3rd Jul 2018 08:20
LONDON (Alliance News) - FTSE 250-listed property developer St Modwen Properties PLC said Tuesday that profit fell in the first half of its financial year despite higher revenue generation.
Pretax profit for the six months to the end of May dropped by 18% to GBP25.9 million from GBP31.6 million the year before, due to a fall in development profits to GBP15.4 million from GBP25.0 million. First half revenue rose to GBP211.9 million from GBP151.4 million.
Net asset value per share as at May 31 was up by 1.0% to 455.4 pence from 450.9p the same date the prior year.
St Modwen, in line with its new policy, increased its interim dividend by 54% to 3.10p per share from 2.02p.
During the period, the company said it had made progress in reshaping its portfolio, with the sale of assets worth GBP635 million in value, leading to a reduced exposure to more challenging sectors such as London residential land and UK retail, in order to improve total return prospects.
In June 2017, St Modwen launched its new strategy to accelerate its commercial development activity, increase its exposure to income producing assets, and grow its residential business. To this end, the company narrowed its focus to three UK regions instead of seven.
"We have had a good start to 2018. Our expectations for the full year remain unchanged and we are firmly focused on executing the new strategy we established a year ago. We have sold GBP635 million of assets since then, improving our portfolio mix and allowing us to reduce borrowings, whilst accelerating the delivery of our substantial industrial/logistics and regional housebuilding pipeline," said Chief Executive Mark Allan.
"Despite ongoing uncertainty in the external environment, structural growth drivers in both sectors remain positive, so we anticipate delivering a meaningful improvement in earnings and return on capital in the medium term," Allan added.
Shares in St Modwen Properties were down 0.1% at 420.40 pence on Tuesday morning.
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