THE company behind Dursley’s largest future expansion has said it is performing well despite a slight dip in profits.

St Modwen, which is the main developer behind plans to build 600 homes at Littlecombe in partnership with Stroud District Council, has announced an eight per cent drop in profits before tax for the first half of its financial year.

The company reported profit before tax for the six months up to May 31 at £34.9 million, compared to the £37.9 million reported for the same period last year.

However, the developer, which has a portfolio worth £1.1 billion, boasted a 48 per cent increase in property profits to £16.6 million driven by increasing housing sales, and a 10 per cent increase in share dividends to £1.21 per share.

Bill Oliver, chief executive of St Modwen, said: "Our year has started very well, despite the ongoing challenges posed by the wider economy, enabling us to deliver a strong set of first half results.

"We have secured significant opportunities in London and we are confident that this progress, together with strong momentum on our house-building sites, will deliver additional property profits to boost our results for 2012 and future years."

The company confirmed it had several residential and commercial schemes in the South West, including Littlecombe in Dursley, which were progressing well.

Last month St Modwen submitted a planning application to Stroud District Council for a further 92 homes on Littlecombe.

Since obtaining outline planning consent in July 2008 the Littlbecombe site has been plagued with problems, mostly driven by the country’s recession.

In four years just 74 homes have been built on the site, as well as 16 industrial units and the new Vale Community Hospital.

In March the district council and St Modwen confirmed that they were looking again at Littlecombe and were considering making changes to the original masterplan for the 92-acre site because it was no longer financially viable.