ST. MODWEN PROPERTIES PLC
(“St. Modwen” or “the Company”)
Results for the year ended 30 November 2020
St. Modwen delivers strong operational performance and plans for accelerated growth
Sarwjit Sambhi, Chief Executive Officer of St. Modwen, commented:
“St. Modwen delivered strong operational results in 2020 under extraordinary circumstances. Thank you to all our colleagues for their outstanding efforts and for overcoming the challenges posed by the pandemic. Our strategy is focused on two sectors, logistics and housebuilding, where structural demand is growing, acknowledging that the economic outlook is uncertain. These sectors make up 78% of our portfolio today and will represent over 90% within three years. In both, momentum is strong, and we have an attractive pipeline to accelerate growth. Supported by our solid balance sheet, we expect delivery of our growth strategy to increase adjusted EPRA EPS to c. 28 pence and improve our total accounting return to c. 9-10% in the medium term.”
Financial highlights
|
Non-statutory measures(1) |
2020 |
2019 |
|
Statutory measures |
2020 |
2019 |
|
EPRA NTA per share (pence)(2) |
437.7 |
490.8 |
|
NAV per share (pence) |
427.7 |
484.2 |
|
Total accounting return (%) |
(11.4) |
4.6 |
|
Dividend per share (pence) |
5.0 |
3.6 |
|
Adjusted EPRA earnings (£m) |
22.1 |
38.7 |
|
(Loss)/profit for the year (£m) |
(120.8) |
49.5 |
|
Adjusted EPRA EPS (pence) |
9.9 |
17.4 |
|
Basic EPS (pence) |
(54.7) |
22.8 |
|
See-through loan-to-value (%) |
20.2 |
19.6 |
|
Group net debt (£m) |
296.1 |
314.1 |
· NAV per share down 11.7% to 427.7 pence (2019: 484.2 pence), after 1.1% growth in second half of year.
· Total accounting return of (11.4)% (2019: 4.6%), driven by reduction in NAV during first half of year.
· Adjusted EPRA EPS of 9.9 pence (2019: 17.4 pence), due to temporary Covid-19 disruption of income.
· Total dividend of 5.0 pence (2019: 3.6 pence), in line with the existing dividend policy.
· Loss for the year of £120.8m (2019: £49.5m profit), following profit of £13.7m in second half of year.
· See-through LTV stable at 20.2% (2019: 19.6%), reflecting non-core disposals and tight cost control.
Operational highlights
Strong operational performance despite Covid-19 disruption and clear focus on two sectors with long-term growth trends, logistics and housebuilding, with high-quality, scalable platforms and substantial pipelines in both, which paves the way for significant growth in earnings and total return.
St. Modwen Logistics – 49% of total portfolio (2019: 39%)
- Continued to grow highly resilient, modern, income-producing portfolio focused on urban and big box warehouses, with 97.9% of rent collected and 6.1% like-for-like rental growth.
- Completed 1.2m sq ft of new warehouse development during 2020 (2019: 0.9m sq ft), with 81% of associated £7.6m ERV let or under offer, up from 58% of 2019 completions this time last year.
- On track to deliver 1.5m sq ft of new developments in 2021, with 27% of committed pipeline pre-let or under offer (Feb 2020: 18% of 2020 pipeline), expecting to generate attractive 7.5% yield on cost.
Significant upside in 19m sq ft long-term pipeline, focused on key logistics corridors and conurbations, providing visibility to grow portfolio to over £1bn by 2023 through profitable development.
- St. Modwen Homes – 27% of total portfolio (2019: 26%)
- Sold 948 units (2019: 1,060) at £259,000 ASP with 12.4% operating margin (2019: 14.8%), highlighting relative resilience of affordable, high-quality product despite c. 9-10 weeks of lost production in spring
- Net promotor score of 74 (2019: 76) and HBF customer satisfaction rating of 96% (2019: 92%), the second highest for all large UK housebuilders, creating differentiated platform for future growth.
- On track to grow completions by up to 25% in 2021 with margin expected to recover to c. 14.5%, supported by strong order book covering 47% of targeted private sales (Feb 2020: 34%).
- 5,900-plot pipeline provides visibility to grow volumes to c. 1,500 units by 2023, with clear pathway identified to grow margins to c. 16-17% by 2023 and further potential growth beyond that.
Strategic Land & Regeneration – 24% of total portfolio (2019: 35%)
- Sold £125m of non-core assets and surplus land during 2020 and a further £7m since November, which once all completed further reduce the share of SL&R to 22% of total portfolio.
- Intention to sell c. £180-200m of assets by 2023, reducing SL&R to less than 10% of overall portfolio, and focus land capability solely on sourcing land for logistics and residential development.
- Solid operational performance, with 91.6% of rent collected despite impact of lockdowns on residual retail assets, and valuations broadly stable in second half following marked reduction in first half.
- Secured new capital-light strategic land opportunity which, subject to planning, could deliver c. 1,100 new homes and deliver IRR of c. 20%.