Scheduled sale to Wellcome Trust will go through in December, developer says
Garden village developer Urban & Civic has posted a pre-tax loss for the year of £8m after seeing the value of its land downgraded in light of the pandemic.
However, announcing preliminary results for the year to September, Urban & Civic said it had seen a huge uptick in the number of reservations in the last quarter of the year, to 29% above the level seen before covid-19 struck.
The results are likely to be the firm’s final results before it is bought out by the Wellcome Trust, in a £500m recommended deal announced last month. The firm published the “scheme document” for the sale today alongside its results, which made clear that it expects the sale to go through on 14 December, given shareholder approval.
Chief Executive Nigel Hugill (pictured, right) said cash receipts from sales were, at £41.6m, “substantially” lower than the business had anticipated, given the four-month interruption to trading dealt by the spring lockdown.
He added: “House sales recovered after July across all projects in delivery but not sufficiently to compensate for what was essentially a four-month interruption between March and June.”
The firm also saw the value of its land holdings fall by £28m compared with September last year, to £499m - albeit a partial recovery from an even lower valuation given at the onset of the pandemic in March.
Hugill said the impact of the pandemic on trading had largely been to push purchases which would normally have completed in the last financial year to the current one, and would ultimately not result in much lost income. However, he said he was concerned about the impact of the pandemic on local and central government’s focus on tackling the housing crisis.
“The pandemic is causing timelines on the adoption of revised local plans to be put back.” he said. “It may also be that the level of future housing requirements becomes reappraised or, at least, deprioritised for a while.
“The structural undersupply in new residential planning consents in south-east England is such that those administrative delays will not last forever, but the slowdown could become counted in years and not just months.”