Small Talk: No sign of property blues in booming Bulgaria

  • @AlistairDawber

Everybody knows that property prices in the UK are heading south and that the spectre of negative equity is once again raising its head. Not so in Bulgaria, apparently.

Last week, Bulgarian Property Developments was shouting from the Sredna Gora mountain tops after it managed to sell its logistics park in the Black Sea town of Varna for €15m (£11.9m), the valuation given to it by Colliers last Dec-ember. That is important, says its chief executive, Ivo Hesmondhalgh, not only because it helps bump up the group's cash position, but also because it goes some way to proving to investors that the group's net asset value is sound.

Mr Hesmondhalgh was so chuffed, in fact, that he has decided to buy more shares in the group, a lucrative move since last Tuesday when BPD announced a 19p dividend. The shares closed on Friday at 51.25p, and investors still have until 11 July to buy before the stock goes ex-dividend, effectively meaning that buyers can pick up shares for about 32p. Analysts say that the group trades at a significant discount and that the stock actually should be worth 56p given the net asset value. Moreover, if the group's application to increase density in its major site in Sofia gets approval, this figure will rise to 71p.

Mr Hesmondhalgh only managed to get three hours sleep last Thursday night, after a disturbance at Sofia airport, from where he was travelling to his home in Barcelona, caused his flight to be cancelled. He should sleep more easily on the night of 17 July after the group pays the dividend.

Begbies Traynor Group

There are always those that seem to do well out of a crisis. The Alternative Investment Market-listed Begbies Traynor Group, a business rescue and restructuring firm, is probably pretty well placed as a plethora of companies feel the credit crunch pinch.

The group, which acted as administrator for the doomed business airline Silverjet last month, has its results out on Wednesday this week, and they are expected to be impressive.

The company issued a trading statement in May, saying that, unsurprisingly, its business insolvency division, which generates 75 per cent of revenues, had a "significant recovery in work flow". Quite how significant, we will see on Wednesday, but several analysts are already lining up to recommend the shares in anticipation of stellar numbers. "The operational base has been significantly scaled up in preparation for increasing demand and we expect 2009 and 2010 to be strong years," say those at Brewin Dolphin. They say that revenue will grow organically by about 9 per cent during this period.

While the majority of companies in a range of sectors are really starting to find business tough going, Begbies could just be about to be to enter a golden period.

Alternative Networks

Good news for Alternative Networks shareholders: the company is set to give about £4m back after having rather a good time of it recently.

The group, which sets up small- and medium-sized companies with communications systems, is a something of a success story: it was established in 1994 with £10,000 of capital and is now worth about £65m, with turnover in the region of £100m.

On the face of things, Alternative Networks might be considered to be a potential credit crunch casualty; as its customers struggle, so they lay staff off staff and need fewer mobile phones and Blackberries.

Clearly, this is not the case. Its chief executive, James Murray, says that the group is diversified: its biggest customer generates just £75,000 of monthly revenue and contributes less than 1 per cent of overall takings.

Mr Murray, who himself owns 30 per cent of the stock and is therefore in for a handsome pay day, also says that as his customers begin to feel the pinch, they are more inclined to allow staff to work from home, thus increasing the need for communications devices.

Either way, shareholders will be happy, and because 50 per cent of the stock is owned by staff, the summer party should be a good bash too.


The next few weeks are set to be very busy for the outsourcing group Spice. Today, the group will announce its annual results, and chief executive Simon Rigby predicts it will be a "particularly good day".

The smart money is on the group, which predominately operates in the utility and infrastructure markets, posting pre-tax profits of £22m; an improvement on last year's £13.5m. However, the work is not done after Monday because the company is hoping to move to the main list by the end of the month: the culmination of six months of very hard work, says Mr Rigby.

Spice will probably be welcomed to the main list as a pretty safe stock. The company runs services for electricity and water companies, among others, such as bill collection and water meter installation. With the water regulator targeting half a million new water metres being installed in people's homes each year, there appears to be plenty for the group to get its teeth stuck into.