Change of emphasis at Terrace Hill

The reasoning behind the decision reflect's management's view that capital can generate far higher returns through investing in commercial developments – principally the foodstore sector – rather than in residential investments, and the latter will be run down over the next 18 months.

So, while the previous year's loss of £3m was turned into a profit of £5.6m – before accounting for movements on developments and investment properties and contributions from joint ventures – the group reported a IFRS loss of £10.2m. This reflected a decision to change the basis of valuation on residential properties being sold from their vacant possession value to the discounted prices expected to be achieved on sales completion. As a result of this, group net asset value (NAV) fell 17 per cent to £48.1m and broker Oriel Securities downgraded its NAV forecast for 2012 from 43p a share to 28p a share.

Progress on the foodstore development programme has been impressive, though, with detailed planning consent secured on 194,000 sq ft of new floor space. Together with pre-planning discussions, this brings the total investment programme up to 652,000 sq ft, with a projected end value of £240m.