Property developer and regeneration specialist St Modwen has posted a hefty full-year loss, but hopes for a return to profitability following "the worst property market conditions for decades".
The losses were skewed towards the first half of the year and an overall 20 per cent decline in net asset value (NAV) compared with a fall of just 4 per cent in the second half. Even though other property companies have reported valuation increases as the market improves, the long-term nature of St Modwen's land holdings and regeneration projects means slower progress.
Trading profits dwindled to £8.4m (down from £19.5m a year ago) due to very low levels of development activity and the collapse of land sales as housebuilders deserted the market. The focus has switched to marshalling sites through the planning system, and the 'hopper' of developable land has increased 12 per cent to 5,600 acres.
Chief executive Bill Oliver has taken heart from recently issued by UK housebuilders.
"We now have 20,000 housing plots with planning recognition, which is quite substantial," he points out. "If you're looking for a reason to be optimistic about the upturn, start thinking about what a nominal value of £30,000 per plot might be worth."
Following May's £102m placing, finances are on a solid foundation, and management says the dividend will be reinstated when NAV starts to increase.
| ST MODWEN (SMP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 189p | MARKET VALUE: | £378.7m | |
| TOUCH: | 189-190p | 12M HIGH | 269p | LOW: 58p |
| DIVIDEND YIELD: | nil | TRADING STOCK: | £193m | |
| DISCOUNT TO NAV: | 5.50% | |||
| INVEST PROPERTIES: | £763m | NET DEBT: | 80% | |
| Year to 30 Nov | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 268 | 82.9 | 55.4 | 8.80 |
| 2006 | 323 | 96.9 | 61.6 | 10.2 |
| 2007 | 387 | 100 | 73.3 | 11.7 |
| 2008* | 251 | -73.1 | -37.3 | 3.90 |
| 2009 | 200 | -119 | -59.7 | nil |
| % change | -20 | - | - | - |
Ex-div: na Payment: na *Restated to reflect rights issue, interim dividend only | ||||
