Urban Splash marks its 25th “exciting and important year” with £6.5m profit and strong cash reserves
Award-winning regeneration company Urban Splash has marked its 25th anniversary with another strong set of annual results – including profits of £6.5 million and cash reserves of £17.3 million at the year-end.
The financial year ending 30th September 2017, was dominated by the growth of Urban Splash modular family housing concept House, with 43 properties at the first scheme in New Islington selling out; a second wave of Houses were also released during the year at Irwell Riverside in Manchester and Smith’s Dock in North Shields. Since the conclusion of the accounts period Irwell Riverside has also fully sold out and, in March 2018, Urban Splash extended its interest in modular again, acquiring the House factory, assets, trade and 68 staff, from SIG Building Systems and welcoming new investors including TV architect George Clarke and WeBuyAnyCar founder Noel McKee.
Reflecting on its commitment to the increased creation of modular, offsite homes, Urban Splash Chairman Tom Bloxham MBE said: “We are big advocates of the use of modular technology to create better designed, affordable and more efficiently created homes in this country. It’s been a hugely exciting year for us at Urban Splash as this area of our business has grown so significantly; we already have plans to deliver further sites including at Wirral Waters in Merseyside, Campbell Park Northside in Milton Keynes and Port Loop in Birmingham.”
The company also maintained its commitment to regeneration investing from its own balance sheet during the year on schemes including Avro in Manchester – 31 of the largest loft style apartments in the city housed in one of the last remaining, undeveloped Victorian Mills. The company has also invested in the acquisition and refurbishment of Beehive Mill in Ancoats, the final phase of Lister Mills in Bradford and investment into Royal William Yard in Plymouth.
A reflection on the year from Chairman Tom Bloxham MBE also saw him praise the company’s partnerships including with Places for People – with whom Urban Splash is delivering large-scale communities including Campbell Park in Milton Keynes, Port Loop in Birmingham and Smith’s Dock in North Shields, Park Hill in Sheffield and Lakeshore in Bristol. Collectively the schemes comprise more than 2,000 homes.
A longstanding relationship with Pears also flourished during the year, with a programme of building refurbishment including the Tea Factory and Vanilla Factory in central Liverpool and Boat Shed in Salford Quays. The works resulted in all-time lows in the portfolio’s vacancy and a commercial investment income of £7.4 million. Further income came from the company’s management of a 700-unit portfolio of Urban Splash properties managed on behalf of joint venture partner Places for People.
Concluding his thoughts on the company’s achievements and 25th year in business, Bloxham said: “I am very proud of what we have achieved with the help of all our partners and our dedicated staff and so far; we are celebrating our silver anniversary but have no intention of going into our golden years just yet!”
An exhibition entitled “It Will Never Work” chronicling the achievements of Urban Splash in the past quarter of a century is being hosted during the year and tomorrow, it moves from RIBA North in Liverpool to Birmingham.
Chairman’s Statement
It is hard to believe on July 19, 2018 it will be 25 years since my friend Jonathan Falkingham and I set up Urban Splash. Literally 2 men in a rundown shed in a back street of Liverpool.
Since then we have travelled a long way but we still have that same excitement about great design and the power of place making.
2017 has been a very eventful, exciting and important year in our history, I am pleased to report another very sound set of financial results.
I am very pleased to report profits of £6.5 million (2016: £12.2 million) which includes a £3.6 million (2016: £7.3 million) increase in the value of our commercial property assets. I am also pleased to report strong cash reserves of £17.3 million (2016: £13.9 million) at the year end.
In the past year we have continued to focus on House, our modular family housing concept and growing its business. Most importantly, in March 2018, we acquired the trade and assets of SIG Building Systems Limited, the company which manufactured our first products, Town House and Fab House, and in doing so formed a new company, Urban Splash Modular Limited. The acquisition is a statement of intent and our commitment to modular housing delivery. We are now a fully vertically integrated business enabling us to better develop new products and control the whole process of delivering House, end to end. We have welcomed 68 new colleagues to the business and are very much enjoying working with them to deliver the best new build homes on the market.
In bringing in new investors Noel McKee, George Clarke and Guy Ackernley, we have expanded the expertise needed to really grow this business to help meet the government’s policy objectives and more importantly, the housing needs of the country. Our scheme at Irwell Riverside in Salford will be complete in 2018 and will deliver 72 new homes taking the number of modular build houses constructed by Urban Splash across the UK to 149.
The regeneration schemes on which our reputation has been built continue to be a very important part of the business. We are onsite with the redevelopment of Avro, one of the last Victorian Mills to be converted in Manchester and formerly known as Brownsfield Mill. The development will bring some of the largest apartments in the city. Sales have been strong showing that city centre living is maturing and is not just about apartments for rent to young professionals. We also completed the development of a further 50 apartments at Velvet Mill in Bradford and are well progressed in delivering the remaining “roof pods” which will complete the development. We have also advanced our plans for the Civic Centre in Plymouth and gained planning consent for the Melville building at Royal William Yard. Expect more news on these schemes later in 2018.
Our joint venture with Places for People (PFP) continues to grow, securing the development of circa 500 homes at Campbell Park in Milton Keynes during the year. We are progressing with the second phase of Park Hill in Sheffield and will soon be on site with the first phase of our exciting scheme at Icknield Port Loop in Birmingham which will see 1,000 new homes, many will be supplied by the House business. The first 34 new homes at Smith’s Dock in North Shields were all supplied by the House business and the first two Smokehouse apartment buildings will complete later this year. We are also making good progress with 136 apartments in Bristol in the Timber Building, Lakeshore.
We continue to work in partnership with the public sector and local authorities and were very pleased to be selected for all of the 5 regions of Homes England’s Development Partner Panel, giving the business access to bid for public sector development opportunities. In total we now have a pipeline of over 3,000 homes across our standalone business and our joint ventures.
Working with our partners, Pears, our commercial property portfolio has been very active this year with a number of strategic building disposals and a program of refurbishment of existing stock. The rent roll across the portfolio has increased and voids have reduced to historic lows. We continue to invest in our portfolio to improve our customer experience with significant works completed or underway at the Tea Factory and Vanilla Factory in Liverpool and at Boat Shed in Salford. We also refinanced our portfolio with a new £30 million, 5 year loan facility with ICG Longbow.
We have also been enhancing our wholly owned commercial portfolio following the acquisition of Beehive Mill in Ancoats which is undergoing a £1.5 million refurbishment and several units at Park Hill in Sheffield. We also refinanced this portfolio with a new £5.3 million, 5 year loan facility with Rothschild.
The investment income of our commercial portfolio was £7.4 million (2016: £7.2 million) and the portfolio recorded revaluation gains of £3.6 million (2016: £7.3 million).
Another long-held ambition was achieved this year with the establishment of an Urban Splash Residential investment vehicle which holds Urban Splash developed residential property for rent. The vehicle, which is not part of the group but which is managed by Urban Splash, has secured a seed portfolio of circa £10 million of property and is looking to raise further investment to acquire more properties. I firmly believe in residential property as a secure long-term investment and hope to see this grow significantly in the years to come.
We continue to manage a portfolio of over 700 rented homes and our 13 years' experience of working in the private rented sector coupled with our management systems, in-house sales and maintenance teams has allowed us to maintain very high occupancy levels.
I am delighted to report total comprehensive income for the year of £6.5 million (2016: £12.2 million), the reduction on prior year is mainly due to 2016 benefiting from higher profits on disposal of fixed assets and a higher revaluation of commercial properties. Turnover for the year was £19.1 million (2016 - £26.0 million), the reduction reflecting the timing of completion of development projects.
The two new long-term loan facilities secured against our commercial property portfolio together with new development facilities for our House business resulted in an increase in the group’s third-party debt to £76.9 million (2016: £65.1 million). Cash generation remained strong and at the end of the year cash balances stood at £17.3 million (2016: £13.9 million).
We increased our total number of awards to over 400, winning 14 awards during the year of which over half related to House and all of which continue to acknowledge the quality of our design and recognise our innovation. I was also delighted that my great friend and Urban Splash co-founder, Jonathan Falkingham, was awarded a Fellowship by RIBA.
We have two birthdays this year; it is 30 years since this business was originally incorporated and 25 years since the company became Urban Splash. This has allowed us to reflect on our achievements and the hurdles we have had to get over to deliver the transformation of our cities which has culminated in our exhibition “It will never work”. I am very proud of what we have achieved with the help of all our partners and our dedicated staff and so far, it has worked – we are celebrating our silver anniversary but have no intention of going into our golden years just yet!
