Annual profits fall at commercial property firm and Sci-Tech Daresbury operator Langtree but chairman hails ‘strong set of results’ amid ‘challenging market’. Tony McDonough reports

Commercial property firm Langtree is reporting a fall in pre-tax profits for the 12 months to March 31, 2023.

However, chairman Tim Johnston said the Warrington firm, which is the operator of Liverpool city region’s science and innovation campus, Sci-Tech Daresbury, had delivered a “strong set of results” amid “challenging market”.

Langtree’s results have been posted on Companies House in the past few days. They show a sharp fall in pre-tax profits to £251,000 against £5.26m last year. However, this is mainly down to a fall in property values rather than a trading loss.

This means majority shareholder and chief executive John Downes will enjoy a much-reduced dividends windfall this year. Langtree has paid total dividends of £100,000 this year against £447,000 in the previous year.

In the previous year’s annual report Mr Johnston had warned of a downturn in economic activity which could feed through to a softening of property values. In the latest report he writes: “That turned out to be the case.

“Unfortunately the anticipated downturn was further exacerbated by the political upheavals which impacted on the financial markets and also had a wider effect on the economy by adversely affecting business decision-making.

“Despite this our business fared well in the year. There was a reported general downturn in property values of around 15%. But given the quality and performance of our portfolio we experienced only a modest 3% (1.08m) decrease in values overall.”

He added there was an increase in profit pre-valuation movements of 73% to £1.3m (£750,000, 21/22) and an increase in estimated rental value of £2m to £30m for assets owned or under management. Rental receipts went up to £24m from £23m last year.

However, Mr Johnston says he is not expecting stability to return to the markets before the next General Election which is expected to take place in the second half of 2024.

“Given the headwinds out there, this is a very strong set of results,” he added.

Mr Johnston also reported that the company continues to bring forward developments across its joint ventures and asset base, despite current market conditions. Projects coming forward include:

• A planning application for a 1.6m square foot second phase of the giant Parkside logistics and advanced manufacturing development in St Helens – a key component of the new Liverpool Freeport.
• A further phase of the campus at Sci-Tech Daresbury in Halton, with tenders out to build a speculative 40,000 square foot laboratory and 20,000 square foot office building.
• Development of 190,000 square feet of industrial units at Hollinwood Junction in Oldham.
• Refurbishment and redevelopment of the 80,000 square foot St James Business Centre in Warrington into the new Warrington Digital Hub.

Langtree now has almost 3m sq ft property under ownership or management with an 89% average occupancy. It is also reporting a “modest” increase in net asset value to £16.8m from £16.4m in the previous year.

“It’s been a busy and challenging year, but one we anticipated,” said John Downes. “There are many things that contribute to allowing a business like ours to continue forward, chief among them being the quality of our team, and the commitment of our partners and clients.”

Mr Downes pointed to the confirmation that Sci-Tech Daresbury was announced as one of the government’s new Investment Zones as helping aid its continued development.

READ MORE: Developer wins appeal on £15m Liverpool hotel project

He added: “Part of our goal is regeneration and job creation, and Sci-Tech Daresbury continues to deliver on both fronts.

“It is an excellent partnership between Langtree, UKRI and Halton Council which has so far created more than 1,000 new jobs. The campus continues to go from strength to strength.”

The report also revealed Langtree employed 39 people during the 12-month period. Directors’ remuneration, including salaries and pension payments, totalled £228,496. Its highest paid director received £147,921.