LONDON (Alliance News) - Palace Capital PLC said Tuesday its pretax profit more than halved in its recently ended financial year, as the property investor's portfolio made a loss on revaluation adjustments.
For the year to the end of March, Palace Capital reported a pretax profit of GBP6.4 million, down sharply from GBP13.3 million the year before, due to a loss of GBP382,000 on the revaluation of its investment property portfolio, compared to a gain of GBP5.7 million the prior year.
Net asset value as at March 31 dropped to 407 pence, down from 415p the same date the year before.
However, rental income climbed to GBP18.8 million from GBP16.7 million, driven by an improved property portfolio.
As at March 31, Palace Capital's property portfolio stood at GBP286.3 million, up from GBP276.7 million the year before, following the acquisition of One Derby Square in Liverpool in December.
Palace Capital declared a final dividend of 4.75 pence per share, bringing the total payout to 19.0p, in line with the year before.
Looking ahead, the company has retained its view on the current UK property market, seeing the industrial sector as the leading performer, followed by strong occupational demand in regional offices and continued weakness in retail and leisure.
Palace Capital will focus on letting vacant space, in order to increase its cashflow and reduce holding costs. In addition, Palace Capital is seeking a conversion of the company into a real estate investment trust, and expects the process to be completed in August.
"Our portfolio structure and proactive approach to asset management has enabled us to continue to grow both income and capital values, building further on our strong track record. We are well positioned to take advantage of investment opportunities, but remain disciplined in this regard as we believe that pricing in the market at the moment does not provide sustainable value and, therefore, doesn't meet our strict criteria," said Chief Executive Neil Sinclair.
Shares in Palace Capital were down 1.3% at 269.60 pence on Tuesday.
Palace Capital (PCA)