£20m half-year losses for St Modwen

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by Lin Freestone

St Modwen Properties, the regeneration specialist, has recorded a loss of £20m for the six months to the end of May 2008. In the same six month period of 2007 the company recorded profits of £65.1m.

The company, which has its headquarters in Quinton near Birmingham and operates through a network of regional offices in all sectors of the property industry, holds a portfolio of approximately 5,000 developable acres and 18 town centre schemes.

In the current conditions the company will not attempt to sell any of its residential land until the market has stabilised.

St Modwen has written off £37.7m from the book value of its residential sites, together with £16.9m from its commercial portfolio as a result of the downturn. The company has said it has been the most difficult period for the property industry since 1990, and the sudden downturn has taken the company and the market as a whole by surprise.

There is currently no genuine market for residential land, as the major housebuilders are unwilling to invest in land until they can see the way ahead more clearly. The company has 1,365 acres identified for residential development. Of these, some 946 acres are carried on St Modwen’s books before the benefit of planning permission.

St Modwen has submitted four separate planning applications to Birmingham City Council and Bromsgrove District Council for the regeneration of the 468 acre former MG Rover Works at Longbridge. In total they represent £750m of mixed-use development, 1.8 million sq ft of employment space, and 1,980 new homes.