(Alliance News) - St Modwen Properties PLC on Thursday said it has delivered continued operational progress, but warned that extra costs associated with a past project are expected to hurt its net asset value in 2019.
The stock was trading 1.5% higher in London at 455.00 pence a share.
The FTSE 250-listed property investment and development firm reported "strong" growth in its Homes and Industrial & Logistics business units so far in 2019, with its Strategic Land & Regeneration business making "good" progress in monetising the value in its residential land bank and residual non-core assets.
St Modwen Homes' sales volumes increased 25% to 1,060 units from 848 units a year prior, and the company said it is currently "sales active" on 24 outlets. Reflecting this, the company said its forward order book is up 33% compared to this time last year.
Turning to Industrial & Logistics division, the company said its committed pipeline stands at 1.6 million square feet, up from 1.5 million square feet at the same time last year.
The Strategic Land & Regeneration unit, meanwhile, continues to focus on the delivery of the opportunities at St Modwen's existing regeneration projects, the company said.
Looking ahead, the company said its underlying performance has been in line with expectations. However, it expects to recognise an exceptional provision for a potential claim related to a historical development project, which is expected to reduce its net asset value for 2019 by around 8p per share. As at the end of 2018, the company's NAV per share stood at 470.4p.
St Modwen said the legacy project was sold 15 years ago but is subject to a potential legal claim. The company didn't name the project or its location in its statement Thursday.
"Following the major repositioning of our business through the successful disposal of over 40% of our assets in the preceding 18 months, our focus in 2019 has been firmly on delivering the deep pipeline of opportunities in our existing portfolio," said Chief Executive Mark Allan.
He added: "We are confident that the continued delivery on this strategy will drive a meaningful improvement in return on capital and earnings over time."
St Modwen will announce its annual results on February 4 next year, it said.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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