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UK Land

Michael Foster

Q. What do Jim Slater, Jersey waterworks and Chelsea football ground have in common?

A. They have all had dealings with rugby fanatic and buccaneering entrepreneur of the property world, David Bulstrode.

Mr Bulstrode is currently a leading light at UK Land, Marler Estates, House Property Co of London and shop developer Compact. Add up all their current, or likely, market values and you come up with £35m — similar to the worth of Imry Properties.

UK Land, newly reconstituted by the merger of the private Wellington Group and property shell Weber, is the quoted company in which Mr Bulstrode has the most money. It is becoming known as a property company break-up merchant, and has even managed to unravel Joe Benjamin’s tangled Thames Investments group at a profit.

Mr Bulstrode is a former bank manager at Lloyds of Jersey. In the early 1970s he joined up with the local branch of Slater Walker, and rapidly built a reputation as a dealsmith. After the near collapse of SW in the mid-1970s, Lazards took over its Jersey operation, but Mr Bulstrode stayed as a director.

Around 1978, Mr Bulstrode led a group of Lazard investors into troubled Marler Estates, a small property company then run by 78-year-old Leslie Marler (cousin to Dennis Marler of Capital & Counties). Mr Bulstrode worked with an Irish troubleshooter called Robert Noonan to sort out Marler Estates.

GLEB controversy

In recent years, Marler has taken control of Chelsea football ground and won planning permission for a residential development on the pitch; it has had a brief, and controversial, liaison with the GLC’s Greater London Enterprise Board and is piecing together a giant shopping scheme in Wembley once planned by Mohammed Punjani. Mr Bulstrode’s clients bought shares in Marler at 25p; they are currently at an all-time high of 210p.

In 1979, Mr Bulstrode took a holiday from the problems of Marler, assembling a group of investors to take control of a tiny Irish property company called Laganvale. They bought shares at 6p, and rumours that Jim Slater (ex-Slater Walker) was ready to take control sent them soaring to 32p. Mr Slater did indeed buy shares in Laganvale from Mr Bulstrode’s clients; he quickly stuffed his residential dealing companies into Laganvale for shares, and sold out to other investors.

If Jim Slater had ever wanted to make a serious comeback, Laganvale should have been his vehicle. Instead, Mr Slater has spent the last few years punting in Yelverton, Parkdale, Southend Stadium and obscure Canadian mining stocks. Laganvale (now Regentcrest) is run by the Richardson brothers (property developers out of the West Midlands); they took control soon after Mr Bulstrode bought and sold a fresh stake in the company in 1984-85.

In 1979-80, Mr Bulstrode also looked at troubled (now bust) British Anzani to see if anything could be salvaged from the mess; Marler ended up taking an empty office block in Sittingbourne off Anzani’s hands, along with various tax losses. Mr Bulstrode’s attempt to revive London Intercontinental Investment Trust as a shell failed when the Stock Exchange cancelled its listing.

But in 1981, Mr Bulstrode did manage to get a team of investors marching into a small textile company called Levex. The share price doubled as Aitken Hume bought the Bulstrode stake; Tim Aitken (grandson of Lord Beaverbrook) and his cousin John Kydd moved on to the board and tried to get Levex motoring as property group Whittington International. Their success was mixed; Aitken Hume took over Whittington in 1984-85, and soon after Mr Aitken and John Kydd were thrown off AH’s board. They have now popped up as backers of a former Aitken Hume off-shoot called Leisuretime International. David Bulstrode has taken a 7% stake in the operation.

Then, David Bulstrode’s attention was drawn to the Jersey New Waterworks Co by a bright chap called Colin Tett (a former client of his at Lloyds Bank). They realised that the Waterworks’ share price was ridiculously low, and bought in with droves of other investors. As the Bulstrode stake rose towards 30% the whole island was convulsed with speculation on whether his camp would get control. Jersey’s government eventually stepped in and bought control — giving Messrs Bulstrode and Tett a fat profit on the deal.

Mr Bulstrode’s adventures worried Lazards, his employers, despite all the money he was bringing in. Somehow, they felt, merchant bankers should not be seen to be doing things like that. Press articles charting “The rise and rise of banker Bulstrode” raised several eyebrows. Mr Bulstrode handed in his resignation in March 1982.

St James Corporate Services became Mr Bulstrode’s master company in Jersey. He also formed Wellington with Colin Tett and Graham Barclay (younger brother to David and Frederick Barclay, who took over the ships-to-brewery group Ellerman Lines a few years ago and who own the Howard Hotel in London).

Wellington had net liabilities of £5,000 in September 1981, and little else. But Messrs Tett, Barclay and Bulstrode soon got busy down at Companies House, getting details on hundreds of small property companies at random, and ringing up directors and controlling shareholders to see if they wanted to sell out.

Tempting offers

Every now and again they were tempted to take Wellington’s offers, which appeared generous. Many of the vendors were descendants of the founders of the companies, and lacked the energy to sell the portfolio in bits and pieces on the open market, at a better profit. They were happy to let Wellington make the effort.

Quickfire purchases of nine companies, and resales of property (often through auction rooms) lifted Wellington’s net asset backing to £1.2m by September 1983, though the company was still making small losses on the revenue side. In that year, Wellington’s routine researches in Companies House threw up the name Weber Holdings.

Messrs Bulstrode, Tett and Barclay trotted along to see the directors of Weber and negotiations on a possible purchase went well. Mr Bulstrode recalls: “We were sitting round the table, when the Weber directors suddenly said: ‘If talks get much more serious, I suppose we’d better inform the Stock Exchange.’ We suddenly realised we were negotiating the possible purchase of a quoted company”.

Without knowing it, Wellington had stumbled upon a clean company which could provide a way for a combined operation to go public.

Weber was a company founded in the early 20th century as a shoe retailer. This operation had been sold in the 1960s, and Weber kept the cash it raised in a portfolio of listed investments while retaining the freeholds of its shops. In calendar 1983, Weber made pre-tax profits of just over £200,000; its net worth was nearly £4m.

Purchase negotiations went on the back burner until a number of rent reviews due at Weber were in place. In April 1984, Wellington took 65% control by making a bid of 90p a share (roughly in line with Weber’s book asset backing). Colin Tett became Weber’s chairman.

Soon after, Wellington expanded its operations by taking a 50% stake in a new property company called Balangai (which means “White Man’s Territory” in Swahili). Balangai is run by the son of a farmer in Africa. Nine more private companies (including Wirral Estates and Liverpool & Birkenhead Property Co) were bought in the year to September 1984.

Weber soon started following the same acquisition strategy as Wellington. Its most interesting deal, completed in March 1985, was the purchase of Thames Investment & Securities, a troubled company formerly run by Joe Benjamin.

Thames was one of the first entrants to the Stock Exchange’s second tier Unlisted Securities Market in November 1980. From day one, Thames chief Joe Benjamin promised: “My approach will continue to be entrepreneurial”.

Failure in the US

In the years which followed, Mr Benjamin rapidly expanded Thames’ development programme and sent it racing into the USA in partnership with Beverly Hills Savings & Loans. Thames overextended itself; its attempts to extricate itself from a very expensive deal in Miami by going into partnership with Tom Whyte (formerly of Triumph Investment Trust, which crashed in the mid-1970s) failed miserably in late 1983.

Joe Benjamin left Thames’ board in disgrace. His backers, Grindlays Bank (now part of ANZ Merchant Bank), were left holding the baby and fought hard to find someone to take it over. Enter David Bulstrode. He suggested that the banks should write off part of their debts, in return for which Weber would take over Thames’ portfolio and liquidate the bulk of it to pay them back their money.

Grindlays and its partners agreed to the deal and Weber took control of Thames (now in liquidation), along with a mountain of expenses taken out by Joe Benjamin and his wife against their former company. Weber paid £200,000 for Thames’ share capital and persuaded the banks to reduce their overdrafts from £15m to £8 1/2m.

Thames’ largest completed scheme, a shopping centre in Newton Aycliffe, is retained by Weber, though it is still largely empty. Mr Bulstrode has just flown up to look at a fine sculpture Mr Benjamin commissioned for the centre, at a cost of £12,000. “He’d paid £8,000 towards it”, said Mr Bulstrode. “We decided it was probably worth £4,000 to buy the rest”.

Mr Bulstrode has also sorted out Thames’ residual US interests as best he can. In a recent trip to San Diego, he visited Thames’ empty block (surrounded by half a dozen other empty blocks) and found its doors open and lights blazing. Beverly Hills seemed edgy when he asked them why they had not been looking after his investment; they were reluctant to take responsibility. They went bust a week later.

Soon after taking over Thames, Mr Bulstrode bought control of a tiny residential property company called House Property Co of London. HPCL had been stalked for many years by a variety of predators including former fringe banker David Heimann’s Deltenne Holdings (now Berkeley & Hay Hill, where John Sunley has a strategic share stake).

A group of investors led by Stephen Bell (a member of the Bell family of Newcastle, who run housebuilders Bellway) won control around 1983, but lacked the financial clout to take the company anywhere. Mr Bulstrode stepped in and bought their stake. Suter’s David Abell took a share stake soon after.

Mr Bulstrode went on to try to merge HPCL, Wellington and Weber, but the Stock Exchange raised various objections. At the tail end of last year, Mr Bulstrode persuaded Ken Bishop (finance whizz at store chain Debenhams, before Burton took it over last year) to move into the saddle. Mr Abell sold out. Mr Bishop has plans to put HPCL into commercial property and finance. HPCL shares at 335p are near their all-time high.

The Weber/Wellington team pulled off two other big deals in 1985. The first was a purchase of properties from Costain’s County & District for £7 3/4m; Weber was able to turn most of them for £5.7m soon after to show a £300,000 profit.

The second was the purchase of a private company called UK Land Mortgage & Finance from Count Butzkoy of Jersey. The deal was complicated because, when Mr Bulstrode came on the scene, the Count had agreed to sell to Arthur Oakes’ Millbank property group via an option which Mr Oakes acquired through his purchase of Frank Romain’s private Towngrade property group.

The Romain company also held control of a quoted company also called Towngrade (formerly First Talisman), chaired by Sir Edward du Cann (former boss of Keyser Ullman and current chairman of Lonrho). Mr Oakes was obliged to make a full offer for the quoted company, and buy UKLM off the Count, in short order.

The state of his balance sheet did not make finding finance easy; Millbank made a cash flow deficit of £480,000 in 1983-84 and its accounts were heavily qualified by auditors Finnie & Co. After renewing Mr Oakes’ option once, Count Butzkoy agreed to sell UKLM to Wellington for £5.4m. Mr Oakes finally made his bid for quoted Towngrade in December 1985, and retains majority control. He put up Towngrade’s dividend despite a fall in its earnings per share on the announcement of his last set of results, doubtless to the benefit of Millbank’s cash flow. Time will tell whether Mr Oakes’ programme gets into gear.

By last January, Messrs Bulstrode, Tett and Barclay put Weber, Wellington and UKLM into a Wellington subsidiary called UK Land and retained the quote in the name change. At its inception, UK Land held net assets of £5.45m (126p a share); net borrowings were over twice as high. Its property portfolio was worth £22 1/2m, largely on up-to-date valuations by Nelson Bakewell and Barnard Marcus; it was mainly a string of properties, nearly all worth under £1m each, and yielding 10%.

UK Land has subsequently sold part of the UKLM portfolio (bought for £4.1m) for £5.4m, lifting assets per share to 146p and reducing its borrowings to a much more manageable level. Fresh acquisitions and sales are being arranged.

Apart from looking after Marler, HPCL and UK Land, Mr Bulstrode is also chairman of Compact Retail Developments. Compact is run by Jim Smith and has a net worth which probably exceeds £15m. Its current schemes include shopping centres at Clapham Junction (on a site bought from British Land), Cricklewood, Finchley Road, London, and Preston.

The Preston scheme comprises 335,000 sq ft and includes a huge Debenhams store, which will doubtless become a Galleria-style flagship for Burtons’ new empire, although the scheme was actually initiated by Debenhams’ old management. Following Compact’s link up with Debenhams 18 months ago, Mr Bulstrode and friends took a partial stake in a small company called FPI Development Co, set up to deal with Debenhams’ redundant properties. To date, Mr Bulstrode is a part-time director of FPI.

Compact will probably seek a stock market quote next year. Its revenue account may not be the strongest, but asset growth is impressive. There is a chance that Compact will get a quote by reversing into a medium-sized property company: “Various plans are under consideration”, says Mr Bulstrode.

On top of all that, Mr Bulstrode is also chairman of a Business Expansion Scheme-backed restaurant chain called City Restaurants, which set up its first operation in a unit in Covent Garden developed by Marler Estates last year. Small wonder that Mr Bulstrode has not taken a holiday for 15 months.

On the face of it, he would seem open to a charge of having too many conflicts of interest. He makes the point that each one of his companies is run on a day-to-day basis by a different team, and each has a different area of interest (HPCL should lean toward finance; Compact is purely retail; UK Land is interested in portfolio break-ups, and Marler pursues various development opportunities). That may not satisfy the City establishment, even though some of its members are open to similar but unvoiced criticisms.

For all of Mr Bulstrode’s role in the changes to bring UKL to today, his beneficial state is only 0.01%. Mr Tett and Mr Barclay both have 18% and both another 6% non-beneficially. Mr Bulstrode has another 14.06% non-beneficially through a Panamanian company.

As for UK Land, its shares are at an all-time high of 136p. Its growing army of fans are capable of pushing them higher. It is not every day that you come across a company which promises to be quite so active so soon after its reorganisation.

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