Goode Durrant makes pounds 9m property write-off

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The Independent Online
A BELIEF that property values in the South-east of England will never recover has prompted a pounds 9m write-off at Goode Durrant, the mini-conglomerate.

The write-off wiped out profits for the year. Goode lost pounds 1.1m before tax in the 12 months to 30 April, against a profit last time of pounds 5.2m.

Michael Waring, Goode's chief executive, said: 'The property market has changed significantly. In the South-east of England it is unlikely that property will return to the values attained in the late 1980s.'

Derek Kingsbury, Goode's new non-executive chairman who is also head of engineer Fairey, said many other companies will be forced to make similar write-offs as it becomes apparent that the slump in property prices is a permanent, not a temporary, feature.

The company, whose business interests span Ford car dealerships, construction equipment hire and housebuilding, took pounds 6.2m of the asset write-offs as exceptional items in the profit and loss account. The rest was written off against reserves.

Most of the devaluation was at Goode's trading properties, particularly the two South-east Ford dealerships, in Brentwood, Essex and Bexley, Kent.

However, Goode's housebuilding division knocked a third off the value of its landbank. Mr Waring said it assesses the value of plots in relation to what they are worth as open plots, rather than counting on enhancement from development.

Aside from the exceptional write-offs, Goode made a profit, but has been exposed to industrial sectors hit hard by recession.

Operating profits fell 30 per cent to pounds 5.1m from pounds 7.4m. Goode's businesses hiring construction equipment, housebuilding, and motor distribution all suffered. However, a tripling of profits at Northgate, which hires out small commercial vehicles, gave Goode's figures respectability.

Goode has a hostile 24 per cent shareholder in Winnedael, a holding company for the interests of the South African Nash family. Winnedael said the results were 'disappointing.'

Mr Kingsbury said he would meet all shareholders over the next few weeks, including Winnedael representatives.

Despite the write-offs and the falling profits, Goode has maintained its dividend at 5.4p. Winnedael, despite its criticisms, made pounds 700,000 from the dividend declaration.

The loss per share is 5.7p compared to 9.3p last time. Shares dropped 2p to 73p yesterday and are now trading just 4p above their five-year low.