Markheath makes pounds 22m loss after write-down

A WRITE-DOWN of property values totalling pounds 15.1m helped to push Markheath, the property group 61 per cent owned by Adelaide Steamship, to a pounds 22.7m loss in the year to March against a pounds 4m loss last time.

The losses and provisions meant net asset value fell 30 per cent to 45.1p. There is no final dividend, leaving the total at 0.5p, down from 4p last year. The shares were unchanged at 10p.

Losses at the trading level were reduced from pounds 2.5m to pounds 1.1m but exceptional charges rose from pounds 1.6m to pounds 21.7m. Apart from the property write-down the group also provided pounds 5m against its 13 per cent stake in Frogmore, included at a carrying value of 295p a share.

That compares with analysts' estimates of 412p net asset value for Frogmore but a share price of 264p. Michael Rendle, Markheath's chairman, said: 'If we were planning to sell it in the market we would be doing so now.'

Two-thirds of the property write-down is based on directors' valuations, mainly of development sites at Stevenage, Hertfordshire, and Chiswick, west London. Mr Rendle said the auditors were happy with these estimates. The group was 'talking seriously' about a pre-sale or pre-let on both sites. No work will start until this is achieved.

Borrowings fell from pounds 95.4m to pounds 72.9m, helping to cut interest costs by 42 per cent to pounds 7.9m. But pounds 5.5m ( pounds 6.6m) of this was capitalised.

Markheath does not intend to replace Paul Bobroff, founder and chief executive, who resigned during the year. Instead, the two remaining executive directors will report to the two non-executives.