Mucklow increases rental incomes
MUCKLOW’S fortunes have continued to improve, said the Halesowen-based property development group today as it reported a rise in rental incomes and underlying profits.
The group returned to full-year profits in 2010, and today its interim report to the six months ending December 31 showed gross annual rental income increasing by £2.1m (12.9%), although pre-tax profit was £4.8m, compared with £18.8m. The group said previous half year’s profit figure included a £11.6m revaluation surplus and a contribution of £1.6m from trading profit. There was no trading activity up to 31 December 2010 and the deficit on the revaluation of the investment properties and development land was £1.0m.
The underlying pre-tax profit increased by £0.2m from £5.5m to £5.7m. Annual rental income had risen to £18.5m at 31 December 2010 (30 June 2010: £16.4m).
The directors announced interim dividends of 8.27p per share, an increase of 3% over last year.
Mucklow’s portfolio was revalued at at £248.9m, £1.0m (0.4%) below the previous level. The group blamed a lull in the investment market and a quiet occupier market, but said market conditions had been for acquiring investment properties.
Three new properties were acquired during the period at a total cost of £11.9m. These were a 23,000 sq ft office building at Quinton Business Park, a new 41,000 sq ft warehouse in Milton Keynes, and a 110,000 sq ft warehouse at junction 6 of the M5 in Worcester. Their combined rental is £1.1m, a net return on cost of around 9%.
Chairman Rupert J Mucklow said: “We have already seen a slight improvement in the occupier markets since November and are aware of a number of serious requirements in the market. We are hopeful that tenant demand will continue for the rest of this year enabling us to let some of our vacant space and start pre-let development again.
“There is only a small supply of quality industrial space currently available in the Midlands, so any increase in demand is likely to cause rental values to harden and incentives to reduce, which will benefit the value of our investment portfolio.
“We remain positive about prospects for the full year and intend to continue the same strategy of keeping voids and operating costs under control and pursuing suitable investment opportunities.”
