BHH, where a proposed management buyout has been called off, has managed to steer a steady course through 1989, with pre-tax profits and net assets per share stable at £7.4m (£7.3m) and 120p (120p) respectively. Earnings per share, however, are down to 3.76p (13.48p), given BHH’s equity-related financing of a £42.5m portfolio.
Thanks to the £42.5m purchase of a portfolio from Slough Estates in early 1989, BHH is now mainly an industrial property company, with a strong West Midlands bias and a £12.8m (£9.9m) rent roll. Interest payments came to £3.2m net (£3.8m) and BHH has put it all through the profit and loss account. “It is not our policy to capitalise interest;,” says chairman David Fitzgerald. “Anyone who does that is looking for trouble.”
Profitable trading is now harder, he says, but BHH is not involved in any major speculative developments. “We see ourselves concentrating very hard on the existing portfolio by working the management side and getting planning gains.”
Earlier this year, Fitzgerald and finance director Robin Bagnall were trying to put together funding for a management buyout of the company. However, their attempts have foundered on the banks’ reluctance to lend on property. “To get new money is very difficult,” says Fitzgerald. “We managed to get a bond in place and get equity, but we weren’t able to get the £20m bridging loan needed.”
The total dividend is being maintained at 4p (4p).
