St Modwen on track to hit profit targets thanks to New Covent Garden Market boost and regional revival
St Modwen said it is on track hit full-year profit forecasts, spurred on the by ongoing recovery in the regions, strong investor demand, and a massive valuation gain from its New Covent Garden market scheme.
The FTSE 250 company, which is redeveloping Britain’s biggest flower and vegetable market, said occupational demand for its offices in the regions has been strong and that interest in its speculative developments has also been encouraging.
It has also taken advantage of an “increasingly strong investor market” and sold a number of mature assets to help fund strategic acquisitions across the UK, the regeneration specialist said in a trading update.
St Modwen’s profits soared in the first half after its planned overhaul of New Covent Garden Market contributed £128m to a net valuation increase of £170.2m in the period.
It is redeveloping the market with joint venture partner Vinci and it is expected to take around a decade to complete from 2017, as it works around the market traders to build new state of the art facilities for 200 businesses on the site and their 2,500 employees.
Read More: Here's what New Covent Garden Market will look like
During the year, it achieved other major milestones including a new £450m campus at Swansea University and the opening of the second phase of its Longbridge Town Centre scheme in Birmingham, including a new 150,000 sq ft Marks & Spencer store.
Bill Oliver, chief executive of St Modwen, said: "The success of all these activities throughout 2015 has culminated in our anticipation of record profits for the business for the financial year, whilst positioning us well for the future."
Liberum analysts left their forecasts and “hold” recommendation unchanged, predicting adjusted pre-tax profits of £48.8m compared with £31.5m last year.