Housebuilder St Modwen has increased its net asset value in its half-year results to 31 May 2019, following a significant disposal programme, which is now set to continue at a slower pace.
Despite the loss of £9.7m in net rental income following more than £800m of disposals over the past 18 months, adjusted EPRA earnings increased by 16.5% to £16.2m. This was due to new lettings, lower interest costs and growth in housebuilding profits.
St Modwen’s NAV per share rose by 1.3% to 476.4p.
Mark Allan, chief executive of St Modwen, said: “We have had a positive first half of 2019 and our expectations for the full year remain unchanged. Following our significant portfolio repositioning last year through the sale of retail and other non-core assets, our focus has now shifted to growth, building on the substantial opportunities we have in our existing portfolio.”
The disposals included half of its retail portfolio for £177m, less than 1% below book value, plus £48m of small assets. This was double the £100m-£150m initially targeted for the year.
The housebuilder has now slowed its disposal programme and expects to sell £143m of non-core assets over the next 2-3 years. The £143m figure includes £72m of retail, of which 25% is sold or under offer and a further 40% is in active negotiations.
St Modwen said it will also “remain selective when it comes to acquisitions”, highlighting “ambiguity” around Brexit.
“The general economic environment is uncertain and likely to remain so for some time to come… We maintain a tight control of discretionary spend until the economic and political outlook normalises.
“The firm’s strategy will remain focused on growing sectors including housebuilding, supported currently by government policy and well located industrial and logistics space.”
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