Urban&Civic’s net asset value has risen to £481.2m for the year ending 30 September 2018, after major acquisitions in the Midlands and South East.
The company’s EPRA net asset value jumped by 9.5%, with its EPRA net assets per share 9% higher, at 331.8p.
There were three major acquisitions during the period, with the purchase of Priors Hall, Northamptonshire from joint administrators in October 2017, Manydown in Basingstoke in February, and Calvert in Buckinghamshire.
It takes the total number of strategic projects to eight. U&C said its immediate priorities will be to focus on the planning application for Cambridge, which was submitted two years ago and delayed consented projects in Catesby.
It said the immediate outlook may be “difficult to evaluate”, particularly if the recent drop in consumer confidence is maintained. However, U&C said it had “unusual resilience” through its master developer model selling serviced plots via percentage participation on completion.
Master developer model
U&C uses a “master developer” model, selling large land parcels to housebuilders which are subject to minimum annual payments.
The model provides “infrastructured” plots on consented sites with payment taken through a percentage of the home price when sold. It has a portfolio of more than 50,000 residential plots either consented or being progressed and said the aggregated return represents 4.5 years of forward sales.
The group reported 2,588 contracted and unrealised plots through this model. Completion of outstanding agreements will bring the total to 4,000 plots under licence or deferred sale, representing 19% of its consented strategic holdings.
U&C has scaled back its guidance for completions for the current year from 720 down to 635, despite exceeding last year’s guidance.
It completed 445 developments in the past year, against guidance of 315 and up from 52 in 20175. It also saw a further 240 plots either reserved or exchanged after September.
Sales
Pretax profit rose to £22.3m, three times the level of 2017 (£7.9m), as it sold the bulk of its remaining commercial assets.
Revenue has more than doubled since last year, with £97.9m of commercial and land promotion sales, £43.3m of residential property sales (including £8.8m in joint ventures) and rental and other income of £18m.
Commercial sales included the Stansted Hotel development, Feethams and Bradford leisure schemes for £18m, Skelton retail park for £7.4m and a 50% share of the Manchester New Square residential scheme to the Greater Manchester Pension Fund for £22.9m.
U&C will reinvest profits into its strategic projects where it has “a clear competitive advantage”.
Its net gearing sat at 16.3%, despite more than £60m of large infrastructure investments, comprising two new schools and a £30m link road in Rugby.
Chief executive Nigel Hugill said: “Urban&Civic has early-mover advantage on strategic sites and is establishing a brand that works for housebuilders, community stakeholders and landowners alike.
“It would be plain naive to be complacent at present but our Master Developer model with 4.5 years of forward sales on contracted plots and 10-year Homes England backing affords unusual resilience.
“The revisions to national planning policy were anticipated and are expected to prove to our advantage.”
The company intends to apply for premium listing in January 2019.
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