LONDON (Alliance News) - Highcroft Investments PLC Friday reported an increase in profit and net asset value in the first half, following strong valuation gains.
The real estate investment trust posted pretax profit GBP4.4 million for the six months ended June 30, up from GBP1.6 million a year earlier, after a valuation gain of GBP2.4 million compared with GBP15,000 a year earlier.
Total earnings per share more than doubled to 85.7 pence from 32.0 pence. The increase resulted from growth in net rental income coupled with an realised gains on investment property of GBP736,000 and a net valuation gain on investment property of GBP2.4 million.
Gross rental income rose 18% to GBP1.5 million, from GBP1.3 million a year earlier. Highcroft attributed this to rental income from its Bicester and Cardiff properties - purchased in the second half of 2013.
In turn, Highcroft said its net asset value per share rose to 886 pence, from 821 pence in December and 770 pence in June 2013.
The company said property expenses continued to remain low as there were only a small number of lease events in progress.
At an operating level, Highcroft sold its multi-let office building in Bristol for a gain of GBP742,000 on the year-end valuation and one vacant residential unit for a loss of GBP4,000 on the year-end valuation.
In addition, the group completed the purchase of a freehold retail warehouse in Aldershot, currently let to Buildspan Ltd for GBP3.3 million.
Financially, the company said its cash position improved to GBP5.9 million from GBP4.6 million, partly due to property sales.
Looking ahead, Highcroft said as a consequence of its post-period end property transactions it expects to report an increase in gross rental income in the second half.
"Profits on capital activities are likely to moderate in the second half of the year, as the growth in commercial property valuations is unlikely to continue at the same rate as witnessed in the first six months of the year," Chairman John Hewitt said in a statement.
"Given our financial strength (cash, liquid equity holdings and low gearing levels) we hope this will provide further opportunity for us to continue to improve the quality, lease profile and yield of our property portfolio," he added.
On the back of its performance the company increased its interim dividend to 13.25 pence from 12.50 pence.
The stock was untraded Friday morning at 800.00 pence.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
Copyright 2014 Alliance News Limited. All Rights Reserved.