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In its half-year results, the company's Gross profit's rose by 23.8% from £23.5 million to £29.1m.
While profit before tax also increased by 26.6% to £21.1m (2015; £16.7m), revenue was down 8% to £133.7m. However, the company revealed this is expected due to the timing of forward development sales and £11.7m of non-repeating inventory sales of completed residential apartments in the first half of the previous year. Revenue is expected to be stronger in the second half of the year.
Strong profit growth was driven by student accommodation developments, with a pipeline of 31 developments worth £920m set to be delivered by 2020.
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Mark Watkin Jones, Chief Executive Officerm said: "We are very pleased to be reporting a strong set of half year results. The Group has seen good profit growth in the first half, driven by our student accommodation developments which are fundamental to the business.
"We are seeing increased institutional demand for good quality purpose built assets, and there are several new international funds that have entered the market recently, which highlights the continued attractiveness of the sector. Our forward sale model and student accommodation pipeline of 31 developments provides us with excellent visibility on earnings and cash flow.
"We are encouraged by the progress we have made in the Build to Rent sector and we are pleased that the Group has already secured an excellent site in London, with solid progress also being made on a number of other specific development projects. Our student accommodation management businesses Fresh Student Living has had an excellent first half and is contributing well to overall Group performance.
"The Group has made progress in developing the Five Nine Living business to provide similar letting and operational management services for the Build to Rent Sector. Like our student accommodation development business, accommodation management provides us with good future earnings visibility."
(LM)
