U&I tumbles into red after turbulent year

U and I Group has fallen into the red following a "challenging" year, the real estate developer said on Wednesday.

The loss for the 12 months to 31 March came in at £58.6m compared to a pre-tax profit of £6.3m a year earlier. The basic net asset value was £289.6m, against £360.1m in 2019, while development and trading gains fell to £11.0m from £42.8m. U&I had been targeting gains of £35m to £45m.

The firm said that Brexit, political uncertainty in the run-up to the December general election and then Covid-19 meant the results had been "severely affected" by planning and transaction delays on development and trading projects, as well as valuation impact in its investment portfolio.

The pre-tax loss was primarily caused by £13.5m investment portfolio revaluations, a £20.1m provision for two historical projects and the impacts of overhead and net interest costs - £21.1m - not being fully offset by development and trading gains.

Chief executive Matthew Weiner said: "The last twelve months have been challenging, to the say the least, and this is reflected in our results.

"Confidence briefly returned to the market in early 2020, with strong interest in commercial and residential space following the general election. However, the onset of Covid-19 caused most decision-making and development progress to grind to a halt.

"The socio-economic impact of Covid-19 will continue, at least for the short term, driving new trends and behaviours."

However, Weiner said the pandemic had also brought about "real opportunities".

"We have responded quickly to the unfolding Covid-19 pandemic, strengthening our balance sheet and accelerating our efficiencies programme, which will enable us to emerge strong once markets start to normalise."

As at 1300 BST, shares in U&I were down 5% at 75.0p.