St. Modwen Properties boosts dividend following profit growth

St Modwen Properties hiked its dividend by 16% on Tuesday as it reported growth in interim profits and net asset value per share.

The property investment and development business recorded a profit before tax of £28.1m for the six month period ended 31 May, an 8% increase on the same period last year, while net asset value per share rose by 6.2p over the period to reach 476.4p.

These increases came even as rental income dropped by 24% to £22.5m due to £529m of disposals last year.

The company lifted its interim dividend by 16% to 3.6p per share.

Chief executive Mark Allan said: "Following our significant portfolio repositioning last year through the sale of retail and other non-core assets, our focus has now shifted to growth, building on the substantial opportunities we have in our existing portfolio. This is reflected in a further increase in housebuilding volumes and industrial and logistics development activity, where the structural growth drivers remain positive despite the ongoing economic uncertainty."

Disposals moderated during the half following high levels of disposal activity in 2018, with St Modwen agreeing the sale of 13 non-core retail and other commercial assets for £18m, and selling £13m of residential land during the first half.

The full disposal of the company's residual £143m of non-core assets is expected to be broadly balanced over the next two to three years, it said.

Full-year expectations remain unchanged as the company said its strategy is focused on sectors which continue to benefit from structural growth, with housebuilding receiving government support, as well as high demand for well located industrial and logistics space.

St Modwen Properties' shares were down 0.64% at 429.71p at 0905 BST.