Commercial property company Bruntwood has filed its latest set of accounts for the financial year ending 30 September 2016. Net worth, at £473m, was up by 16% on 2015, significantly surpassing its pre-recession high of £437m. The company also broke through the £1bn mark for property under ownership for the first time in its 40 years.
Turnover for the company also hit a new record level of £118m, up 9% from £108m in the previous year. Reporting under the new accounting standard FRS102 for the first time, profit for the financial year was £69m compared £70m in 2015 (restated). Under FRS102, companies are now required to bring revaluation gains into their profit and loss account. It was noted that whereas the 2015 profit figure (as restated under FRS102) was aided by market movements, the 2016 figure was more impressive as it was entirely the result of the group’s own endeavours in a fairly flat market.
During the year, the group acquired over 100,000sqft of property, including Commercial Union House in Manchester, which is currently being redeveloped as Union creating high-quality workspace at the heart of the city's financial core, and Synergy House at Manchester Science Partnerships. The business’s comprehensive development pipeline continued to take shape. In Leeds, Bruntwood have remodelled the 120,000sqft former City House into Platform which is nearing completion, similarly transforming the 110,000sqft former 2 Cornwall Street in Birmingham into Cornerblock and undertaking the site enabling works for Circle Square in Manchester. In total, £96m was invested in development and refurbishment across the portfolio.
The group expects to complete 700,000sqft of schemes in 2017 including starting on site with the commercial phases of Circle Square and continuing the significant repositioning project at Alderley Park, Cheshire. In all, the group has £1.4bn GDV of development pipeline in addition to c£1bn of existing assets.
Post year end, the group negotiated a new £115.5m 15 year facility with Aviva, creating headroom in its existing facilities to support its growth ambitions. Group gearing ended the year at a conservative 49% Loan to Value.
Bruntwood’s continued success allowed the business to increase its support to its local communities: directly and through the Oglesby Charitable Trust donating over £3.4m to charity, arts, environmental and medical initiatives.
Group CEO, Chris Oglesby commented: ‘This has been another fantastic year for the Bruntwood Group of Companies which continue to go from strength to strength. Despite the uncertain macro-economic backdrop, demand for our product and service proposition in our core cities remains strong. Vacancy in our investment portfolio is at an all time low, and we now have the capital and financing structure to not only deliver our significant development pipeline, but also to provide resilience should economic conditions change.
Our focus on the growth sectors of science and technology, particularly through our ownership of Manchester Science Partnerships, aligns the group’s strategy well with that of the government’s as these sectors in the the City Regions of the North and Midlands form such an important part of the country’s forward looking Industrial Strategy. We welcome that in his Autumn statement, the Chancellor reinforced the importance of the Northern Powerhouse and Midlands Engine initiatives, which we wholeheartedly support, in helping to rebalance the country’s economy away from dependence upon the South East and in driving economic growth in a post-Brexit United Kingdom.
In this context, whilst we recognise the inherent macroeconomic and geopolitical risks, we remain confident that our customer focussed business model will continue to prosper for the benefit of all our stakeholders.”