Profits boost for LMS

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The Independent Online
WILLIAM GLEESON

Profit before tax at London Merchant Securities was boosted 58 per cent to pounds 35.3m for the year to the end of March by the sale of property and the write-back of provisions against its involvement in British Satellite Broadcasting, which is now part of BSkyB.

The results matched City expectations and the share price rose 2.5p to 99.5p in a strong market for property shares.

The company saw a modest increase of pounds 2.6m in rental income to reach pounds 32.6m

The company made pounds 6m on the sale of investment properties and added pounds 6.7m back to profit that had been written off its investment in BSB in 1991.

LMS has a wide spread of non-property investments, including a 14.6 per cent stake in First Leisure, which saw strong growth last year. Other investments include the food retailer Cullens and Golden Rose Communications, which has three local radio franchises.

Robert Spier, finance director, said: "Broadcasting is proving to be popular now. Some share price ratings are stratospheric. Who's to say they are wrong? I think we are seen as a safe company. Gearing is low and we have a long-term perspective on life."

Not in the price, analysts say, is any compensation the company could receive if its legal action against BSkyB proves successful. London Merchant claims it was "elbowed out" of refinancing deals, diluting its original 5 per cent stake in BSB to 0.5 per cent of BSkyB, into which BSB merged in 1991. Judgment is expected in July.

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