London-centric Helical Bar returns to profit

Not only did property development and investment firm Helical Bar swing back into the black in the year ended March 31st, it recorded profits well ahead of analysts' forecasts, helped by its increased London activities.

Pre-tax profit totalled £7.4m, ahead of expectations of £6.4m and compared with a loss of £6.3m the year before.

During the year, Helical Bar sold £50m of investment assets and £26m of development sites, recovered £16m of cash through the sale of 50% of its retail development at Gliwice in Poland and re-cycled these proceeds in over £100m of investment assets. This helped its share of net rental income jump by 29% from £17.8m to £22.9m.

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However, the firm said that the Eurozone crisis and its potential impact on the UK led to decreased valuations for a number of its development site which led to a write-down of £4.5m, still well under the £14.9m write-down the year before.

Net asset value per share slipped 1% to 250p, from 253p the year before. The full-year dividend per share was raised by 5% from 4.9p to 5.15p, better than consensus expectations of a 5p payout.

"We have performed strongly over the year and the continued efforts to address the imbalance in our business by increasing the company's weighting towards income producing properties has been vindicated by Helical's return to profitability," said Chief Executive Michael Slade.

He said that the group is increasingly redirecting its hard-earned equity to London and the South-East markets, currently representing 47% of the portfolio.

"The next few years are all about Central London and happily that is where we hold our most exciting assets. The prospects for substantial profits in respect of our London and retail developments provide cause for optimism for the future performance of the company."

Given the £130m of new bank facilities agreed during the year, the average maturity of its debt is now 2.7 years, up from 2.1 years in 2011, at an average cost of debt of 4.1%, down from 4.35%.

BC