While announcing an interim pre-tax profit increase of 182% to £11.6m, Regalian’s managing director, David Goldstone, attempted to allay fears about his company’s ability to withstand the predicted downturn in the housing — especially Docklands housing — market.
“We have the capability to withstand the implications,” he said. Regalian is showing a 40% profit on turnover, and Mr Goldstone said this could go to 20% without adverse effect.
Of his exposure to Docklands, he says that all his developments are in Wapping, and in any case represent only 4% of the total being built in the LDDC area.
“I find it mildly obscene that there should be speculation on housing,” he said, emphasising his statement that Regalian does not release units more than three months from completion and is less likely to be hit if the property speculators run into trouble.
He also adds that, since “Black Monday”, his company has sold £6m worth of flats at Vauxhall, in Westminster and in Manchester.
In the six months to September 30 the company’s turnover was £28.4m (£14.9m). A considerable proportion of the £11.6m profit on this is thought to be derived from the first, £20m, tranche of the ultimate £74m that is being paid by the Pearson Group for Horseshoe Court on Southwark Bridge, which is to be the Financial Times’ new home. Brokers had forecast interim profits of around £4m before the deal was announced implying that it contributed £7.6m. Total profits from the deal have also been put at around £35m.
Earnings per share were 8.65p (5.37p). A dividend of 1p per share has been announced.
Regalian has arranged an £80m multi-option facility with Barclays Bank to provide development finance for the foreseeable future.
