St Modwen falls into red
Commercial and residential property company St Modwen saw the value of its portfolio plunge £65.5m and said the industry was facing its toughest test since 1990.
St Modwen lurched into the red, posting a loss of £20m compared to a profit of £65.1m the year before.
“We are reporting on what has been the most difficult period for the property industry since 1990,” the company, unveiling its half year results to the end of May, said in statement yesterday.
It said the residential market was the biggest casualty of the credit crunch but that it was seeing buyers for ‘realistically-priced products’ in its commercial division.
“What was not expected, either by us or the market generally, was the pace and severity of decline in the residential market, which has yet to find a stable level,” St Modwen added.
The group made £48.6m of gross write-downs on the value of its residential land and a write-down of £16.9m on its commercial portfolio. Net asset value per share – a barometer of health of a property company – slipped 4 per cent to 371p.
However, the firm, which specialises in regeneration, kept its dividend of 3.9p per share and analysts defended the company, saying its development pipeline was strong. The firm is set to build 4,000 new homes on an old BP site in Wales.