Langtree sets cautious growth path in testing economy
Property company, Newton-le-Willows based Langtree, has set out a path for cautious growth as economic uncertainties continue to dampen demand and depress rental values for commercial property in the UK.
Writing in the annual director's report and annual statements for the year ending 30 June 2009, which have just been submitted to Companies House, chairman William Ainscough revealed the company made a pre-tax loss of £1.3m.
This loss is explained by a small number of ‘significant one-off movements' principally involving three Langtree projects. Without this adjustment the report states that ‘underlying operational activity' would deliver a pre-tax profit of £1.1m for the same period.
This activity is centred on Langtree's strong investment portfolio of commercial property which is geographically spread and totals some 4 million sq ft. With approximately 1000 tenants from diverse business sectors, the portfolio delivers a rent roll of £19m per annum.
The Company has taken the opportunity to add to its portfolio where possible with acquisitions including a 430,000 sq ft industrial portfolio in Yorkshire and the North West.
On the development side, the Company's activity has been ‘significantly curtailed' but nonetheless, it continues to progress schemes up to the point of delivery in readiness for approved trading conditions. Regardless, Langtree does hope to deliver two major schemes this year: Festival Gardens in Liverpool and the St Helens RLFC / Tesco development in St Helens.
Its three strategic joint venture partnerships: Network Space (with the Homes and Communities Agency), PxP West Midlands (with Advantage West Midlands) and Onsite North East (with One North East), where Langtree manages 1.5 million sq ft of property and 65 development sites, remain a focus for future business activity.
The report also outlines how the Company's core economic foundations place it in a strong position to continue a growth trajectory underpinned by a ‘solid' loan to value ratio of 45 per cent. This is maintained against a background of a 15 per cent reduction in the overall value of its portfolio and the value of the Company's net assets being reduced by 34 per cent from £120m to £78m.
The renegotiation of the Company's senior debt facilities with Lloyds Banking Group, coupled with its favourable loan to value ratio, diverse portfolio and healthy rent roll ensures that Langtree is optimistic but realistic looking forward.
Langtree's Managing Director John Downes said: "We continue to operate in challenging times within the commercial property industry but we do so from a wide and solid platform from which the Company can thrive over the coming years.
"In a market which makes development activity more challenging, we will concentrate on managing our existing portfolio and where possible, adding to it via acquisition."
Chairman Bill Ainscough said: "Overall our approach going forward will remain a cautious one. We are in a sound financial position and we will continue to focus on growing our property portfolio where opportunities arise and furthering our development positions in line with the market to create value in future years. Also we will continue to look to secure new opportunities where they will fit well into the business and where we can add value."