Develop North PLC (Develop North), managed by Newcastle-upon-Tyne-based wealth management and fund management specialists, Tier One Capital Ltd (Tier One), has reported a positive Net Asset Value (NAV) return from its investment fund portfolio in its latest interim results.
Announcing its interim trading update for six months ending 31st May 2024, the London Stock Exchange listed investment company has reported an increase in revenue to £0.953m with a profit of £0.605m.
Despite challenging economic conditions, the company maintained its dividend strategy and made dividend payments totaling 2p per share during the six-month period. As a result, the NAV per share after dividends were paid increased from 78.9p to 79.6p resulting in a NAV total return for the period of 3.35%.
The total value of Develop North’s portfolio now stands at £20.2m from 17 projects across the North of England and Scotland, with 73.9% located in North East England. Recent loan facilities include a £0.6m, six-month facility to fund the acquisition of land with planning permission for roadside retail units in Sunderland.
Since inception in 2017, Develop North has helped create over 3,000 jobs and supported 36 developments with Gross Development Value (GDV) of more than £195m. To date it has loaned over £74 million to help fund commercial and residential property schemes in North East England and Scotland.
John Newlands, chairman of Develop North, said: “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. Other positive indicators are an increase in real disposable household income of around 1%, following cuts in National Insurance Contributions, falling energy prices and the fall in inflation. These factors should all bode well for the broader property sector, while a nationwide shortage of housing is likely to maintain upward pressure on prices, especially should mortgage rates begin to fall.
“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. Hikes in both government borrowing and indirect taxation seem likely, though their effects would take a considerable time to work through, giving plenty of time to react if necessary.”
Brendan O’Grady, fund manager at Tier One, the investment adviser to Develop North, said: “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.
“There are real opportunities for development in the North East and we are seeing improvements in economic conditions, which will hopefully include falling interest rates next year that will bolster demand for properties along with the desire from the new government to enhance house building, opening new opportunities for developers.”
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