St Modwen could face claim over legacy project

St Modwen has warned that it could be facing a claim over a legacy project sold 15 years ago, which could see NAV for 2019 drop by 8p per share. The housebuilder revealed the news in its latest financial results and said it would be setting aside provisional funds for the claim. However, no further details were provided. St Modwen said in a statement to the London Stock Exchange: “To date, no detailed claim has been made by any of the parties involved and as such there is no certainty around the potential amount and timing of any future cash outflow.” The statement added: “We are confident this is a one-off historical issue which is not expected to have any impact on our strategy or medium-term return expectations.” Meanwhile, the company’s sales volume increased by 25% from 848 units in 2018 to 1,060 units in 2019, and its forward order book is up 33% compared with last year. Its committed pipeline stands at 1.6m sq ft (up from 1.5m sq ft since last year) of which 14% is pre-let.  Mark Allan, chief executive of St. Modwen, commented: “Following the major repositioning of our business through the successful disposal of over 40% of our assets in the preceding 18 months, our focus in 2019 has been firmly on delivering the deep pipeline of opportunities in our existing portfolio.  “We have made strong progress on this during the year in each of our three business units and, supported by our solid capital base, we are confident that the continued delivery on this strategy will drive a meaningful improvement in return on capital and earnings over time.” To send feedback, e-mail lucy.alderson@egi.co.uk or tweet @LucyAJourno or @estatesgazette