22nd Oct 2014 08:26
LONDON (Alliance News) - Development Securities PLC Wednesday posted a decline in pretax profit for the half year to end-August, hit by exceptional costs, but expressed confidence in seeing "significant gains" in the second half of the year and beyond.
Development Securities maintained its interim dividend at 2.4 pence per share.
The property development and investment company posted a pretax profit of GBP7.4 million, down from GBP8.1 million a year before, despite seeing revenue jump up to GBP92.4 million from GBP32.5 million.
This was due to a big uptick in direct costs, GBP2.7 million in acquisition costs and a GBP7.9 million exceptional item relating to the termination of a cross currency interest rate swap. Development Securities noted that the unwinding of this swap generated a credit of GBP7.6 million in its other comprehensive income, this means the overall impact was broadly neutral to net asset value as at August 31.
Net asset value rose to GBP335.5 million from GBP320.3 million a year before, or to 269 pence per share from 262 pence.
Stripping out these exceptional costs, Development Securities posted a pretax profit of GBP18.0 million for the half year.
The company said that the increase in its underlying profitability and net assets was driven by the strong performance of its multi-project portfolio in Greater London and the South East. It saw development and trading gains of GBP18.2 million during the half year, compared to GBP13.3 million a year before.
Development Securities acquired Cathedral Group Holdings Ltd in May, and said this had added to its portfolio and capabilities in mixed-used regeneration projects in Greater London and the South East.
"Looking ahead, we are confident that the momentum we have established in our development and trading activity will deliver significant returns in the near to medium-term," said Chief Executive Michael Marx in a statement.
Shares in Development Securities are trading down 2.2% at 186.50 pence Wednesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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