TCS proceeds with caution
TOWN Centre Securities today said it was adopting a “cautious attitude” towards the property market but was optimistic about the future of its biggest asset.
The Leeds-based property investment and development company posted pre-tax profits of £1.83m in the six months to December 31 2011, down from a profit of £7.75m over the same period the previous year.
Operating profit was cut by more than half to £5.2m while underlying profit before tax dipped by £400,000 to £4m.
Chairman and chief executive Edward Ziff said the group’s portfolio, including its largest asset, The Merrion Centre in Leeds, was “fulfilling a consumer need”.
Mr Ziff said this, in turn, has helped TCS’s underlying profitability to remain strong.
He said: “Town Centre Securities is weathering the current economic conditions well despite 2011 being a difficult period for retailers.
“We see attractive opportunities in our existing portfolio and are pursuing these as a priority.
“Managing our assets and our focus on value for money retailing remains central to our strategy ensuring that we maintain income generation at a level that sustains the business and our dividend.”
Looking ahead, Mr Ziff added: “The uncertainty in the economy as a whole and particularly in the retail sector, leads us to adopt a cautious attitude towards the market.”
Speaking about The Merrion Centre, Mr Ziff TCS was “very optimistic” about the future of the shopping centre and said proposals to improve its frontage and car parking would continue as the group further regenerates the centre.
Planning permission was agreed in December for 50,000 sq ft of new leisure units at the site and the scheme is set to progress when prelets have been agreed.
Rental income across TCS’s portfolio rose by 1% on a like for like basis with income from lettings at Urban Exchange in Manchester offsetting reductions elsewhere.
Mr Ziff said TCS was marketing Urban Exchange as a retail destination following encouraging performance from tenants which include M&S and GO Outdoors.
Voids over the period were 2.8%, down from 4.4%. Income from car parks was steady at £2.3m and was profitable.
TCS also completed a refinancing with RBS and Lloyds and agreed a new four year facility with Handelsbanken.
