Gresham House posts group operating loss
By BFN News | 08:02 AM | Friday 27 April, 2012
Property and early-stage investment trust Gresham House posts a total group operating loss of £2.5m for the year to the end of December against a profit of £1.4m las time.
The revenue loss after taxation decreased from £701,000 to £361,000 and trading profits on the sale of development properties in 2011 were £795,000 reflecting the realised gain on its 75% joint venture interest in the development of the headquarters for Hallin Marine in Aberdeen.
Chairman Tony Ebel said: "Significant cost reductions have been made, principally administration overheads which decreased by 25% from £1,221,000 in 2010 to £913,000 in 2011 and the reduction in finance costs from £1,039,000 in 2010 to £695,000 in 2011 primarily due to the calculation of the fair value of interest rate swaps falling by £237,000 as at year end.
"Against these positive reductions in costs was a fall in rental income from £1,435,000 in 2010 to £1,036,000 in 2011.
"This was primarily due to the reduced rent at Newton-le-Willows where vacant possession is progressively being obtained by 2013 for the whole site following the grant of planning for residential, and at Vincent Lane, Dorking where the site is being cleared for sale."
As a result of the revaluation carried out at the end of 2011 the value of the property investment portfolio was reduced by £1,804,000 to £27,443,000.
The principal reduction amounting to £1,237,000 was in respect of the residential site at Newton-le-Willows where residential values have been underperforming due to the lack of demand in the North which has, in turn, led to a lack of construction activity on new sites.
This revaluation deficit, when combined with the revenue loss of £361,000 and the losses within the securities portfolio of £203,000, resulted in the net asset value per share falling from 476.9p to 447.0p.
At 8:02am: (LON:GHE) Gresham House share price was 0p at 330p
Story provided by StockMarketWire.com