24th Jun 2020 09:34
(Alliance News) - St Modwen Properties PLC on Wednesday said it has implemented further cost cuts, including laying off staff, as Covid-19 has hurt its rent collection and unit sales.
The FTSE 250-listed property investor and developer said that, in addition to the 20% reduction in board pay and fees announced in March, it has reduced all discretionary spend and bonuses, implemented a temporary tapered reduction in pay for higher earners, and made selective redundancies.
In St Modwen Homes, while work resumed on its sites in the middle of May and its sales centres have reopened, the delay in production caused by the pandemic means its 280 completed unit sales for the the first half of its financial year ended May 31 were down 32% when compared to the same time the year prior.
In its Industrial & Logistics business, there have been delays in construction and leasing, but "good progress" has been made, with 2019 completions now 74% let or under offer and its 2020 pipeline now 53% let or under offer. In its existing portfolio, St Modwen has received 94% of GBP5.4 million rent due in March, April and May.
In Strategic Land & Regeneration, it has received 61% of the GBP4.0 million rent due in March, April and May, taking the overall rent received over that period to 80%.
St Modwen said it expects disruption from the pandemic to result in reduced EPRA earnings for the first half of between GBP4 million and GBP5 million compared to GBP16.2 million a year before. It said it also expects a reduction in the valuation of its retail assets and residential land.
As at the end of May, St Modwen had available cash of GBP157 million, and no debt maturities until December 2023 aside from a joint venture facility of which has drawn GBP2 million.
The stock was trading down 1.7% at 347.11 pence each on Wednesday morning in London and 30% lower than at the beginning of the year.
By Ife Taiwo; [email protected].
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