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Urban Splash in talks to secure its future
Directors of the group behind the £100 million regeneration a landmark Bradford building are in talks with lenders about securing funding to ensure its future after suffering increased losses.
Urban Splash, which bought the historic Lister Mills complex at Manningham in 2000 from administrators Ernst and Young and has since transformed the once-derelict premises into 321 apartments over two mill buildings, suffered increased losses of £15.4 million in the year to March 31 2012, compared with £9.4 million the previous year.
This was despite turnover rising by 16 per cent from £29.1 million to £33.6 million.
The Manchester-baaed group, which established its Yorkshire base in Bradford, saw its debt grow by £8 million during the period to £242 million, according to accounts deposited with Companies House. The number of employees has fallen from 142 to 117, with deputy chief executive Nick Johnson leaving in October as part of a slimming down of the top team.
Tom Bloxham, chairman and co-founder, said the group had suffered another tough year and was operating in difficult economic conditions.
“The general economic malaise and downward pressure on valuations has had an impact on our commercial property portfolio, while the continued lack of availability of mortgage finance has acted as a barrier to potential homebuyers for our residential portfolio,” he said.
He said that, in spite of the difficulties being faced by the group, Urban Splash had invested £21.6 million in regeneration projects, won 14 awards and raised investment income by £1 million to nearly £14 million.
Mr Bloxham said talks were under way with banks and other funders to put Urban Splash on a sound footing. The group owes HSBC £90.6 million and has a £113.6 million syndicated loan facility repayable on demand after covenant breaches last March.
HSBC had continued to provide short-term loans while talks aimed at restructuring the group’s funding proceeded.
In the accounts Urban Splash directors state they have a “reasonable” expectation of restructuring the loans to enable the business to continue operating for the foreseeable future. Failure to do so would cast doubts on its ability to meet its liabilities and continue as a going concern.
Mr Bloxham said: “We are currently fully engaged with all our funders in negotiating new bank facilities for the medium term.
“We are fortunate to have funders who have been supportive of the group through the last three years and are hopeful that we can conclude our negotiations with them in the next few months, putting the group on a sound financial platform for the foreseeable future.
“During the harsh economic conditions I believe Urban Splash has maintained its reputation as one of the country’s leading regeneration companies.”