For the year to the end of December 1994, profit before tax was £64m, Slough announced. It was an increase of 20 per cent on 1993, but lower than the £66m expected by City analysts.
Net assets per share were 276p at the year-end compared with 269p in the previous year, but below City forecasts, which ranged from 278p to 305p per share.
The company had started the year with high hopes of a recovery in property values, increases in occupancy levels and higher rental rates.
None of these predictions were realised.
Instead, interest rate increases during the year held down property values and uncertain business confidence pegged back demand for business accommodation, keeping down rents.
Sir Nigel Mobbs, the company's chairman and chief executive, said yesterday: "We are disappointed with how the year finished in comparison to how the year set out. Values were in the ascendancy at the start of the year, but interest rates went up and so values fell back."
Sir Nigel said City disappointment was in part due to analysts being slow to spot the slowdown, though it could be seen in the published indices of property values.
He said the company was optimistic about the future: "The overhang of space is being absorbed, particularly good space.
"There is even the potential for shortages in some areas including around the M25 and in the West Midlands. Business confidence should also pick up."
John Atkins, a property analyst with UBS, said: "The figures are disappointing in both revenue and capital terms."
Mr Atkins is predicting profit before tax for the current year of £65m, only slightly up on 1994.
He said: "The problem with this company is it is hard to see where growth is gong to come from. We don't think they will be able to increase the dividend before 1999."
He added: "We have got them as a `sell'."
The company lowered its dividend 30 per cent in 1992 from 11.52p to 8.1p, and it has remained at that level.
The scope to raise the dividend is limited by the company's desire to improve dividend cover to one and a half times earnings.
At the moment, earnings are 9.1p per share, up from 7p last year.
Sir Nigel said: "We would like to see the dividend rise but we will have to assess the make-up of and quality of earnings before that happens. A lot depends on the outcome of 1995."