LONDON (Alliance News) - St Modwen Properties PLC on Tuesday said its pretax profit in the first half fell year-on-year despite revenue rising and the company said will take a cautious stance on development following the UK's vote to leave the European Union.
"Following the referendum held on June 23, we are now operating in a period of uncertainty in relation to many factors that impact the property market. Whilst it is too early to accurately predict how the UK property market will respond, until we have more clarity we believe it is appropriate to take a more cautious approach to the delivery of our development strategy," said Chief Executive Bill Oliver.
The FTSE 250-listed group, which focuses on regenerating brownfield sites and building residential developments, said its pretax profit for the six months ended May 31 was GBP35.5 million, down from GBP180.2 million posted for the same period a year earlier.
This came despite a rise in revenue to GBP159.7 million from GBP135.7 million, as the company's profit had benefited from a GBP128.0 million increase in the valuation of its New Covent Garden Market property the year earlier. St Modwen said the first half was hit by one-off GBP13.0 million impact from the increase in stamp duty in the UK and by the valuation on New Covent Garden Market falling GBP21.0 million.
However, St Modwen said it was increasing its interim dividend to 1.94 pence per share, a 2.0% rise from the 1.90p per share offered a year earlier, as many of its major projects were reaching "important milestones with further long-term development potential".
"Our 6,000 acre land bank provides us with the flexibility to focus our attention on those areas of the market that will provide the strongest shareholder returns. Value is also realised from a variety of asset management initiatives, whilst supported by the strength of the regional business which makes up over 75% of our total portfolio by value," said Oliver.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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