Improving valuations in the property market have helped regeneration specialist St Modwen Properties (SMP) to post a solid set of interim results.
The FTSE 250 property group improved 2% to 453.9p on headline figures such as a 306% leap in pre-tax profits to £203.1 million during the six months to the end of May.
This was joined by a 30% hike in the interim dividend to 1.9p a share.
As canny investors know, the size of a property company’s profits are not a suitable way of assessing value. This figure can be swayed by large asset sales and as such the net value of its assets, or NAV, is a better metric.
There is plenty of good news here. NAV increased 21% during the period to 394p, putting St Modwen on target to meet its annual 10% goal. The driver was the balance sheet recognition of its New Covent Garden Market development (see main picture), which gave the business a £128 million valuation uplift.
Yet firm property prices means assets sales are also worth noting. The group made a £41.3 million profit on selling some of its properties, 116.2% higher than a year earlier.
St Modwen is an almost unique play on the residential and commercial property markets. The group buys brownfield sites and transforms them for whatever there is a need for, be it a retail outlet, housing, a hotel or a college.
Current projects include building a 150,000 square foot Marks & Spencer (MKS) store on the site of a former Rover car factory in Birmingham and a new campus at Swansea University.
St Modwen has a 6,000 acre-strong land-bank and a £1.5 billion portfolio.
