The latest apprentice arrives at a challenging time for Sugar’s property empire
In his leading role in the recent BBC television series The Apprentice, Sir Alan Sugar is presented as the entrepreneur who is seeking a “trainee” to fill a slot in his £800m business empire at a salary of £100,000 pa.
It has made for good television whether or not he normally travels in a Rolls-Royce with an “AMS 1” numberplate.
The show has given Sir Alan a new public prominence.
Previously, he was probably best known for his Amstrad company and the PCW home computer and word processor he launched in the mid-1980s.
Far from being at the cutting edge of computer technology, this brainchild of Amstrad’s gifted technical man of the time used an obsolescent operating system, non-standard floppy disks and some rather idiosyncratic word processing software. Except with extreme ingenuity it would not communicate with any other computer of its day. Bundled with a dedicated dot matrix printer it was treated with scorn in parts of the computing press.
But it sold at a remarkably low price and replaced the typewriter in millions of households that would never previously have thought of getting into computers at that time. Sugar not so much spotted a gap in the market as created an entirely new market and sold 8 million PCWs as a result.
Amstrad itself has enjoyed no repeat of this mould-breaking success and is now a more humdrum electronics company which earns a decent income partly from set-top boxes for digital television.
He has cleverly invested in property…
Sir Alan still owns 27.8% of the equity, worth about £29m at recent market prices.
But this is small beer compared with the property assets he has steadily been building up with the cash generated from his other interests.
His private (ie, non-listed) holding company is appropriately called Amshold Group, and, via an intermediate Channel Islands-based company, holds his stake in the public Amstrad plc, his stake in listed football club Tottenham Hotspur plc (now sold), in his Amsair range of aircraft leasing companies and in a multiplicity of Amsprop private property investment, development and dealing companies.
….and borrowings are remarkably low
Of gross assets of £286m in Amshold Group, investment properties account for £119m and dealing properties for £48m.
Borrowings are remarkably low at £28m, and far outweighed by cash of £64m.
All these figures are from the latest available accounts filed at Companies House, for the year to end-June 2006.
The accounts paint a picture of a very cautiously run property empire that has profited from the exceptionally buoyant conditions in the commercial property market in recent years.
But the identifiable assets detailed by Companies House still fall short of the TV claim of an £800m empire.
This figure suggests that the Sugar empire has been a very active purchaser over the past year when the property market was beginning to look overheated (as the latest directors’ report of Amshold Group itself acknowledges) and many others were drawing in their horns.
One such purchase was, of course, the IBM headquarters on London’s South Bank, for which Sir Alan paid a reported £115m.
Indeed, apart from observed market purchases, there are hints of this expansion in a plethora of new Amsprop companies, too recent yet to have filed accounts, including Amsprop Southbank (presumably the vehicle for the IBM building purchase) and Amsprop (No 2) through to No 6.
This may include the 480-acre site at Stansted.
Simon Ambrose, the “apprentice” that Sir Alan hired in the recent final, is now training as a surveyor within Amsprop, which is run by Sugar’s son, Daniel.
The latest rumours are of a plan to build “London’s most expensive office” in St James’ Square.
Ambrose is likely to have a grandstand view of a pivotal point in the history of Sugar’s empire.
Can the man who made money, and a lot of it, by riding a rising property market perform equally well in the far harsher climate that probably lies ahead?
We shall see.
But should he make bloomers, he will have one consolation.
There’s nobody to tell him “You’re fired!”
Michael Brett is a financial journalist and author of Property and Money and How to Read the Financial Pages
