Newcastle property company Adderstone Group has seen its turnover more than halve after switching to investment and making no development sales in a year.
The firm said that group turnover decreased from £45.1m to £20.7m in the year ended March 2020, as the firm switched its business focus to investment, while pre-tax profits also decreased, from £5.9m to £3.7m.
Directors said they were satisfied with the results, and highlighted how the group had declared an increase in net assets of £4.9m.
It increased its asset base by £12.1m, both through re-development and direct acquisitions, including the B&M store at Toll Bar Road in Sunderland and the freehold to M&S and B&M at Broadgates, Hexham.
Throughout the period, works continued on three commercial development projects in the North East, including Baker’s Yard, a 90,000 sq ft industrial and office scheme on the site of the original Greggs Bakery in Gosforth, and Pipewell Quay, a 30,000 sq ft office scheme on the site of the former Baja Beach Club in Gateshead which will become the home of Aspire Technology Solutions.
Tyne Bridge House, a 5,200 sqft office scheme with roof terrace on the edge of the Gateshead side of the Tyne Bridge is also moving ahead.
It also completed another development in London, Plantain Place, located next to The Shard, securing tenants such as Comptoir Group, Kapranos PR and FOMO Studios.
In terms of residential developments, accounts show work in progress on Hanover Point, a 10-luxury apartment scheme overlooking Newcastle’s Quayside, which is due to complete in Autumn 2021, including sale of the penthouse at £945,000. Work also started on a unique eco housing project, Meadowcroft, Cambridge.
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Meanwhile, The Driving Standards Agency quit Eastgate House in November 2019, paving the way for further progress of the 1,390 bed student campus at Manors in Newcastle, which Adderstone Group is delivering in conjunction with partner, iQ Student Accommodation.
Post year end, the group launched a dedicated social housing division, Adderstone Living which has delivered 34 units to date and has a pipeline to deliver 200 more homes over the next 24 months.
The firm unveiled the group’s consolidated figures after publishing accounts for Adderstone 1993 Limited, the set of accounts which forms part of the group of businesses trading and investing as Adderstone Group.
Pre-tax profits fell from £2.98m to £1.31m, while turnover fell sharply, from £28.6m to £2.95m, reflecting the fact that the firm’s current pipeline is in the early stage of development.
The accounts added: “As projected in the 2019 strategic report, the material reduction in turnover and profitability of Adderstone 1993 Ltd and its subsidiaries in the year, is as a result of the current pipeline of early-stage developments and current focus by the wider group on building a commercial property investment portfolio both through direct acquisition and development to hold.
“In the year, a number of the subsidiaries continued to push new developments through planning and preconstruction phases.
“Adderstone 1993 Ltd and its subsidiaries are progressing through planning and pre-construction phases for various developments in the North East of England, London and Manchester.”
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Group chief financial officer Michael Shipley added: “I’m extremely satisfied with these results and our continued progress.
“The arrival of Covid-19 in the final quarter of the year inevitably stalled our momentum but I’m pleased to report that, with support from our lenders, the group has proved its resilience throughout an extremely challenging period.”