Property developer, Terrace Hill, plans to use its portfolio of residential investment properties to seed a closed-ended residential investment fund with Aegon Asset Management.- that would boost recurring management income.
The group reported a modest profit, aided by a 1.8 per cent increase in the value of its residential holdings to £269m. The majority of these are held in a joint venture company in which Terrace Hill has a 49 per cent stake. Indeed, residential occupancy has improved to nearly 94 per cent in the period, well above the portfolio's long-term average, and chief executive Philip Leech reports "positive feedback" from institutional investors to the fund proposal.
Basic net asset value was only marginally higher than the full year's 36.9p figure - reflecting a high exposure to development property, rather than income producing investments. However, management is concentrating its development energy on the supermarkets sector and a further 3p can be added to NAV in respect of the committed foodstore development programme. What's more, since the year-end, the group has refinanced a further £53m of its debt and has reduced indebtedness by selling £20.5m-worth of properties.
| TERRACE HILL (THG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 18p | MARKET VALUE: | £38.2m | |
| TOUCH: | 18-19p | 12-MONTH HIGH: | 26p | LOW: 14p |
| DIVIDEND YIELD: | nil | TRADING STOCK: | na | |
| INVEST PROPERTIES: | £31.9m | NET DEBT: | 114% | |
| DISCOUNT TO NAV: | 51% | |||
| Half-year to 30 Apr | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 35.7 | -30.3 | -12.1 | nil |
| 2010 | 37.0 | 0.66 | 0.10 | nil |
| % change | +4 | - | - | - |
Ex-div: - Payment: - | ||||
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