Helical Bar has returned to profit in its half-year results which, analysts said, “showed momentum is building and plans are coming together”.
The firm’s full-year results six months ago declared it had a clean slate and wouldn’t have to take in any more write-downs. Today it delivered a pretax profit of £4.1m, up from a loss of £3.2m in its 2010 half-year results.
The listed company’s net asset value per share was up by 1p to 254p after its property portfolio rose in value by 0.9% on a like-for-like basis over the period to the end of September. It booked development profits of £1.8m compared with a loss of £9.2m.
Helical continued to rebalance its portfolio and said the balance within its assets is now close to its target of 75% investment and 25% development stock.
Analysts at JP Morgan Cazenove said: “This has moved from closer to 50/50 a few years ago, which saw Helical in hot water.”
JP Morgan added that the results were in line with expectations but “more importantly, showed momentum is building and plans are coming together: no more write-downs, development gains coming in sight, attractive acquisitions and a good financing position”.
Helical Bar has made £85.4m of acquisitions recently, including the £73.6m purchase of land and buildings in Corby town centre after the end of the period.
It made disposals of £67.2m, with further sales of around £80m expected by March.
Its ratio of net borrowings to property portfolio was down by 2% to 43%, and it is sitting on cash and unused facilities of more than £50m.
It reported progress at its major mixed-use scheme including its White City site, where an application for a 1.5m sq ft residential-led mixed-used scheme will be submitted in the second quarter of next year.
It has let 25% of 200 Aldersgate, EC1 with a further 5.4% under offer, and intends to apply for planning for its Barts Square in Farringdon, which is generating a 6% initial yield, in early 2012;
At Fulham Wharf, SW6 it continues to work with Sainsbury’s on assessing bids for the site, with planning for a 100,000 sq ft supermarket and 463 homes.
Chief executive Mike Slade said: “The next two years will be tough for the market as the impact of macro-economic factors affect rental flows, covenant strengths and valuation yields.
“However, we have already undertaken significant activity to re-base our portfolio over the past few years and we are now in good shape to benefit from growing income surpluses. Our next objective is to monetise our large development programme.
“Finally, we have the courage, skills and resources to take advantage of the buying opportunities that will arise in these straitened times.”
bridget.oconnell@estatesgazette.com
