St Modwen hails return to profit

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St Modwen, which has posted a profit, plans to redeveop the disused Longbridge MG Rover car plant near Birmingham

Regeneration specialist St Modwen has said the residential land market had started to recover as it recorded its first full-year profit in three years.

The firm, which specialises in town centre redevelopment and bringing former-industrial sites back to life, posted pre-tax profits of £37.5 million in the year to November 30, compared to losses of £119.4 million the previous year.

The last time it posted pre-tax profits was in the year to November 2007, before the financial crisis sent the property market into freefall.

The Birmingham-based firm reported a £23 million increase in the value of its properties, as the price of residential land regained some of its value, which it said may reflect the start of a recovery in the market, and the value of commercial land stabilised.

Profits from the sale of property nearly trebled to £21.9 million, while revenues from rents increased 5% to £46 million.

A detailed planning application has now been submitted for a £70 million regeneration of Longbridge town centre near Birmingham, it also announced.

The application includes plans for a supermarket, retail park and restaurants and 40 apartments and will form a focal point for the overall £1 billion regeneration of the former MG Rover car plant at Longbridge.

St Modwen, which said it has a strong landbank, also announced that it bought land from UK Coal at Pelsall in Walsall and Castle Gresley in Derbyshire.

It is also taking part in a joint-venture to develop 2,000 homes over seven sites with homebuilder Persimmon.

Shares in St Modwen are up 3% following the results, which Chris Millington, an analyst at Numis Securities, described as “a solid performance against a difficult market backdrop”.

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