Workspace rides London growth

Workspace Group, which specialises in providing office space to start ups, says a focus on London has helped it ride out the recent Eurozone inspired storms.

In the 12 months to the end of March trading profit. which is essentially net rental income minus administration expenses and net finance costs, came in at £16m, broadly in line with the consensus forecast of £16.16m and up from £14.2m in the prior year.

Profit before tax dropped from £52.8m in 2011 to £48.5m this year while the crucial net asset value per share rose 8% to £3.08 from £2.86 a year ago.

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Group net rental income was £45m, an underlying increase of 4%. Net bank debt was reduced by £53m in the year to £314m at March 2012, which includes £24m of cash on deposit.

Workspace's property valuation at the end of March was £760m, up 5% on the previous year while like-for-like occupancy improved to 87.8% from 86.1% in March 2011.

The total yield on the portfolio was 7.1% against 6.8% in the prior year.

Commenting, Jamie Hopkins, Chief Executive of Workspace said: "Despite a tough and changeable environment throughout the year, our strategy of focusing on London continued to be effective in growing core operational income as well as the capital value of our assets. Our business benefits from the momentum generated by the new and growing companies that are at the heart of the London economy."

A final dividend of 5.86p has been proposed, up from 5.33p (restated) in the previous year. The full year dividend is 8.79p, a bit below the 9.06p investment analysts had predicted.

Workspace shares were up 0.45% at 10:11.

BS