"Trauma" for Town Centre Securities

PROPERTY group Town Centre Securities today revealed it had made a loss of £11.2m for its full year but said it was no surprise given the “major trauma” in financial markets.

The Leeds-based group, which is concentrating on work in Yorkshire and the North West, said the loss for the year ended June 30, compared to a profit of £0.5m last time, included the impact of a property revaluation deficit of £75.3m and the exceptional tax credit on conversion to a REIT of £56.2m.

Edward Ziff, the property investment and development company’s chairman and chief executive, said: “Whilst I remain optimistic for the continued long-term success of our business, we are facing very challenging times. Property values continue to fall and I believe it will be later in 2009, at the earliest, before prices stabilise. We are also wary of the potential impact of tenancy failures.”

However Mr Ziff said TCS’s strategy of resisting the temptation of buying assets in a market where it was difficult to generate positive returns had left the company in “a strong position”.

Mr Ziff said: “We continue to look selectively at opportunities to sell assets that do not fit our long term strategy. This, together with our robust financing arrangements, should strengthen further our ability to move forward with development projects and provide firepower to acquire new assets for investment and development when the time is right.”

TCS completed developments over the year at Piccadilly in Manchester and is partner in the major Eastgate Quarter scheme in Leeds.

It said its work at Piccadilly Basin in Manchester had started to generate rental income with Building Design Partnership moving in. There were also lettings at the newly restored Carvers Warehouse, Manchester’s oldest suriving stone warehouse, including designer Jeans brand G-Star.

Mr Ziff said that excluding a non-cash loss from property valuation, and other one off items, underlying profit for the group was maintained at £7.2m.

He said the board believed this figure was the best measure of performance.

Mr Ziff, who branded the scrapping of empty rates relief “an unnecessary burden”, added that the group’s car parks division had seen increases in turnover and profit over the year. He also thanks James Crawford, who left TCS in July, for his efforts and said Richard Lewis had become group property director from property development director.

Bob Bigley will change from corporate development director to finance director on October 1.

The group’s property portfolio fell by 15.7% to £450m but TCS made £34.5m of retail property sales, up by £3.2m on expectations.

The company is on with refurbishment projects at the Merrion Centre in Leeds, at Deansgate in Manchester and West Park in Harrogate.

The group has proposed a final dividend of 5.4p, with a total dividend per share of 8.15p.