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St Modwen takes off

St Modwen Property delivers record interim results, boosted by a go-ahead for the New Covent Garden Market redevelopment.
June 30, 2015

The key driver behind a tripling in pre-tax profits for St Modwen Properties (SMP) at the half-way stage was receiving the go-ahead to develop its 57-acre joint venture development at New Covent Garden Market at Nine Elms. Securing unconditional status means the development is now recognised as an asset on the balance sheet, and it contributed £128m to the £170.2m net valuation increase on the portfolio, thus boosting net asset value per share by a third.

IC TIP: Buy at 453.7p

Net rental income edged up to £18.6m, although this is expected to accelerate in the second half as the group completes 1m sq ft of educational blocks and student apartments at the Swansea University Bay Campus. St Modwen's half share of the rental income will be around £2m in 2015, rising to £3m the year after. It is also progressing with the redevelopment of the 468-acre former MG Rover side at Longbridge, and the first 150,000 sq ft has been let out to Marks & Spencer, due for opening in November.

On the back of these numbers, analysts at Numis have upgraded their forecasts, and now expect net asset value to reach 452p a share by November 2015, rising to 501p the year after.

ST MODWEN PROPERTIES (SMP)
ORD PRICE:453.7pMARKET VALUE:£1.0bn
TOUCH:453.4-454p12-MONTH HIGH:492pLOW: 328p
DIVIDEND YIELD:1.1%TRADING PROP:£206m
PREMIUM TO NAV:15%
INVESTMENT PROP:£1.13bn*NET DEBT:44%

Half-year to 31 MayNet asset value (p)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20142944919.81.463
201539417875.41.9
% change+34+265+281+30

Ex-div: 6 Aug

Payment: 3 Sep

*Includes joint ventures of £223m