Develop North PLC interim results report increase in revenue during challenging economy

26 Jul 2023

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 an increase in revenue in its interim results for six months ending 31st May 2023.

Announcing its interim trading update for six months ending 31st May 2023, the London Stock Exchange listed investment company has reported an increase in revenue to £946,000 with a marginal profit of £5,000, which was down on the same period last year due to the effect of higher interest rates and updated impairment provision.

Despite challenging economic conditions, the company maintained its dividend strategy and made a dividend payment of 2p per share during the six-month period. As a result, the Net Asset Value (NAV) per share after dividends were paid, decreased from 81.79p to 79.81 resulting in a flat total NAV return for the period.

The total value of Develop North’s portfolio now stands at £23.7m from 17 projects across the North of England and Scotland.  Recent loan facilities include a £1.65m funding package to support the development of a bespoke housing scheme in Aberdeenshire.

Also, during this financial period, Develop North renewed its committed revolving credit facility with Shawbrook Bank.

John Newlands, chairman of Develop North, said: “The company entered its seventh year of trading during the reporting period, which has included continuing turmoil on the world stage, steep levels of UK inflation that governmental measures have thus far struggled to moderate and further increases in interest rates.

“However, the UK economy and the real estate sector in particular appear well placed to benefit as the effects of COVID disappear, energy prices begin to fall, and inflation rates approach their peaks.

“While project finance costs in the main remain high, it is helpful in this regard that there was no shortage of high-quality potential borrowers approaching us for loans and who are prepared to agree terms and interest rates appropriate to the prevailing markets conditions.”

Brendan O’Grady, Fund Manager at Tier One, the investment adviser to Develop North, said: “The quality of the loan portfolio reflects the growing standing of Develop North as a credible alternative lending resource for developers bringing forward important property schemes including new homes and commercial buildings.

“We’re also pleased to renew the agreement with Shawbrook Bank, which has maintained headroom and liquidity.  Its renewal for the fifth year demonstrates the support Develop North has from its lender and the growing confidence in future deployment, given the strength of the pipeline during this current financial year.”


Share this article: