Chesterfield profits and assets surge

SHARES in Chesterfield Properties rose 12p to 613p yesterday after a 63 per cent leap in net assets per share and 62 per cent improvement in earnings, writes Tom Stevenson.

The shares have risen from a low of 105p since the property market turned in 1992.

Chesterfield shrugged off a pounds 1m loss from its West End cinemas and theatres to record trading profits before tax of pounds 8.2m after pounds 7.7m in 1992.

Net assets per share rose from 398p to 650p in the year to December while earnings per share jumped from 15.7p to 25.5p. The increase in shareholders' funds more than made up for a decline in 1992 from 534p and prompted a 0.5p rise to 8p in the annual dividend from last year's reduced 7.5p.

Chesterfield's performance, better than most of its peers, reflects the company's high level of gearing, which ended the year at 104 per cent.

Heavily borrowed property companies do well in upturns because rises in the value of their portfolios have a disproportionate impact on shareholders' funds.

The increase in net assets was driven by a 24 per cent improvement in the value of the company's central London offices, which represents about half the portfolio.

Provincial shopping centres increased in value by 13 per cent, with industrial properties and theatres both ending the year 10 per cent higher.