St. Modwen Properties PLC (LSE: SMP), the UK’s leading regeneration specialist, today provides a trading update for the financial year to date.
The Company is pleased to announce that the business has continued to perform well since the half year results announcement on 5 July 2011, with rental income, trading profits and cashflows all remaining in line with management expectations. Despite a flat underlying market, our strategy of adding value to our portfolio by progressing sites through the planning process and delivering long term value continues to prove successful.
Positive Residential Progress
Our residential business is well positioned, with over 80% (more than 20,000 plots) of our portfolio having either planning permission or allocations within local plans, and we continue to create value from both planning and development. We are crystallising an increasing proportion of that value by building out residential schemes both in joint venture with partners and through our housebuilding arm, St. Modwen Homes.
Persimmon Joint Venture
Development at the former Goodyear site in Wolverhampton has begun. Marketing began in the second half of September 2011 and we have seen good levels of initial sales.
We have also completed the development agreements and received the first land payments for a further two sites:
• at Glan Llyn, Newport, South Wales where construction has commenced on 311 homes; and
• in Sunderland where 212 homes will be developed.
Detailed planning applications have been submitted for further developments at Coed Darcy, Swansea (300 homes) and Longbridge in Birmingham (229 homes). Construction on these developments is expected to commence in early 2012.
St. Modwen Homes
We commenced marketing at the end of August for our first St. Modwen Homes site, Park View at Longbridge in Birmingham, and have seen an excellent initial response. Of the 115 homes being developed, we have pre-sold 34 for affordable housing and have secured reservations for a further 23 private homes.
Construction of our second St. Modwen Homes site at Locking Parklands, Weston-super-Mare, is well advanced with 30 of the 100 homes pre-sold to a Registered Social Landlord. Marketing for private homes will launch later in the autumn.
Commercial Development Programme
We continue to be pleased with progress in the delivery, planning and pre-letting of our development programme.
Our existing major projects at Bournville College, Longbridge; Etrop Court in Wythenshawe, Manchester; and Venture Fields in Widnes have all been completed on time and within budget.
Our other schemes under construction at Edmonton, Walsall, Birchley, Longbridge (MyPlace) and Taunton are progressing well, as are our remediation contracts in South Wales.
Advances on projects which will complete post 2011 include:
• We have received detailed planning consent for and commenced construction of our development of a new 135,000 sq. ft. production facility for Siemens in Lincoln.
• We have commenced development of Phoenix Retail Park, Longton, Stoke-on-Trent for completion in 2012, with pre-lets to McDonald’s, Smyths Toys and Pets@Home.
• We have made good progress with our developments of new 85,000 sq. ft. foodstores for Sainsbury’s at Longbridge and Tesco at Hednesford, Staffordshire, with construction contracts currently being tendered to enable building to commence by the end of 2011.
• Swansea University has confirmed that they will now proceed with the next stage of the procurement process and have formally entered into competitive dialogue with us in respect of plans to develop a new science and innovation campus on our 50 acre site at Fabian Way.
• Our regional teams continue to find opportunities to generate value and we remain optimistic about our ability to continue to deliver development profits to underpin the future growth of the Group.
Consistent Rental Income
We continue to manage our income producing properties proactively, despite a challenging economic backdrop. To date, during this financial year, we have completed over 150 new lettings and, as a result, have succeeded in maintaining rental and occupancy levels. We are particularly pleased that our secondary retail assets continue to perform well.
Bill Oliver, Chief Executive of St. Modwen commented:
“We continue to make good progress in the year to date. Even in this challenging market, we have been able to drive income throughout our portfolio and I am particularly encouraged by the continued resilience of our retail assets. We have made further valuation gains within our development portfolio through active management initiatives and particularly by progressing sites through the planning process in London and across the UK.
“Demand for developable residential land remains robust and we continue to make further excellent progress in our residential development programme, both through St. Modwen Homes, where we have been encouraged by initial demand, and our joint ventures.
“Our track record of delivery, strong asset management skills and ability to secure new projects, either on our own behalf or in partnership, give us continued confidence in both the prospects for the current financial year and of continued growth in 2012.”
St. Modwen Properties PLC
Bill Oliver, Chief Executive
Michael Dunn, Finance Director
Menna Rees-Steer, PR Consultant
Tel: 0121 222 9400
Tel: 020 7831 3113