- Housebuilding completions recover during the second half, 25 per cent growth targeted this year
- Around 1.5m square feet of logistics space due to be delivered in FY22
St Modwen (SMP) is attempting to cut the influence of its strategic land and regeneration business, which forced the group into a pre-tax loss during the 12 months to November.
“All of the disposals are about getting strategic land back to what it says on the tin,” said newly installed chief executive Sarwjit Sambhi. That means disposing of non-core retail assets and focusing on sites that on feed the logistics and housebuilding pipelines.
Those pipelines are large enough to grow housing completions and the size of the logistics portfolio each by 50 per cent over the next three years, said Sambhi. A further 1.5m square feet of logistics space will be completed this year, around a third of which is pre-let or under offer. Management expects housing completions to jump by a quarter this year and hopes increased scale will boost margins to between 16 and 17 per cent by 2023. With the portfolio value holding steady since the end of May, a 14 per cent discount to forecast NAV looks attractive. Buy.
Last IC view: Hold, 345p, 22 Jul 2020
| ST MODWEN PROPERTIES (SMP) | ||||
| ORD PRICE: | 398p | MARKET VALUE: | £886m | |
| TOUCH: | 396.5-398p | 12-MONTH HIGH: | 539p | LOW: 294p |
| DIVIDEND YIELD: | 1.3% | TRADING PROPERTIES: | £42.4m | |
| DISCOUNT TO NAV: | 7% | NET DEBT: | 31% | |
| INVESTMENT PROPERTIES: | £914m* | |||
| Year to 30 Nov | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 431 | 67.0 | 24.1 | 6.0 |
| 2017 | 451 | 70.3 | 26.9 | 6.28 |
| 2018 | 470 | 72.4 | 27.1 | 7.1 |
| 2019 | 484 | 58.9 | 22.8 | 3.6 |
| 2020 | 428 | -139 | -54.7 | 5.0 |
| % change | -12 | - | - | +39 |
| Ex-div: | 11 Mar | |||
| Payment: | 8 Apr | |||
| *Includes investments in joint ventures | ||||
