London-based brownfield developer Urban & Civic reported a significant reduction in profits for the six months ended 31 March 2019.
Financial highlights
- EPRA net asset value up 3.3 per cent at £497.3 million (30 September 2018: £481.2 million). EPRA net assets 340.6p per share: up 2.7 per cent from 30 September 2018 and 7.8 per cent, year on year.
- Profit before tax for the six months to 31 March 2019 £5.1 million (£10.1 million to 31 March 2018),
- 365 residential plots completions at four strategic land sites in delivery (against annual target of 635 plots).
- Further 335 sales expected at Europa Way in the second half, taking full year target to 970 plots.
- Interim dividend 1.4p per share, up 7.7 per cent year on year to recognise maintaining progress. Operational highlights
- Housebuilders increasingly looking to outsource front end project planning and site servicing challenges to preserve ROCE, leaving clear space for Master Developer.
- Planning system has encouraged move to larger projects, particularly in SE England, where barriers to entry are highest.
- Urban&Civic has interests in more than 32,000 approved or allocated residential plots on 7 strategic project sites, with 2 further projects under promotion. All are on or outside the M25 with good demographics and within commuting distance of London.
- Licence model establishes alignment with housebuilders on sales but with lower cost pressures.
- Result is sharply escalating receipts profile; annual contracted minimums from housebuilders increased more than tenfold over 3 years to current £26.8 million.
- Resolution to Grant at Waterbeach, 3 miles north of Cambridge, represents a significant post balance sheet addition. Urban&Civic’s largest single application to date and in the most supply constrained location.
- Urban&Civic transferred to the Premium Listing segment of the London Stock Exchange on 30 April 2019.
- Platform reputation as preeminent Master Developer is enabling tightening selection criteria for new projects.
Nigel Hugill, Chief Executive, said: “This is a market in which housebuilders are going well and estate agents badly. Urban&Civic creates value by obtaining planning consents and delivering new environments in which housebuilders want to build and new homeowners want to live. Demand in our identified locations is driven by simple demographics. Projects like ours disproportionately attract first time buyers and growing families in search of excellent schools; precisely the groups with the highest current tendency to move. We expect to exceed previous sales guidance for the current year.”
IMAGE CREDIT: Richard Croft
