Shares digital

Brixton (BXTN) – Finals PTP: £58.2m (£205.1m) Divi: 8.8p (7.9p)

Although pre-tax profits fell heavily to £58.2 million and net rental income slipped 8% to £72.5 million, adjusted net asset value per share was above analyst expectations, rising 2.1% to 545p.

Brixton has benefited from its decision in 2006 to sell most of its secondary property and to look selectively at making prime acquisitions in its core markets of west London and Trafford Park in Manchester. Last year, the company bought £212 million of property, and rental growth has been encouraging. Brixton’s rental growth as measured by its valuers was 5%, looking impressive against the 1.2% benchmark highlighted in Investment Property Databank’s UK Industrial Index.

However, chief executive Tim Wheeler has cautioned that the group is not immune from ‘wider market influences and the ongoing uncertainties in the global credit markets’. He has also warned that occupational demand could be hampered by slowing growth rates and availability and pricing restrictions on finance.

Going forward, the group points to another problem faced by the sector – the withdrawal of empty rate relief which will result in owners and tenants of vacant commercial property being liable for full rates from 1 April. This is expected to have a ‘detrimental’ effect on its earnings which it estimates will be in the order of £5 million for 2008. However, Wheeler stresses that the company’s ‘deliberately chosen modest gearing position and our unsecured funding strategy’ gives it financial flexibility to react quickly to new opportunities and is confident about future prospects. The shares responded positively, rising 3% to 330p.

Shares says: The shares are ticking up again but for now the stock remains a hold.

by: Rachel Robson