High land prices give lift to Trencherwood

TRENCHERWOOD, the Berkshire housebuilder, returned to profit in the year to October after three years of heavy losses and a financial restructuring that left shareholders with just 30 per cent of the company.

Richard Brooke, finance director, said land prices in the county had risen by almost 20 per cent over the past year, raising the value of Trencherwood's long land bank, which includes 1,500 sites and 5,400 plots under option. The company plans to exploit higher prices to sell land outside Berkshire.

Expansion during the height of the property boom in the late 1980s brought the company to its knees in the recession, with accumulated losses of nearly pounds 90m in three years.

Pre-tax profits of pounds 1.8m compared with a pounds 21.4m loss in 1992. Earnings per share of 3.45p reversed an 83p loss. There was no dividend.

Mr Brooke said the company planned to repeat the 500 house sales a year it achieved during the boom, though it would take several years. Last year it completed 188 houses, 23 more than in 1992.

Following an pounds 850,000 reduction in operating costs, principally construction expenditure, gross margins improved to 20 per cent.

After land purchases costing pounds 2.3m, borrowings rose pounds 3.5m to pounds 25.6m. A debt-for-equity swap, agreed in January 1993 and involving the conversion of pounds 35m of borrowings into shares, reduced interest payable from pounds 6.2m to pounds 2m.

The shares closed 1p higher at 29p.

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