Southend Property makes share trust loan provision

Click to follow
The Independent Online
SOUTHEND Property, which last year failed in a pounds 130m bid to acquire rival Frogmore Estates, has redrafted its 1991 accounts to provide pounds 743,000 against a loan to its employee share-ownership trust, writes Heather Connon.

The revision is disclosed in its accounts for the year to March 1992, published yesterday. A prior year adjustment cut 1991 pre-tax profits from pounds 3.1m to pounds 2.4m.

Malcolm Dagul, chairman, said the provision reflected the fact that new options were granted under the plan at 88p, lower than the original price of 195p. He added that the group's auditors, Ernst & Young, had asked for the adjustment as they believed the provision should have been made the previous year. The group announced its results a month after the bid for Frogmore lapsed.

Under the employee share plan, four directors, including Mr Dagul, and a number of senior staff have the option to purchase shares over the next five years. Southend's shares closed at 40p on Friday.

The accounts also show that the group had a pounds 22m deficit on its realised capital reserve - more than double its retained profits of pounds 9m. Transfers from this account are made to the profit and loss account to cover losses on disposals of investment property. Most other property companies charge these against retained profits, although, like Southend, they generally treat them as extraordinary items.