St Modwen meltdown
'The residential land market remains virtually non existent. We do not expect this market to recover for some time, and are planning our business accordingly. ... Cash management and cost control are priorities at this time, and the necessary decisions are being taken to maintain the long-term potential of the business. ... "being very selective in the acquisition opportunities we pursue. ... a number of development agreement opportunities where the initial requirement is to put in our skills rather than cash.' -- St Modwen, October 2008
'Like lots of companies, which have to borrow heavily in order to make speculative investments, St Modwen are feeling the pinch. Their shares have fallen by over 50% in the last year and, as a result, its borrowings of £470 million are about £100 million more than its worth.' -- Fight the Height
Earlier in the year, St Modwen claimed they were not effected by the collapse in the property market. A few weeks later they reported their disastrous half-yearly results: massive wipe down in value of assets, share price halved, big losses.
Since then, the financial woes of St Modwen has continued to worsen. Their liabilities now exceed their assets, technically they are bankrupt. It will only take one creditor to pull the plug or the banks to pull in their loans and St Modwen will go under.
St Modwen recognise the dire situation they are in and have decided to pull out of development (they had already pulled the plug on Hatfield, having first trashed the town) and instead offer their skills to local councils, ie jump on the consultancy gravy train.
Anyone who has had experience of St Modwen would question what skills do they have to offer?
They are very good at trashing town centres, destroying green belt, getting into bed with corrupt councils who then promote the St Modwen agenda on their behalf.
Farnborough once had a viable town centre, that is until in collusion with the Rotten Borough of Rushmoor, St Modwen trashed the town centre. At Upton Park, in collusion with the local mayor, St Modwen wish to destroy the century-old Queen's Market. At Walthamstow, St Modwen wish to destroy a Victorian street, along with the many independent traders who trade there. At Bognor Regis on the South Coast, St Modwen wish to destroy the seafront ...
Not surprising then that St Modwen are strongly opposed by local communities wherever they operate.
In Birmingham,St Modwen are at loggerheads with the city council over the Longbridge site, former home of MG Rover.
Even before the credit crunch started to bite and the UK moved into recession, the business model being pushed by St Modwen, retail cum leisure cum yuppie flats was not viable. It was about making a fast buck and had nothing to do with town centre regeneration. The fast buck is no longer there to be made and probably never was.
Driving out local businesses, to be replaced by High Street retail chains that drain money out of the local economy, is not regeneration, nor is it sustainable development.
For many the question was how were local councils so easily conned. The next question is will they be conned all over again as St Modwen offers their special skills?
Special thanks to Fight the Height for digging up the latest dirt on St Modwen.
Further information and background
Anna Blackaby, St Modwen warns its results will be hit by property slump, Birmingham Post, 1 October 2008
Edward Chadwick, St Modwen and Birmingham City Council at stalemate over Longbridge homes, Birmingham Post, 22 October 2008
Keith Parkins, Curitiba Designing a sustainable city, April 2006
Keith Parkins, Collapse of town centre regeneration schemes, Indymedia UK, 14 July 2008
Keith Parkins, St Modwen financial crisis, Indymedia UK, 17 July 2008
Keith Parkins, Town centre regeneration schemes, Indymedia UK, 18 July 2008
Keith Parkins, Transitions towns, Indymedia UK, 9 October 2008
Keith Parkins, Beyond sustainability, to be published
Keith Parkins, Sustainable living, to be published
Toby Shelley and Stanley Pignal, St Modwen puts a brave face on gloomy prospects, FT, 1 October 2008
St Modwen meltdown
f:\St Modwen Shares