St Modwen Properties (SMP)

375.3p

Loss to date: 3.2%

Regeneration specialist St Modwen Properties’ (SMP) diversified portfolio of national projects has put the company on course to generate pre-tax profits in the year to December significantly ahead of the £82.2 million it recorded in 2013.

Although this remains in-line with management expectations, Monday’s (2 Jun) update for the six months to June highlighted that the company is benefiting from improving valuations in the residential and commercial markets, where demand from tenants and house builders for land has picked up.

St Modwen also has a strong pipeline with it submitting planning for the development of New Covent Garden Market in London, where work is due to start next year. However, a buying opportunity has been created at the £833.2 million cap. Despite improvements in market conditions, which has buoyed all areas of its operations, the counter has dropped 3.2% since we flagged it at 387.8p (see Plays, Shares 6 Mar) on concerns about a house building slowdown.

The latest update points to a new phase of growth for the company, an opportunity made better by the pull-back in its shares. (MD)