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Urban Splash posts £10m loss in 2010

Bloxham claims firm is over the worst, but still work to do

Published on September 20th 2010.

Urban Splash posts £10m loss in 2010

Manchester-based developer Urban Splash endured ‘another tough year’ although it managed to claw back some of the money it lost during the property crash of the last two years.

Losses after tax for the year ending 31st March narrowed from £38.3m in 2009 to £10.3m in 2010. The current year losses include £6.3m of exceptional items which the group said were not expected to re occur.

Sales reduced to £34.5m from £49.9m in 2010 and residential in particular “continues to be a challenge, due to a very difficult mortgage market and negative sentiment of many valuers,” according to company chairman Tom Bloxham.

Total rental income rose from £10.6m to £12.7m and commercial rents increased from £9.1m to £10.6m. “The challenge of losing tenants through insolvencies and exercising breaks was more than recompensed by our success with new lettings,” said Bloxham.Residential rental income rose from £1.4m to £2.1m and the size of its portfolio of managed and let Urban Splash residential apartments increased by 83 units to 383 at year end with a value of £59.4m (2009 - £48.4m).

The firm’s mature investment portfolio suffered a modest decline in value of £9.1m or eight per cent making a total fall of 15 per cent from the peak March 2008 values. Splash added 50,000 sq ft of new space across four developments and now let and manage a portfolio of more than two million sq ft of commercial property with a value of £146.8m.

In October 2009, the firm completed a three-year £101.2m facility from HSBC, then in March 2010 it raised £49.4m of new investment from both the Homes and Communities Agency and its banks to build out schemes at Lakeshore in Bristol, Pattern House at Longlands, Stalybridge and the second phase at Saxton in Leeds.

Net debt however has marginally reduced in the period to £221m from £221.8m. Bloxham said the firm was expecting to incur £60m of construction costs in the year to March 2011.

“A friend of mine who is a mountain climber tried to reassure me during the worst of the economic crisis, he explained to me that despite being a committed climber, when he was at the top of the mountain it wasn’t actually much fun,” he said.

“It was freezing cold, gales, rain, hail and snow would blast into his body. He would literally be holding on with his finger tips into whatever hand holes he could find and he knew that if he were to let go he could fall to his death and pull down his buddies tied to him (and at the beginning of 2009 I knew exactly how he felt).

“However, he explained to me that once he had descended the mountain and was relaxed in his hotel in front of a roaring fire and looked back up at the summit he had successfully overcome there was a huge sense of satisfaction. I am still looking forward to that feeling.

“We as a business are not yet through all the difficulties, but I believe we can now see a clear way forward. I believe my team has done an amazing job navigating through the difficulties of this economic recession, the drop in property values and banking collapse. I am very proud of what we have achieved last year but there is still much to be done.”

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