22nd March 2011
Interim Management Statement for the period to 22 March 2011
St. Modwen Properties PLC announces continued progress across all areas of the business.
Since the start of 2011, St. Modwen has continued to make good progress across all areas of operations, with trading profits and cashflows in line with management expectations. The Company continues to add value to our portfolio of developable land by progressing sites through the planning process, and to identify new acquisitions to add to the landbank for potential development in order to deliver long term value creation.
Positive residential land outlook
We are well positioned to take advantage of increased activity in the residential land sector with over 80% (20,000 plots) of our residential portfolio either secured with planning permission or allocated within local plans.
We continue to make tangible progress in our joint venture with Persimmon and plan to start construction on, and receive land payments for, three sites by the end of 2011. Most significantly, on 2 March 2011, we secured detailed planning permission for 314 homes at the former Goodyear site in Wolverhampton with an expected end value of £50 million. Additionally, we have submitted an application for detailed planning permission for 311 homes at Glan Llyn, Newport, South Wales. Both illustrate our ability to unlock value from our longer term residential assets within our land bank, accelerating the use of our residential land stock and improving profitability at values equal to or ahead of book values.
Our joint venture with Vinci Plc is another illustration of our ability to successfully secure residential planning. In January 2011, we were granted outline planning consent on the 110 acre former MoD site at RAF Uxbridge, for 1,373 homes. The achievement of this planning milestone, at a time of recovery in the price of residential land, should prove value enhancing in the current financial year.
We continue to manage our income producing properties proactively. To date this year we have completed 70 new lettings and renewals and maintained rental levels.
Development pipeline continues to grow
We continue to make strong progress in achieving further successes in the planning and pre-letting of our development pipeline. Our regional teams continue to find opportunities to generate value and our near term pipeline of development continues to grow. In particular, we continue to experience good take-up from retail occupiers, including confirmation in the period of the pre-sale of an 85,000 sq ft foodstore to Tesco as part of our Town Centre redevelopment in Hednesford, Cannock.
We have recently achieved a major milestone in bringing our commercial land bank forward for development. In February we were granted outline planning consent for Swansea University’s Bay Science and Innovation Campus. The £200 million first phase will comprise 300,000 sq ft of academic accommodation, 2,800 student residential units and associated retail space.
We have also been granted planning permission to construct a Solar Park on our Baglan Bay site in Port Talbot. The Solar Park will comprise 21,000 photovoltaic panels on 30 acres of brownfield land which will generate 5MW of power, sufficient to provide electricity for over 1,200 homes.
Commenting on the Company’s activity, Bill Oliver, Chief Executive of St. Modwen, said:
“Following a strong set of annual results announced in February, the outlook for St. Modwen remains positive, both in terms of future profitability and net asset value growth. We continue to build on the excellent momentum in our income-enhancing asset management programme while achieving sustained progress at our development projects across the UK. This, coupled with our strong forward position of pre-lets and pre-sales, gives us confidence in our future growth.”
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