St. Modwen Properties PLC (LSE: SMP), the UK’s leading regeneration specialist, today provides a pre-close trading update for the six months to 31 May 2011. The Company is pleased to announce that the business has continued to perform well since the interim management statement issued on 22 March 2011, with rental income, trading profits and cashflows continuing to be in line with expectations.
In addition, our strategy of continuing to add value to our portfolio of developable land by progressing sites through the planning process and delivering long term value creation has proved particularly successful in recent months, notably for our residential land portfolio. Consequently, despite a flat underlying market, the successful results of our active management means that we expect results for the half year and net asset value increases to be at the top end of management expectations, and ahead of consensus forecasts.
Positive Residential Land Outlook
The Company has continued to generate valuation gains by progressing its land bank through the planning process in the first half of the financial year. Highlights have included:
Obtaining outline planning consent for 1,373 homes on the 110 acre former MoD site at RAF Uxbridge.
Obtaining outline planning consent for 1,100 homes at Mill Hill, North London on this former MoD site.
Securing outline planning consent at Long Marston near Stratford upon Avon for the development of up to 500 homes.
Submitting detailed planning permission for 311 homes at Glan Llyn, Newport, South Wales which is expected to be granted in June 2011. The site has outline consent for up to 4,000 homes.
Resolving Compulsory Purchase Order issues at Coed Darcy, Neath. South Wales, confirming an increased outline consent for the development of up to 4,000 homes.
Persimmon Joint Venture
Our joint venture with Persimmon continues to progress very well, providing significant mutual benefits. As well as securing land sales at or above book value, we also gain a share of future development profits, while Persimmon gains access to our well located land bank. During the first half of this year we have:
Completed our development agreement and received the first land payment for 314 homes at the former Goodyear site in Wolverhampton. The site, which has an anticipated end value of £50 million, is now being developed, with the first homes expected to be released for sale in late summer this year.
Submitted detailed planning applications for the development of 212 homes in Sunderland, as well as the 311 homes at Glan Llyn referred to above.
Continued to discuss further developments and expect to jointly progress a further four planning applications during 2011. We expect five sites to be in production by the end of the financial year.
We have also continued to selectively take advantage of opportunities to recycle our land bank, having made £42 million of sales during the period. In addition to the sale of land at Bentley Priory announced earlier this year, we have agreed residential land sales at or above book value at Coombs Wood in the West Midlands, Newton-le Willows in Merseyside and Newport in Shropshire.
Growing Commercial Development Programme
We continue to make very good progress in the planning and pre-letting of our development pipeline. Our regional teams continue to find opportunities to generate value and our near term development pipeline continues to grow, particularly for retail.
We have now exchanged contracts for the pre-sale of an 85,000 sq ft Sainsbury’s foodstore at Longbridge, an 85,000 sq ft Tesco’s foodstore at Hednesford, Staffordshire and a Travelodge hotel at Edmonton. All three of these developments will commence construction during the second half of this financial year. Additionally, we have commenced production of a 25,000 sq ft casino in Birchley, West Midlands and 27,000 sq ft of office facilities for Viridor in Taunton. At Elephant and Castle in London we are now working with Southwark Council to progress the comprehensive regeneration of the centre.
Our existing projects continue to proceed well. Major projects at Bournville College, Longbridge; Etrop Court in Wythenshawe, Manchester; and Venture Fields in Widnes are all expected to complete on time and on budget during the current financial year.
Consistent Rental Income
We continue to manage our income producing properties proactively, maintaining rental and occupancy levels with secondary retail assets performing particularly well.
Bill Oliver, Chief Executive of St. Modwen, commented:
“In the first half of the year St. Modwen has continued to build momentum across all areas of the business and, as a consequence, we expect our interim results to be at the top end of our expectations, both in terms of profit and net asset value growth. Our regional network of offices, skilled development and asset management teams, unique land bank and strong forward position of pre-lets and pre-sales give us continued confidence in both the results for the current financial year and our future growth.”
St. Modwen Properties PLC
Tel: 0121 222 9400
Bill Oliver, Chief Executive
Michael Dunn, Group Finance Director
Charlotte McCarthy, PR Manager
Tel: 020 7831 3113