Emerson is the envy of other developers, says Jones

16th Nov 2011 North West

Privately-owned property developer Emerson Group is in an "enviable position" according to its chairman, despite a slight fall in annual turnover and profits.

Peter Emerson Jones, who founded the company more than 50 years ago, said the tough economy has ensured another "demanding" year, but added that the business remains well placed to grow thanks to its strong balance sheet.

Alderley Edge-headquartered Emerson, the parent company of Orbit Developments, Jones Homes and various other construction-related and overseas investment-led vehicles, reported a turnover of £157.3m for the year to 30 April 2011, down from £158m the previous year.

The reduced turnover was primarily down to a lower volume of houses completed, down from 304 in 2010 to 258, at an average price of £231,000. The drop contributed to the division's sales falling from £67.4m to £62.2m.

Overall group pre-tax profit also dipped in the past 12 months, down from £24.8m to £17.3m. The loss on foreign currency exchange was £5.5m, of which £3.3m related to Yen debt repaid during the year.

"I am surprised that the Yen has continued to appreciate despite the tsunami and subsequent problems in Japan and one can only assume that the currency is being used as a safe haven in uncertain times in the same way as the Swiss Franc," said Jones.

Emerson said its commercial property valuations have remained constant, with the retail sector showing a strong yields arid valuation. However, the number of voids in the office sector has grown although the company said it is continuing to "actively pursue" acquisition opportunities.

During the year, it bought the 60,700 sq ft Grosvenor House office complex in Redhill, and completed remodelling works at Park Square in Cheadle. The group also welcomed the continued development of MediaCity for helping to drive footfall at the Lowry Outlet Mall in Salford Quays.

In the US, Emerson has entered into a joint venture with Centerline Homes to build a residential scheme in Orlando, Florida, while it has also bought a 170-acre site in the state called Turtle Creek which has planning permission for 368 residential units.

Jones, who was named Insider's North West Property Personality of the Year in 2009, said: "We have experienced a time of considerable change since the Lehman Brothers crash in 2008 and the financial forecast for the foreseeable future remains uncertain particularly over the two years.

"We must therefore examine and monitor our future policies to adapt to the further changes which will inevitably take place and influence the decisions we make today for the future. I consider that we have an adequate infrastructure of staff in most areas but we must remain vigilant regarding our future direction and policies.

"With a strong balance attest and cash reserves together with the support of our professional advisers and bankers, I feel we are in an enviable position to take the group forward and benefit from opportunities which I am sure will arise."

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