St Modwen takes more cautions approach due to Brexit

(ShareCast News) - St Modwen Properties increased its interim dividend 2% but said it would be likely to take a more cautious approach to strategy after the Brexit decision cast a veil of uncertainty over the UK property market.After the six months to 31 May, the net asset value of the property regeneration group's assets was 2% higher than the same period last year at 421p on a shareholders' equity basis, while EPRA NAV was up 1% to 451p.Although profits in the first half of the year were down on the prior year, the £34m of trading profits was not far from the record £35m generated last time.Profit before all tax was £30m, with last year's figure of £206m boosted by an £128m benefit from the revaluation of its development of New Covent Garden Market (NCGM) redevelopment.This year the company has had to absorb two negative factors: a £21m reduction in the valuation of its share of NCGM and a one-off £13m impact from the increase in Stamp Duty Land Tax (SDLT), which was announced in the recent government Budget. The interim dividend was increased by 2% to 1.94p per share"Following the referendum held on 23 June 2016, we are now operating in a period of uncertainty in relation to many factors that impact the property market," said chief executive Bill Oliver."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".But Oliver highlighted the group had a large and robust £1.7bn portfolio, with a huge 6,000 acre land bank that provides "the flexibility to focus our attention on those areas of the market that will provide the strongest shareholder returns".He said value was being realised from a variety of asset management initiatives and supported by the strength of the regional business, which makes up over 75% of St Modwen's total portfolio by value.During the half-year, the group added value gains of £15m and benefitted from market gains of £13m in the value of the portfolio.