Development Securities posted pretax profits of £45.4m in the year to March 2015, as the company booked better than expected gains from its development portfolio.
The 133% surge in profits came thanks to outperformance by the group’s schemes across London and the South East.
Outgoing chief executive Michael Marx, who will handover the role to executive director Matthew Weiner in July, highlighted the group’s £85m Telegraph Works scheme in Greenwich, south-east London, which it acquired via its takeover of Cathedral Group last year as among the best performers in the development portfolio.
The 272-home scheme on the River Thames outperformed the company’s expectations in the 12 months since buying Cathedral, and accounted for £10.2m of the group’s gross profits, he said.
Marx described the surge in profits as a “step change” in performance and evidence that the group’s strategy was coming to fruition.
DevSec raised £200m in 2009-10, which was subsequently invested in development opportunities in London, Manchester and Dublin.
Marx said the funds raised, which were fully invested by mid 2012, would continue to pay significant dividends over the next few years, with the company revising up its profit guidance for each of the next three years to 2018.
Development also drove the company’s 8.4% NAV growth during the year, with EPRA NAV per share now at 284p.
The company’s investment portfolio saw 12.1% of value gains during the period to £211m, and the overall portfolio now stands at £502m.
Marx said: “This has been a record year for the company, delivering the highest level of underlying profitability to date. This was largely driven by a step change in the level of development and trading gains realised, leading to a material increase in shareholder distributions. We are confident of sustaining and building on this performance in the years ahead. We have a clear strategy, a strong leadership team and good visibility on a pipeline of significant development and trading profits in the years ahead.”
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