Regeneration company Urban Splash said it has ‘returned to development’ after posting a profit of £3 million for the year ending 30 September 2015
According to its latest accounts the 30-year-old developer, which restructured in April 2013 to refinance £135 million of debt racked up during the recession, had an income of £25.1 million.
The results also report an £11.6 million increase in the value of the group’s commercial asset portfolio and a substantial reduction in its third-party debt, and outlines the company’s ’significant volume of development’.
Urban Splash’s chairman Tom Bloxham said: ’This year has been one of consolidation and development for Urban Splash, where for the first time in a number of years and without distraction, we have been able to fully engage in what we do best: delivering award-winning, design-led and innovative regeneration schemes across the country.
He added: ’We are extremely pleased that we have managed to fight our way through two tough recessions are now once again firing on all cylinders and developing new schemes across the country.’
In the coming months the developer said it wanted to ’continue its focus’ on a number of schemes including Gillespie Yunnie’s overhaul of the Plymouth Civic Centre, further stages of its modular housing projects (hoUSe) at Irwell Riverside and Smith’s Dock, a new phase of Lakeshore in Bristol and the completion of its development at Lister Mills in Bradford.
The Manchester-based firm, which posted huge losses and abandoned a number of key schemes in 2011, has won more RIBA awards than any other property company.
Chairman’s statement by Tom Bloxham
Tom Bloxham of Urban Splash
The origins of Urban Splash date back to 1986 and this year will see the 30th anniversary of incorporating my first limited company, number 02076610 - something I did at the tender age of 23 on 24 November 1986.
This company has continued to trade; first as Splash Posters Limited, then as Splash Holdings Limited, then as Urban Splash Properties Limited and more recently as Urban Splash Work Limited.
The three decades since have seen the revival of many of our English cities the very word ‘urban’ has changed from once negative connotations of urban blight, urban decay and urban deprivation to a positive term. We are proud to have played a part in that transformation. We are extremely pleased that we have managed to fight our way through two tough recessions, are now once again firing on all cylinders and developing new schemes across the country.
I am very pleased to announce an excellent set of results which report total returns of £14.6 million comprising profit for the financial year of £3.0 million and an £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 £7.8 million at the year end which have increased further to £12.1 million at 31 March 2016.
This year has been one of consolidation and development for Urban Splash, where for the first time in a number of years and without distraction, we have been able to fully engage in what we do best; delivering award winning, design-led and innovative regeneration schemes across the country in cities like Manchester, Plymouth, Sheffield, Bristol, Birmingham, Bradford, Liverpool and North Shields.
’This year has been one of consolidation and development’
We continue to work well with our established partners and are building new relationships for our future growth. Our joint ventures with Places for People (PFP) and The Pears Group are working well and evolving.
We were successful in being awarded preferred developer alongside Places for People to develop over 1,000 new homes at Icknield Port Loop in Birmingham, the first new project that the joint venture has won. We completed the first phase at Park Hill, Sheffield under budget and ahead of schedule and are progressing our thoughts on the development of the remainder of the scheme. We have secured planning at the first homes and apartments at Smiths Dock in North Shields and are hoping to start on site with this scheme in 2016.
Our commercial property portfolio remains a very substantial part of our business and continues to perform well. Working with our partners, The Pears Group, we have grown our rent roll, reduced our voids, continued to make strategic disposals, and invested in the refurbishment of several properties to improve our customer experience. We have also acquired an investment property at 4 Canal St Manchester in a joint venture with The Pears Group and are actively looking to buy more.
Aside from our successful JVs with Pears and PFP, we have returned to developing in our own right with aspirations to become the “designer brand” for housing in the UK. hoUSe, our family housing concept which is delivered through modular and volumetric construction methodology, is generating significant interest and is really gathering pace. 2015 saw the first hoUSes installed at New Islington, with all 43 homes sold out and the first sales completing prior to our show house opening and before we had committed any marketing spend.
We were delighted to secure new development finance facilities with the Greater Manchester Property Ventures Fund to deliver these first hoUSes. We regard this backing from the UK’s largest local authority pension fund as well as the first completions to home owners with mortgages as ‘proof of concept’ for hoUSe and are now looking to role this out, securing a number of new opportunities. Most recently we received planning for hoUSe-led schemes at Irwell Riverside, Salford and Smiths Dock, North Shields. We are looking at launching new designs and typologies in the months ahead and are actively looking for new sites and land owning partners.
’We’re finishing off Velvet Mill and progressing our thoughts on the remainder of the site’
Our commercial development projects at Stubbs Mill in New Islington, the Royal William Yard in Plymouth and the redevelopment of New Hall in Liverpool are progressing well, with Stubbs due to complete in 2016. After a 5-year break, we are back on site at Lister Mill where we are finishing off the residential development of Velvet Mill and progressing our thoughts on the remainder of the site.
Plymouth has become a key location for our business. Our developed, wholly owned and fully-let assets at the Royal William Yard continue to perform very well with very strong rental growth and we are finalising our plans to develop the scheme’s remaining buildings. We also continue to invest in and develop the place of the Royal William Yard with a year-round program of events to firmly establish it as an exciting destination and visitor attraction. We have also recently acquired the 175,000 sq ft Civic Centre in Plymouth and are progressing our plans for the building.
We continue to manage a portfolio of over 800 rented homes and our 11 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 per cent. We are actively progressing a pipeline of a further 2,000 units to bring under our management.
Our investment income fell from £11.6 million in 2014 to £6.7 million following the disposal of a number of investment properties in the prior period. Despite the fall in income, the portfolio recorded revaluation gains of £11.6 million (2014 - £9.8 million).
I am delighted to report a profit for the financial year of £3.0 million (15 months ended 30 September 2014 - loss of £43.4 million) and an adjusted profit for the year of £8.1 million (15 months ended 30 September 2014 - £1.8 million) and a good set of trading figures. The adjusted profit and loss account in the Strategic Report shows the reconciliation between the reported profit and the adjusted profit. Turnover for the year was £25.1 million (15 months ended 30 September 2014 - £44.4 million), the reduction on the prior period reflects a shorter period of account with the prior period including a one-off disposal of an £18.9 million portfolio of residential property. Profit before interest, tax and goodwill amortisation was £10.6 million (15 months ended 30 September 2014 - £7.6 million). Total returns on the same basis were £22.2 million (15 months ended 30 September 2014 - £17.4 million).
Significant reductions continue to be made to the group’s third party debt exposure and progress has been made in building cash reserves. At the beginning of the year, the group’s shareholders bought the remaining bank debt from HSBC leading to a large reduction in third party bank debt. Various asset sales in the year further reduced indebtedness resulting in third party debt at the year end of £67.5 million (2014 - £101.7 million) and net cash at the end of the year was £7.8 million (2014 - £3.7 million).