Industrial property is en vogue with investors, a fact not missed by St Modwen (SMP). The regeneration specialist and housebuilder accelerated the development of its logistics pipeline last year, with these types of assets accounting for 44 per cent of the group’s portfolio by value. Management expects to increase completions further in 2020 to between 1.5m and 1.7m sq/ft, but it has a total pipeline of 19m sq/ft. The latter could deliver around £56m of estimated rental value, with an 8 per cent yield on cost.
Focusing on the regions continued to pay off for St Modwen Homes, which reported a 3.1 per cent rise in the average sales price. That was enough to offset build cost inflation and combined with improvements in building site coverage meant the operating margin improved top 14.8 per cent, edging towards a medium-term target range of 16-17 per cent. Sales volumes also rose by a quarter and the proportion of forward sold homes was flat on the prior year at 34 per cent.
Analysts at Peel Hunt forecast adjusted net asset value (NAV) of 515p at the November 2020 year-end, rising to 540p in FY2021.
| ST MODWEN PROPERTIES (SMP) | ||||
| ORD PRICE: | 500p | MARKET VALUE: | £1.11bn | |
| TOUCH: | 497.5-500p | 12-MONTH HIGH: | 518p | LOW: 370p |
| DIVIDEND YIELD: | 1.7% | TRADING PROPERTIES: | £16m | |
| DISCOUNT TO NAV: | 3% | NET DEBT: | 29% | |
| INVESTMENT PROPERTIES: | £1.04bn* | |||
| Year to 30 Nov | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 414 | 235 | 97.9 | 5.75 |
| 2016 | 431 | 67.0 | 24.1 | 6.00 |
| 2017 | 451 | 70.3 | 26.9 | 6.28 |
| 2018 | 470 | 72.4 | 27.1 | 7.1 |
| 2019 | 484 | 58.9 | 22.8 | 8.7 |
| % change | +3 | -19 | -16 | +23 |
| Ex-div: | 5 Mar | |||
| Payment: | 3 Apr | |||
| *Includes investments in joint ventures | ||||
