Opal reduces losses as income improves
OPAL Property Group, the Manchester-based specialist student property developer and investor, reduced pre-tax losses to £5m (2009: £21.2m loss) as a result of improving sales in the year to September 30, 2010.
Newly-filed accounts for the company show that it managed to increase turnover by 22% to £113.9m (£93.7m).
During the year, the company delivered three new schemes at Dundee (its first in Scotland), Exeter and Nottingham, as well as a refurbishment in London which added 1,433 beds to its portfolio.
All of the new beds were completed on time by September 2010, and Opal also said that occupancy rates for its properties “continue to be excellent”, standing at around 99.3% at its year end.
Chairman and founder Stuart Wall said the firm had also managed to achieve “strong” rental growth due to a shortage of suitable university-owned accommodation, increasing demand from overseas students and rises in university-leased properties where rents were linked to inflation.
“We believe that Opal is now through the worst of the recession an that prospects for future growth and deleveraging are good,” said Wall.
“The group is in better shape financially than it has been for a couple of years and there are new opportunities for business growth which are being pursued in a measured and low-risk manner.”
The company finished the year with net assets of £247m (2009: £246m), but the value of its tangible fixed assets increased by £10m to £1.78bn. Net debt increased to £878.7m, from £844.5m, according to the accounts.
Opal Property Group said that relationships with its panel of ten lenders remained “sound”.
“All interest and capital repayments are being met, along with continuing and forecast covenant compliance,” said Wall.
It also has £81m of available tax losses and Wall said that directors “consider the group will be in a non-taxpaying position for the foreseeable future.”
The firm is also concentrating on “core activities” in the UK and is planning a sale of European interests in Belgium, Holland and Germany.
“Whilst living in challenging times, we look forward to the future with confidence,” said Wall.
“We have a quality product, generating sustainable and significant growth and positive cash flows which give us confidence to develop further in the future.
“There are still a large number of opportunities to build new projects for universities which will support our continued growth once the economic climate improves.”
