Pre-tax profits fall for A & J Mucklow
Halesowen property group A & J Mucklow saw pre-tax profits fall for the last six months of 2018.
They were down from £29.9 million a year before to £17.2m, although the value of its property portfolio rose from £433.5m at the end of June to £443.3m.
Chairman Rupert Mucklow said it had been another good performance by the group.
"Occupancy levels have remained high and our rent roll has continued to grow, mainly on the back of re-letting space and achieving higher rental levels, particularly from our industrial and logistics properties. This has resulted in further improvements in underlying pre-tax profit and net asset value per share," he added.
Underlying pre-tax profit, which excludes revaluation movements and profit on sale of investment and trading properties, was £500,000 higher at £8.5m.
The pre-tax figure included a revaluation surplus of £8.7m compared to £14.1m and profit on disposal of investment properties of £7.7m for the last six months of 2017.
The directors declared an interim dividend of 10.48p per ordinary share, an increase of 3% over last year.
The group's occupancy rate at the end of 2018 reached a record high of 97.6%.
"The level of enquiries for our existing industrial and warehouse space in the Midlands remained steady during the first six months of our financial year, despite uncertainty over Brexit. However, occupiers with unsatisfied requirements have become noticeably more cautious about committing to future long-term developments on a pre-let basis.
"Property yields and values also remained stable in our first half year. We did not acquire any investment properties, but started to see a reduction in the number of investors competing for industrial property and a few more opportunities becoming available.
"However, our main focus during the period, was actively to manage our industrial assets, to grow rental income and to commence the first phase of development at Mucklow Park, Tyseley, Birmingham," said Mr Mucklow.
Industrial and logistics properties represent approximately 70% of A & J Mucklow's total property investment portfolio, with a current value of around £300m.
It owns 3.2m sq ft of predominantly modern industrial and warehouse space, mainly located in the Midlands and built in the last 25 years.
"Our industrial and logistics properties have benefited from steady rental growth over the last couple of years and we expect to achieve further rises in estimated rental values, as we continue to set higher rental levels on new lettings, rent reviews and lease renewals over the next five years," added Mr Mucklow.
The board announced some changes at executive director level in November, as part of our succession planning for the business.
Mr Mucklow is starting relinquishing his day to day duties, having served 24 years as an executive director, the last 15 years as executive chairman, running the group jointly with managing director Justin Parker, who has now left the company.
The board is looking to recruit a CEO who will combine both Justin’s and Mr Mucklow's executive roles and bring new skills and opportunities to the business.
Mr Mucklow has taken on the role of managing director, in addition to executive chairman, until a new CEO has been appointed and has settled in, after which he will assume the role of non-executive chairman.
"Justin and I have enjoyed working together for the last 15 years and are both proud of what we have achieved, but the board feels that now is the right time to restructure our management team and prepare the group for the longer term. My thanks go to Justin for his loyal service and contribution made over the years and I and the board wish him every success for the future," said Mr Mucklow.