Heron Corporation, the private company headed by Gerald Ronson, saw pre-tax profits climb 11% to £61.2m (£55.2m). This was despite profit falls in two of its three main divisions — property and commerce. The financial services operation clocked in with a £21.6m (£200,000) contribution. Property generated £39m of profits, compared with £49.6m the previous year, when the figure was swollen by a one-off contribution from the Spanish Rumasa portfolio. Trading during the period included the sale of 1-1a Wimpole Street, W1, to Schroder International Property Fund for £40m and a site in Southwark Bridge Road for over £22m.
Heron’s total rental income rose slightly to £19.6m (£19.4m). The group’s £277m UK investment portfolio produces the bulk of this, £14.3m net. In the last 12 months, Heron paid £71.6m for seven investment properties, including an industrial estate, and Crown House, 145 City Road, EC1. The net surplus from the sale of investment properties, £45.7m, was taken below the line. The group also disposed of its insurance business, National Insurance & Guarantee Corporation, car distributor Lancar and its video concern, Heron Relay. But the sale of its loss-making US savings and loans company, Pima, was suspended in January. According to Ronson, he expects Pima to return to profitability.
The net book value of Heron’s properties has jumped to £593.9m (£402.4m). Its European holdings have expanded substantially, to £200m at the year-end. Since then, Heron has bought out its Spanish partner Banesto’s 40% interest in 3,150 properties. This makes Heron one of the largest property developers operating in the Spanish market, with a portfolio valued at over £250m. The company plans to spend a further £300m in Europe prior to 1992.
