MEPC fails to raise the pulse: The Investment Column
Wednesday 05 June 1996
Restoring confidence among investors in the City is clearly taking time as the broadly sideways movement in MEPC's shares over the last 18 months indicates. Even yesterday's news of a respectable 11 per cent rise in first-half pre-tax profits to pounds 67m, including a pounds 5m gain on the sale of fixed assets against pounds 7m last time, created few waves.
The market is still digesting MEPC's recent shift in strategy. In November its 17 European properties, which account for about 5 per cent of group assets, were put up for sale so the group could focus on the UK, Australia and the US. Although MEPC will not confirm the name of the buyer, it is an open secret that it is in the middle of selling the European portfolio to Commerz Grundbesitz Invest (CGI), an investment fund managed by Germany's Commerzbank. MEPC says almost two-thirds of the properties are under legally binding contracts for sale, while "handshake deals" cover the rest. MEPC hopes to complete the sale by the end of the year at about their book value of pounds 185m.
Getting out of Europe now is probably a good move given the fragile state of France and Germany. But increasing exposure to the US property market via the recent pounds 190m purchase of North American Property Unit Trust raises more questions than it answers. MEPC owns large shopping malls in California, Atlanta, Florida and Las Vegas, but the US retail climate for local and national operators remains uncertain. Although the UK commercial property market is still patchy, a lower tax charge and interest charge should ensure pre-tax profits reach pounds 140m (pounds 123m) this year and a maintained 20p dividend is not paid out of shareholders' funds. At 415p, down 3p, the shares stand on an estimated 7 per cent discount to net assets, in line with the top seven developers. Unexciting.
The food poverty scandal that shames Britain: Nearly 1m people rely on handouts to eat – and benefit reforms may be to blame
US Navy christens huge $3 billion destroyer ship USS Zumwalt that appears as a fishing boat on enemy radar
Scottish independence: It is the English who should be on their knees, begging the Scots to vote ‘No’
Nigel Farage fatigue? Half of voters ‘immune’ to Ukip’s appeal
Nigel Farage on Have I Got News For You: Ukip leader ridiculed over expenses and party 'fruitcakes'
Nigel Farage: I’m taking on the status quo, and the Establishment’s fighting back
- 1 Are you turning into your dad? The top ten signs you've embraced dad-ism revealed as survey says 38 is age men turn into their father
- 2 Overheard in Waitrose: documenting the chatter in 'Britain's poshest supermarket'
- 3 Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'
- 4 24 people applied for the 'world's toughest job', here are their interviews
- 5 Grace Dent on TV: Game of Thrones has jumped the shark
iJobs Money & Business
£150.00 per week: QA Apprenticeships: This company has been providing on site ...
£221.25 per week: QA Apprenticeships: This company is a well established Inter...
£40000 - £50000 per annum: Harrington Starr: Client Relationship Manager - SQL...
£35000 - £50000 per annum: Pro-Recruitment Group: Take your chance to join the...