Urban Splash releases an excellent set of annual results

The accounts, which cover the period to 30 September 2016, reflect a strong year for the business, in which it accelerated its development activity around the UK – partially due to its modular housing concept, House.

43 Houses at the maiden scheme in New Islington, Manchester have now completed and are fully occupied – 35 of them selling within the financial year. Subsequent schemes have since been launched at sites including Smith’s Dock in North Shields and Irwell Riverside in Manchester; comprising 171 homes. The first Town Houses were launched for sale at Irwell in July 2016 and 63% of them are sold.

Reflecting on the strong year, Urban Splash Chairman Tom Bloxham MBE said: “It’s been a good year and I am delighted with the very sound financial set of figures we are able to report.

“Launching our modular House was a particular highlight; the response from customers, the property industry and politicians reinforced our confidence in the product which we believe will help accelerate the delivery of much needed homes in the UK.”

Other notable achievements include the completion of Phase 1 at Park Hill in Sheffield; all 260 homes there were completed and are occupied, while in Bristol, the Group commenced work on the next phase of homes at Lakeshore.

Continuing its track record of successfully transforming historic listed buildings, Urban Splash also signed a deal within the year with Town Centre Securities, with whom it will bring one of Manchester’s last untouched mills to life; Brownsfield Mill on the Ancoats side of the city, will offer supersize lofts for sale.

Tom continued: “As well as bringing new build housing to the market, we are also continuing our work on exciting regeneration projects, turning eyesores into wonderful places to live, work and play.”

Urban Splash’s development work with JV partner Places for People continued in the year too; the JV announced the second phase of Park Hill which will feature 200 homes alongside student housing and the proposed S1 Artspace, secured planning for the first modular homes and Smokehouse apartment block at Smith’s Dock in North Shields, and formalised an LLP which will undertake the development of Port Loop in Birmingham – a major brownfield site comprising more than 1,000 homes.

The Urban Splash commercial portfolio also performed strongly, with more than 106,000 sq ft of new deals signed. Significant investment was also made into the 800,000 sq ft commercial portfolio JV with the Pears Group, including refurbishment works to the Tea Factory in Liverpool and the joint acquisition of Office Village in Salford Quays.

The 2.6-acre Barton Business Park in Eccles and the 53,600 sq ft Beehive Mill in Ancoats have also been acquired by Urban Splash as wholly owned investments.

Urban Splash was also awarded 12 new accolades in the year including the Property Week Development of the Decade for Royal William Yard and a Housing Design Award for House. The Group’s awards total now stands at 395.

Concluded Tom: “Prospects for next year look encouraging; we are very well funded, we have good cash reserves and great JV partners. We are beginning to roll out our modular House products across the UK and our large portfolio of regional commercial and residential assets are performing well.

“We hope we can continue with these exciting regeneration projects across the country and, like the ancient Athenians, we proudly fulfill the oath ‘we will leave this city not less but greater, better and more beautiful than it was left to us’.”

SEE FULL CHAIRMAN’S STATEMENT BELOW

Urban Splash Holdings Limited and subsidiary undertakings

Chairman’s statement

Year ended 30 September 2016 I am lucky enough to have one of the best jobs in the world, not only are we undertaking some of the most exciting regeneration projects, turning eyesores into wonderful place to live, work and play, but I am also able to report another very sound set of financial figures.

I am very pleased to announce another excellent set of results which report profit of £12.2 million (2015: £17.4 million) which includes a £7.3 million (2015: £11.6 million) increase in the value of our commercial property assets. I am also pleased to report continued reductions in third party debt and strong cash reserves of £13.9 million (2015: £7.8 million) at the year end.

In the past year we have focused on the delivery of House, our family housing concept which is delivered through modular and volumetric construction methodology and have invested in new product development to create a portfolio of housing typologies. New housing both in terms of quality and supply remains very high up the government’s agenda and our belief is that House and our other typologies in development can help address some of the key concerns that are prevalent in the industry at the moment. Building on the success of our first scheme in New Islington, we are now on site delivering Houses at Irwell Riverside in Salford and Smith’s Dock, North Shields (through a joint venture) with further schemes in the planning process. We are actively seeking new opportunities to bring House to locations across the UK.

Alongside our new-build House projects, we continue with the redevelopment of historic buildings including the delivery of Manchester’s biggest loft apartments scheme at Brownsfield Mill, part of the wider Piccadilly Basin regeneration project, and the completion of the apartment scheme at Velvet Mill in Bradford.

Our joint venture with Places for People (PFP) continues to perform very well and we have made good progress on a number of schemes. We have successfully completed the first phase of Park Hill with all 260 residential units now sold and the commercial space fully occupied but perhaps more importantly, helping to realise our vision for the regeneration of Park Hill which has been 10 years in the making. We have also recently completed formalities to allow us to progress with the rest of the scheme which, working together with PFP, will enable us to complete the story and create a new quarter in Sheffield. We are rapidly developing our exciting plans for the 1,000 new homes at Icknield Port Loop in Birmingham and hope to be on site with the first phase by the end of the year. We have also delivered what we hope are the first of many Houses to Smith’s Dock in North Shields and have started on site with 132 apartments in Bristol in the Timber Building, Lakeshore.

Our commercial property portfolio has performed well with the assistance of our partners, The Pears Group. Our rent roll has increased and voids reduced and we have continued to make strategic disposals, and invested in the refurbishment of several properties, principally the Tea Factory in Liverpool as we continually seek to improve our customer experience. We have also acquired a 46,000-sqft investment property at Exchange Quay in Salford, our second property purchase with The Pears Group and are actively looking to buy more.

We have also been building our standalone commercial portfolio; during the year we acquired developments including the 2.6-acre Barton Business Park in Eccles, Plymouth’s Civic Centre and Beehive Mill in Ancoats shortly after the year-end. We also completed the redevelopment of Stubbs Mill in New Islington which is now fully let.

Royal William Yard in Plymouth remains one of the most important commercial property assets within the group and was crowned Property Week’s Development of the Decade in 2016. There, we have secured planning for the redevelopment of the Melville building which, when finished, will complete our regeneration of the Yard.

The investment income of our commercial portfolio was £7.2 million (2015 – £6.7 million) and the portfolio recorded revaluation gains of £7.3 million (2015 - £11.6 million).

We continue to manage a portfolio of over 700 rented homes and our 12 years' experience of working in the private rented sector coupled with our management systems, in-house sales and maintenance teams has allowed us to maintain very high occupancy levels which are currently in excess of 98%. We are actively progressing a pipeline of a further 2,000 units to bring under our management.

I am delighted to report a profit for the financial year of £12.2 million (2015 – £17.4 million) and an adjusted profit for the financial year (see the adjusted financial statements in the Strategic Report) of £14.7 million (2015: £19.9 million) and a good set of trading figures. The reduction on prior year is mainly due to revaluation fluctuations which are now reported through the Statement of Comprehensive Income. Turnover for the year was £26.0 million (2015 - £25.1 million). Profit before interest, tax, revaluation and goodwill amortisation was £10.0 million (2015 £10.6 million).

Reductions continue to be made to the group’s third party debt exposure and progress has been made in building cash reserves. Various asset sales in the year further reduced indebtedness resulting in net third party debt at the year-end of £65.1 million (2015 - £67.5 million) and net cash at the end of the period was £13.9 million (2015 - £7.8 million).

We won 19 awards during the year recognising the quality and innovative nature of our current schemes, taking our total to 395 and had some very positive coverage of our schemes in the press, Park Hill was judged by The Times to be the 6th coolest place to live in the UK.

My thanks go to all my very talented colleagues at Urban Splash as well our customers, suppliers and partners who together make my job of leading Urban Splash an absolute pleasure.

Tom Bloxham M.B.E. June 2017