Firm’s housebuilding arm sold 1060 units in 2019, up 25% on 2019

Newly restructured developer St Modwen saw profit fall by 18% on flat revenue in the year to November 2019, despite boosting sales from its new dedicated housing.

The drop in profit came after it was forced to write off £18.5m largley due to an outstanding legal claim over a legacy project. The group’s profit for the year after the exceptional costs was £49.5m, down from £60.5m in 2018, on revenue of £429m.

longbridge birmingham st modwen homes

St Modwen Homes’ site in Longbridge, Birmingham

However its housing arm St Modwen Homes, which makes up 26% of its property assets, saw sales growth of 25% with 1,060 homes sold last year compared to 848 in 2018.

The firm reported the Homes business has a pipeline in place to grow volumes by up to 20% per year up to 2021, with the potential to grow further at a more modest rate after that.

St Modwen’s strategic land and regeneration business has agreed sale of £30m of residential land compared to £53m in 2018.

Mark Allan, chief executive of St. Modwen, said 2019 has been a positive year for St Modwen due to strong growth in housebuilding volumes as well as growing momentum in its industrial and logistics development business.

He said the firm was on track to broadly double its profitability in the medium term. St Modwen will also be launching six responsible business ambitions in early 2020 such as aiming to become operationally net zero carbon by 2025 and fully net zero carbon by 2040.

Allan welcomed the certainty given by the decisive general election result, but said: ”uncertainties around the general economic outlook remain and even though the UK formally left the EU at the end of January, the shape of our future trading relationships with the rest of the world is unclear.

”As such, we remain mindful of the uncertainty this could cause in the near term and the potential effects in the long term.”

The chief executive’s review said: “While we will therefore maintain a conservative level of borrowings and we have the flexibility to adjust our activity quickly in case of any unexpected changes in demand”.

Topics