Key Property Investments (“KPI”) joint venture.
Continued Residential Progress
Our residential business has continued to perform strongly, with a strong sales rate and good ongoing demand for our land. Profits from residential development for 2012 remain in line with expectations set out as part of our 2011 results announcement.
Our current planning applications are proceeding in line with our expectations and our active land transactions, particularly in London and the South East, indicate some upside against our book valuations.
In particular, we see significant opportunities for value creation where we can act in partnership with the public sector to create valuable residential land. We have made good progress in working with our public sector partners on our sites at Uxbridge and Mill Hill, and aim to be able to report further on this over the coming months.
Our appointment, in joint venture with VINCI PLC, as preferred bidder for the New Covent Garden Market regeneration is a significant contract win for the Company. This substantial appointment gives us further significant regeneration opportunities in this important area of Central London, and clearly demonstrates the value of our extensive experience in delivering complex regeneration schemes in partnership with the public and private sector.
Commercial Land and Development
Our ongoing projects for 2012 and beyond also continue to progress well, with contracts signed and construction underway on:
• An 85,000 sq. ft. foodstore pre-sold to Sainsbury’s at Longbridge, Birmingham
• A new 135,000 sq. ft. office and production facility for Siemens at Lincoln, now under offer for the sale of the investment
• An 85,000 sq. ft. foodstore pre-sold to Tesco at Hednesford, Cannock
• A 20,000 sq. ft. office facility for Viridor at Firepool, Taunton, now under offer for the sale of the investment.
Our pipeline of 2012 realised property development profits is increasingly secure and we remain confident in our ability to continue to deliver consistent development profits that will underpin the future growth of the Group.
Our land bank continues to grow through capital efficient means. St. Modwen has been selected by Network Rail as the preferred bidder to form a joint venture for the redevelopment of a 70 acre brownfield site known as Chaddesley Triangle, Derby, located next to Pride Park football stadium. With the freehold owned by Network Rail, the site has been identified by the City Council as a strategic mixed use development site.
Resilient Rental Income
Our income producing portfolio continues to prove resilient, and our experience and expertise in both retail and industrial lettings is allowing us to maintain our income streams, despite the difficulties posed by the current economic environment.
The market for secondary property remains challenging. This is providing us with some acquisition opportunities, but may also put pressure on our book valuations for income producing properties.
As announced on 3 April 2012, we have completed the £135m refinancing of our KPI joint venture. The five year facility extends until March 2017. None of St. Modwen’s existing corporate or joint venture debt facilities now require renewal before 2014.
Our cash flows and debt levels remain in line with our expectations.
Bill Oliver, Chief Executive of St. Modwen, commented:
"During the year to date, St. Modwen has continued to perform well, in spite of the ongoing challenges in the economic environment. Our residential portfolio is performing strongly and we anticipate that this will continue, with excellent potential for value creation in this area, particularly through our partnerships with the public sector. While there will undoubtedly be challenges in the secondary property market, we remain confident in our proven business model and in our ability to add value to our portfolio through active asset management."