Develop North’s 2025 results: income up, NAV steady, and a big strategy shift for 2026
Develop North PLC has published its Annual Financial Report for the year to 30 November 2025. It was a year of steady progress on returns and income, coupled with some loan impairments and a clear strategic pivot that will define the next chapter. The headline: a NAV total return of 2.1% and the dividend maintained at 4 pence per share, with a 2026 expansion plan now live.
Key numbers from the Annual Report
| NAV per share | 77.48p (79.81p a year earlier) |
| NAV total return | 2.1% |
| Annualised dividend yield | 5.9% (4p per share paid or payable) |
| Income distributed | £1.0 million |
| Investment income | £2.22 million, up 14.6% |
| Portfolio value | £24.7 million across 16 projects |
| Weighted average LTV | 69.7% (71.2% last year) |
| Funds in North East England | 70.3% |
| New capital deployed | £9.5 million into nine projects |
| Cash | £226,000 |
| Debt drawn (Shawbrook) | £6.78 million of a £7 million facility |
| Earnings per share (total) | 1.66p (2024: 5.00p) |
Dividend maintained at 4p – what to know
The board stuck to its policy of 1p per share per quarter, delivering 4p for the financial year. Three interim dividends of 1p were paid, and a fourth interim dividend of 1p has been declared for payment on 10 April 2026 to shareholders on the register at close of business on 13 March 2026 (ex-dividend 12 March 2026). For income-focused holders, that’s a 5.9% annualised yield based on average NAV.
Loan book growth and a tighter LTV
The portfolio climbed to £24.7 million with weighted LTV of 69.7%, improving from 71.2%. That blend matters because lower LTV typically provides more cushion if values wobble. Geographically, the tilt to the North East is now pronounced at 70.3% of funds – a deliberate strategy given the region’s momentum in manufacturing, services and major infrastructure projects.
New lending highlights
- £2.40 million, 11-month facility for a roadside retail scheme in South Shields.
- £2.375 million, two-year facility to renovate a wedding venue in Co. Durham.
- £2.35 million, 18-month facility for seven industrial units near Northallerton.
- £1.236 million, 18-month facility to complete a boutique smart hotel in Edinburgh.
Three loans were fully repaid and there were seven partial redemptions totalling £5.4 million, taking total exits since inception to 26.
Income up, but impairments and finance costs bite
Investment income rose 14.6% to £2.22 million, helped by a weighted average interest rate of 9.8%. However, impairments were a drag: two projects could not meet all interest requirements and the total expected credit loss provision increased to £1.207 million (2024: £584,000). Five projects are currently impaired under IFRS 9 staging.
On the bottom line, total profit was £415,000 (2024: £1.262 million) as finance costs stepped up to £367,000 with higher borrowings and there were capital losses on fair value positions. Revenue per share slipped to 4.8p (2024: 5.0p), primarily due to impairments.
Gearing, liquidity and buybacks
The Shawbrook Bank revolving credit facility was increased to £7 million and extended to August 2026, with £6.78 million drawn at year end. Shawbrook has indicated support for renewing on expiry. No buybacks were made during the year (versus 1,256,024 in the prior year). Separately, the Investment Adviser notes that 1,256,207 shares have been purchased under the programme to date and are held in treasury.
2026 strategic pivot: broader mandate, new managers, bigger targets
Here’s the real plot twist. Shareholders approved a change of investment policy on 18 February 2026. The company will transition from a pure property-backed lending fund to a broader North East-focused investment strategy across three specialist sleeves:
- Homes or Houses Limited – residential real estate.
- Broadoak Asset Management Limited – commercial real estate.
- Tier One Capital FM Limited – real estate lending.
The targets: an average NAV total return of 10-11% per annum over the next seven years, including a 4% per annum capital uplift based on forecast average value increases, and a target dividend of 6-7% of NAV. These are targets only and depend on successful fundraising and higher leverage in some strategies than historically used.
A prospectus was published on 16 January 2026 and a fundraising is underway, expected to complete in April 2026. The policy’s formal allocation ranges will apply in full once NAV reaches £100 million.
New CEO, same regional focus
Post year end, Michelle Percy, FRICS, was appointed CEO on 26 January 2026. With deep regeneration and investment experience, particularly in the North East, her brief is to drive the enlarged strategy. Given Develop North’s existing regional footprint – 70.3% of funds now in the North East and a track record of supporting more than 43 projects with a combined GDV above £280 million – this looks like a joined-up move.
How the portfolio is positioned
| Segment | % of portfolio | LTV (Nov 2025) | Loan value |
|---|---|---|---|
| Residential | 58.2% | 79.1% | £14.50 million |
| Commercial | 40.9% | 56.4% | £10.21 million |
| Cash | 0.9% | – | £226,000 |
| General impairment | – | – | (£82,000) |
| Total / weighted average | 100.0% | 69.7% | £24.85 million |
Notably, the commercial slice has grown quickly, while residential still dominates. The step down in the overall LTV is a plus, though the residential LTV at 79.1% reminds us this is development and bridging territory, not core income property.
My take: the good, the bad, and what to watch
Positives
- Dividend maintained at 4p with a 5.9% yield – welcome consistency.
- Income growth of 14.6% and a reduced portfolio LTV to 69.7% signal better risk-adjusted positioning.
- Clear regional edge: 70.3% in the North East where activity and inward investment remain supportive.
- Strategic diversification with specialist managers could broaden returns and reduce concentration risk over time.
Negatives
- Impairments increased and two projects missed interest in full, pulling down EPS to 1.66p.
- Higher borrowing costs and more debt drawn reduced headroom; execution discipline will be crucial.
- NAV per share fell to 77.48p, and the NAV total return of 2.1% lags the company’s new, much higher targets.
What to watch next
- April 2026 fundraise outcome and the pace at which the new strategy is deployed.
- Renewal terms on the Shawbrook facility and any change in gearing policy.
- Impairment trends: movement in the £1.207 million ECL and progress on the five impaired projects.
- Dividend guidance under the new policy aiming for 6-7% of NAV (targets only).
Bottom line
This was a solid, if mixed, year: higher income and a maintained dividend set against impairment and financing headwinds. The real story is the 2026 strategic pivot and new CEO appointment. If the fundraising lands and the team executes across residential, commercial and lending, Develop North could move from steady to genuinely scalable – but remember the targets depend on capital raises and higher leverage. For investors who like regional specialism and are comfortable with development risk, this is one to keep on the watchlist as the expansion plan unfolds.
