For years, St Modwen Properties delivered a solid performance. The company’s bottom line has been in the black since the great financial crisis, including a record £258.4m profit in 2015, and at the end of last year its share price hit a post-GFC high of 510p.
Now, the world, the markets and St Modwen look very different. Over the first half of its current financial year, the company lost £134.5m, more than it lost in all of 2009. Its stock has lost more than a third of its value so far this year, and just last week hit an almost-four year low.
Time for some fresh thinking during the Covid-19 crisis? The company’s choice for its next chief executive suggests so. Historically run by seasoned property professionals, the company has now reached outside of real estate to bring in a new perspective – that of Sarwjit Sambhi, a former management consultant who has spent the past two decades at energy group Centrica.
Sambhi will be the permanent successor to Mark Allan, who arrived at St Modwen in 2006 from student accommodation company Unite and left it earlier this year for Landsec. Allan’s predecessor, Bill Oliver, was a real estate man too, and was promoted to the CEO post in 2004, before which he had been the company’s chief financial officer.
Danuta Gray, St Modwen’s chair, says the company had no preconceived views of who the new chief executive should be or where they should come from, although she acknowledges that in coming from outside of real estate, Sambhi will likely inject some new thinking.
“We undertook a thorough process which included candidates both within and outside the sector, with no fixed expectation,” Gray told EG. “Our view is that talented people who have proven leadership and strategic capabilities do not stop at an arbitrary sector barrier and, for what we needed in a CEO, Sarwjit was the best person for the job. He will bring his own fresh ideas to the role driven by his own experiences and we are all very much looking forward to benefiting from these as we progress St Modwen’s strategy.”
After six years with Booz Allen & Hamilton, Sambhi joined Centrica as corporate development director in 2001, and worked in various roles in the group until this year.
During that time he was chief financial officer for AA, which was owned by Centrica during the early 2000s, and ultimately chief executive for Centrica Consumer.
Announcing the company’s half-year results, interim chief executive Rob Hudson said structural drivers in St Modwen’s markets of industrial and residential “remain positive and arguably have strengthened even further”. That kind of optimistic outlook is par for the course from a company boss guiding a business through a crisis. But as he takes over at the top next month, Sambhi will need to show employees, customers and shareholders alike that he can get to grips with a new industry and deliver on that potential.
Driving diversity
Sambhi has prioritised diversity and inclusion during his career, saying in a video for Centrica last year: “A really good friend of mine said diversity is being asked to the party, but inclusion is about being asked to dance.”
He added that growing up as a British Asian in Leeds during the 1970s and 1980s was hard. “It was hard because I had friends whose parents wouldn’t allow me into their house because of my colour. I’d have a commute to school where people spat on me because of my colour. And that really stuck with me and made me passionate about diversity and inclusion, because, for me, everybody needs a voice.”
Sambhi recalled last year’s Centrica annual general meeting in which a customer and shareholder asked about diversity on the company’s board: “If you as a company are not diverse and don’t reflect society, then how can you actually serve or meet the needs of your customers?”
“She got it bang on,” Sambhi added. Now he has a chance to make sure real estate gets it bang on as well.
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