Developer St Modwen Properties has posted a first-half loss and cut its dividend, after the values of large sites in Wales plummeted.
The developer posted a loss of £134.5m during the six months to 31 May, compared with £23.1m profit in the previous year.
St Modwen attributed 43% of its losses to a negative revaluation of large and complex sites in Wales, driven by an increase in development risk premium, changes in legislation, and section 106 and remediation costs.
These resulted in a write-down of £69m, down 53.3%. Net revaluation and development losses amounted to £152.7m, compared to a £13.1m gain in 2019.
Overall portfolio value reduced to £1.4bn during the first half of the year, falling 12.1% when adjusted for investments and disposals.
NAV per share fell by 12.6% to 423.1p, compared with 484.2p in November, on the back of more pressure on land and retail values.
The firm declared an interim dividend of 1.1p per share, down from 3.6p on-year.
However, the company said momentum “has been rebuilt after initial disruption, resulting in operational performance being ahead of initial expectations, while positive structural trends in industrial/logistics have accelerated even further and residential demand has returned since lockdown”.
Rob Hudson, interim chief executive at St Modwen, said: “While our results for the half year reflect the disruption of the crisis, our decisive actions have worked to rebuild the momentum achieved over recent years, with strong demand for industrial/logistics space and new homes.
“Although the wider economic outlook will remain uncertain for some time to come, structural growth trends in these key markets for us remain positive and, to an extent, have even accelerated further. With our proven strategy and solid balance sheet, we stand well placed for future growth.”
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