Burford buys 15 properties

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THE UNWINDING of Ladbroke's pounds 800m property portfolio, expected since the departure of the former chairman, Cyril Stein, began yesterday with the disposal for pounds 103m of 15 sites to Burford Holdings.

The acquisition, which brings Burford's property purchases to pounds 228m over the past year, will be funded by a three-for-five rights issue at 92p a share to raise pounds 100m.

Four properties account for most of the portfolio value: an office building in Glasgow, City Plaza retail and office site in Birmingham, the pre-let but unbuilt Falkirk Retail Park, and 65 Leadenhall Street in London, an office building. When completed, the properties will provide rental of pounds 8.4m a year, implying an initial yield of 8.2 per cent. In the year to December rents amounted to pounds 5.9m.

Following the rights issue, Burford's second since last summer, gearing will fall to 37 per cent from the 68 per cent at the end of 1993. Nigel Wray, chairman, said a self-imposed ceiling of 100 per cent gearing meant the company could make a further pounds 148m of acquisitions.

Burford also announced improved results for the year to December. Pre-tax profits rose 51 per cent to pounds 5.7m, earnings per share were 22 per cent higher at 3.38p and the dividend rose 31 per cent to 1.4p.

Mr Wray said: 'We believe 1994 will see increased property values and liquidity. There will also be more tangible signs of rental growth.'

Despite the absence of higher rents, net assets per share benefited from the hardening of investment yields last year, emerging 49 per cent higher at 72.3p.

Burford's shares closed 1p lower at 121p. Ladbroke rose 1p to 205p.