Hollins Murray boosts profits

DEVELOPER Hollis Murray managed to increase pre-tax profits by 20% to £2.4m in 2011, due partly to the reversal of previous impairments on valuations.

The Altrincham-based company declared an exceptional gain of £672,000 as a result of the reversal, which meant that it made a “core” pre-tax profit of almost £1.8m.

Writing in the notes to the accounts, chairman Bill Murray said that one of the main ambitions for the firm had been try and achieve a situation where its core post-tax profit was healthy enough to meet dividend payments.

This increased over the course of the year by around £1m to £1.4m – a situation, which Murray described as “great progress”.

He added that the year to August 31, 2011, had been “another of consolidation for HMG, although that should not be confused with any lack of activity”.

The firm managed to increase the value of its net assets by 5.5%, due partly to the retained profit but also a £2m-plus increase in the value of its portfolio.

Chief executive Nick Casson argued that this “relatively small” uplift masked the improved performance of many of its properties, not least its biggest investment at Flint Retail Park, where it completed a rent review which saw the amount of rent paid by Sainsbury’s increasing by 90%.

Mr Casson told TheBusinessDesk.com that rents had been “very low” when it bought the park, which made achieving an uplift in value much easier.

“We had some really strong performing units, but there is still more to come,” he added.

The company is currently involved in a £30m joint venture with Terrace Hill at Prestwich, north Manchester, which could see the town’s Longfield Centre knocked down to be replaced by a supermarket.

Hollins Murray is also in talks with three supermarket operators about becoming the anchor tenant at its Gerard Centre at Ashton-in-Makerfield, where it has obtained planning consent for a 35,000 sq ft foodstore.

Since its year end, the company has acquired the nearby Winstanley Shopping Centre in Wigan, which also has potential for redevelopment, and Mr Casson said the group would continue to assess new investments.

“Anything we do will be opportunity-led,” said Mr Casson. “There are opportunities out there due to the weakness of the market but we won’t be prepared to take any risks.

“We’ve been very careful about risk, which is why we’re in the healthy position in which we find ourselves,” he added. “It’s often said around our boardroom table that risk is the biggest word in our vocabulary.”

The firm finished the year with net assets of £40.7m (£38.5m).