St Modwen posts bumper profits as CEO announces retirement

Despite almost doubling full-year profits, shares in St Modwen Properties subsided on Tuesday as the developer announced the retirement of long-time chief executive Bill Oliver.

Oliver, who will step down at the company's November 2016 year end, held the top role for 13 years after promotion from finance director, meaning he spent 17 years on the regeneration specialist's board.

He oversaw a bumper year in 2015, lifting profit before tax by an unprecedented 91% to £258.4m and earnings by 82% to 97.9p per share.

A 25% increase in the total dividend was recommended for the year to 5.75p per share, meaning the final dividend will be 3.85p per share.

The £127m revaluation gain from achieving unconditional planning status for its New Covent Garden Market was a large part of the £201.7m overall valuation increase from market-driven valuation gains and gains from planning and asset management initiatives.

This helped swell EPRA net asset value 30% to 446p per share, while property profits from development increased 31% to £67.4m.

As well as a new revenue stream from student accommodation, St Modwen also began to move into the residential rental market last year with two properties generating £0.7m of annualised income, two more in the planning process and plans to continue monitoring the sector for suitable sites.

In house building, the first sites in the joint venture with Persimmon will be completed in 2016, with the majority of the 2,300 plots under the agreement now in development.

Over the coming year, the company's 30th on the public markets, the nascent St Modwen Homes unit is expected to expand to eventually becomes more dominant and replace the profits from the Persimmon joint venture as it comes to an end in 2018.

The company feels it is well positioned for the coming year, with the investor market expected to remain supportive for the disposal of mature assets, while the housing sector demand should also see steady sales of residential land and continued growth from the housebuilding unit.

But chairman Bill Shannon cautioned that St Modwen was not immune to the current macro-economic uncertainty but that its "extensive regional portfolio provides us with a good base from which we will continue to realise residential and commercial development opportunities, either from our existing land bank or through new acquisitions".

"In addition, our retained portfolio of assets and new ventures, including income producing residential, should ensure a continued stream of recurring income that continues to underpin the business running costs."