Slough Estates announced today that a one-off cost of £125.6m to carry out debt refinancing has led to a 31.5% fall in pre-tax profits.
In its interim results, the company announced that pre-tax profit for the half year to 30 June 2005 fell to £119.0m (H1 2004: £173.6m).
This was mainly due to Slough exchanging £322m of high coupon debt for long dated new debt in June.
Slough said the debt refinancing will lead to future savings of £11m pa and that its adjusted pre-tax profit – excluding exceptional losses – actually rose by 36.9% to £90.6m (H1 2004: £66.2m).
Chief executive Ian Coull said: “While the consequence of the corporate activity undertaken over the last 12 months has been to reduce core earnings this year, we are confident that our acquisition and development programme will bring growth from 2006 onwards.”
He added that while the company has let an “impressive volume” of space, “the overall occupancy remains broadly unchanged as a result of space returned to us”.
He said: “There is continuing evidence that occupier demand is improving in the business space markets we are serving.
The company also said that the diluted NAV per share rose 2.4% to 472p compared to six months ago (31 December 2004: 461) and that its valuation of the investment portfolio rose 3.6% to £4.2bn.
Slough’s interim dividend increased 5.7% to 6.5p.
On Friday, Slough announced that Paul Orchard-Lisle has taken over as chairman after Sir Nigel Mobbs’ illness was discovered to be worse than expected.
Orchard-Lisle became interim chairman on 1st August.
References: EGi News 25/08/05
