Develop North PLC, a North East-based investment fund, has unveiled a set of positive interim results. For the six-month period ending 31st May 2024, the company achieved a significant increase in both revenue and profit. Despite challenging economic conditions, these results mark an optimistic outlook for the fund’s future performance.
The investment company’s Net Asset Value (NAV) return and consistent dividend strategy have been key contributors to the favourable outcomes. This article delves into the details of Develop North’s performance, the strategic decisions behind it, and the broader economic context influencing these results. Readers will find insights into the fund’s portfolio value, job creation, and future prospects.
Positive Interim Results
Develop North PLC, an investment company listed on the London Stock Exchange, reported a positive Net Asset Value (NAV) return from its investment fund portfolio in its interim results. The results cover the six months ending 31st May 2024. Despite challenging economic conditions, the company’s revenue increased to £0.953 million, with a profit of £0.605 million.
Dividend Strategy
The company maintained its dividend strategy, making payments totalling 2p per share during the six-month period. As a result, the NAV per share increased from 78.9p to 79.6p after dividends were paid, yielding a NAV total return for the period of 3.35%.
Portfolio Value
The total value of Develop North’s portfolio now stands at £20.2 million, with 73.9% of this located in North East England. The portfolio consists of 17 projects across the North of England and Scotland. Recent loan facilities include a £0.6 million six-month facility to fund the acquisition of land with planning permission for roadside retail units in Sunderland.
Job Creation and Development Support
Since its inception in 2017, Develop North has been instrumental in creating over 3,000 jobs and supporting 36 developments with a Gross Development Value (GDV) of more than £195 million. To date, it has loaned over £74 million to fund commercial and residential property schemes in North East England and Scotland.
John Newlands, the chairman of Develop North, stated, “There are indications that the UK economy is gradually turning a corner. Following a technical recession in the second half of 2023, GDP growth resumed in the first quarter of 2024, albeit at a modest level.”
Economic Indicators
Newlands also highlighted other positive economic indicators, such as an increase in real disposable household income of around 1%, following cuts in National Insurance Contributions, falling energy prices, and a reduction in inflation. He believes these factors bode well for the broader property sector.
Housing Market Prospects
Newlands noted that a shortage of housing nationwide is likely to maintain upward pressure on prices, especially if mortgage rates begin to fall. He remarked, “The main question at present is the extent to which the new Labour administration will be able to achieve its objectives of regenerating economic growth while seeking to spend more on clean energy, the NHS, and other areas.”
He also mentioned the potential impacts of government borrowing and indirect taxation.
Commitment to Regional Focus
Brendan O’Grady, fund manager at Tier One, the investment adviser to Develop North, stated, “Deploying almost three-quarters of Develop North’s funds in North East England is a reflection of our ongoing commitment to focus operations in our chosen regional markets.”
O’Grady is optimistic about the opportunities for development in the North East and noted improvements in economic conditions.
Future Outlook
O’Grady expressed hope that falling interest rates next year will bolster demand for properties. He is also encouraged by the new government’s desire to enhance housebuilding, which could open new opportunities for developers.
In summary, Develop North PLC has shown resilience and growth amid economic uncertainties. Their positive interim results highlight the strength of their investment strategy and commitment to regional development. With promising economic indicators and a strategic focus on the North East, the company is well-positioned for future success.