'Recovery is going to take longer than anyone anticipated,' he said. 'There have been so many false dawns. It's just a case of toughing it out.'
Although Derwent's property portfolio focuses on the hard-hit central London market, net revenues fell only slightly to pounds 3.1m. Mr Burns said there were no defaulters in the first half. The company saw a reduction in losses at its associate companies and smaller interest payments for the group.
It all helped pre-tax profits for the first half of 1992 rise to pounds 603,000, and earnings increase to 5.2p (3p). But the company remains cautious and declared an unchanged dividend of 2.9p.
The value of Derwent's portfolio, giving net assets per share of 744p last year, is likely to fall to around 560p this year. This compares with 937p in 1990.
Derwent, whose crown jewel is Berkshire House, a building of 52,000 sq ft opposite the Shaftesbury Theatre in London's West End, has just 10,000 sq ft of vacant space on its books, Mr Burns said. Derwent has planning approval to redevelop its 20,000sq ft office block off Leicester Square. Refurbishment work on a 21,000sq ft development in Soho is expected to be completed in spring 1993.
Graham Stanley, property analyst at County NatWest, has raised his forecast for full-year profits to pounds 1.1m (pounds 1m), though he would not predict the final dividend. 'There is just so much uncertainty in the property sector. But there can be few property companies around that are able to pay their dividend out of a continuing rental flow, which is probably why Derwent will survive.'Reuse content