LONDON (Alliance News) - Gresham House PLC Wednesday said it swung to a small pretax profit in the first half of 2015 and completed the sale of a Merseyside property to Persimmon PLC for GBP7.3 million.
The specialist asset management group swung to a small GBP52,000 pretax profit in the first six months of 2015 from a GBP2.5 million pretax loss a year earlier, despite revenue falling to GBP482,000 from GBP669,000.
The company generates revenue from investment income and from rent on its properties. Rental income dropped to GBP329,000 from GBP475,000, whilst dividends and interest income fell to GBP143,000 from GBP155,000. Other income also dropped.
The small profit was the result of a GBP655,000 gain from the fair value movement of its investments, compared to a GBP1.7 million loss a year earlier after it recovered the value of its holding in fellow London-listed SpaceandPeople PLC.
At the end of June, the company's net asset value stood at 298.5 pence per share, representing a small rise from 298.0 pence at the end of December.
"We are (creating value) organically, plus we have a healthy pipeline of acquisitions which fit our criteria for illiquid asset management. The redeployment of capital as we realise value from the legacy assets we inherited in 2014 should result in an improved return on equity and hence shareholder value creation," said Chief Executive Anthony Dalwood.
In a separate statement Wednesday, Gresham House said it has completed the sale of the 25.8 acre site at Newton-le-Willows in Merseyside to major house-builder Persimmon. The total consideration for the sale of GBP7.3 million, and Gresham has received an initial deposit payment of GBP944,610.
The remaining balance of the deal will be paid by Persimmon over the next 42 months. Prior to the sale, the property was held on Gresham's balance sheet at a value of GBP6.8 million.
Using the initial deposit, Gresham said it has made a GBP428,000 payment toward its loan facility with the Co-op Bank. Following the payment, Gresham said the facility has been reset at GBP2.9 million.
In addition, Gresham House will be entitled to an overage payment in the event that Persimmon Homes Ltd achieves a selling price in excess of an agreed amount per square foot.
Gresham House retains a five acre site with retail planning permission contiguous to the site sold and will explore options for this site now the sale of the main residential site has been completed.
"The completion of this sale continues the realisation of the company's remaining legacy assets. We remain focused on developing Gresham House as a specialist asset manager of illiquid assets both organically and through acquisitions," said Chief Executive Tony Dalwood.
Gresham shares were up 0.5% to 313.0 pence per share on Wednesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Persimmon (PSN)
SpaceandPeople (SAL)
