Your Space drops development as profits nosedive
SERVICED office and refurbishment company Your Space has posted a half year pre-tax profit of just £2,000 against £2.48m last year, and has dumped its property development division to focus entirely on services.
Turnover for the six months to the end of September 2008 was down to £3.72m from £9.61m for the same period last year. The developments division was dropped, having previously brought in £8.28m in 2007.
Having moved away from property investment the AIM-listed company is now purely a services business. As well as providing serviced office space, it now also offers its redevelopment expertise to landlords on a contract services basis.
Previously, the company acquired freehold buildings for restoration or conversion to serviced offices, before selling on via a lease arrangement. But the company has abandoned this side of the business citing uncertainties in the investment market and the amount of capital a project would tie up, at a time when bank lending is notoriously unreliable.
Chairman Chris Philips said: “We undertook a policy of disposing of assets at the peak of the property cycle and repaid bank borrowings linked to these assets.
“Given the turbulence in the property investment market we acted quickly to reposition the business and we are also benefitting further from our specialist service offering to landlords throughout the UK which in turn enables us to expand our portfolio of business centres.”
The company added that the serviced office division is seeing record enquiry levels and that this level of activity is expected to continue.
Chief executive Shaun Mealey said: “We are seeing a fundamental positive change of thinking towards the serviced office sector as more and more businesses are moving away from the traditional leasing route preferring flexible space that can meet their needs.
“This is of course even more prevalent at present as the economic uncertainty continues and businesses are restricted from being able to raise finance to reinvest in IT /Telco services and other related capital.”
Income from rents and services increased by 10% to £1.45m. The new division contract services brought in £2.27m.
The company added a new serviced office centre to its portfolio in the year – at St James Court in Manchester, and has opened another in Belfast since the end of September.
The group has borrowings amounting to £11.8m with the Bank of Ireland, payable on demand. It also has a £1.3m convertible loan due for maturity in December 2010. The directors are in the process of pursuing alternative sources of funding other than bank funding.
