Terrace Hill returned to profitability in the 11 months to end-September, mainly because there was no repeat of the writedown in property values seen the previous year.
Sensibly, the group has focused on its core strength in commercial property development and demand for its edge-of-town development sites from foodstore chains has remained high - it has five sites at various stages of development. Projects completed in the second half included a 97,000sq ft supermarket development in Bishop Auckland and a 135,000 sq ft Sainsbury store in Manchester.
On the residential investment side, around half of the portfolio is concentrated in London and the south east, where demand for rented property has continued to grow - so much so that occupancy rates rose to 94 per cent, well above the portfolio's long-term average. Less encouraging has been the joint venture with Aegon Asset Management for a closed-end residential fund. The uncertain economic backdrop has meant a slow response to fund raising there, although a successful first closing is expected in the next 12 months.
Oriel Securities is forecasting adjusted net asset value (NAV) of 50p a share for 2011 (48p: 2010).
| TERRACE HILL (THG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 19.5p | MARKET VALUE: | £41m | |
| TOUCH: | 18.5-19.5p | 12-MONTH HIGH: | 23p | LOW: 15p |
| DIVIDEND YIELD: | nil | TRADING STOCK: | nil | |
| DISCOUNT TO NAV: | 51% | |||
| INVEST. PROPERTIES: | £31.4m | NET DEBT: | 108% | |
| Year to 31 Oct | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 57.0 | 25.8 | 13.0 | 1.40 |
| 2007 | 65.0 | 18.1 | 7.33 | 1.90 |
| 2008 | 49.0 | -31.6 | -12.9 | 1.34 |
| 2009 | 36.9 | -26.7 | -11.2 | 0.54 |
| 30 Sep | (p) | (£m) | (p) | (p) |
| 2010 | 39.7 | 8.38 | 2.64 | nil |
| % change | +8 | - | - | .- |
Ex-div:- Payment:- | ||||
