Ainscough takes on Langtree’s Spring Gardens debt

A one-off cost relating to the sale of speculative office building 40 Spring Gardens dragged Langtree into the red in the year to the end of June 2009.

The 100,000 sq ft city centre office in Manchester was sold to Bill Ainscough, chairman and majority shareholder in Langtree, for £387,000 cash and £23.2m in cleared debt. The sale incurred a cost to Langtree of £2.1m in loan cancellation fees.

Results filed at Companies House also reveal Langtree paid £400,000 for the 50% stake in the Liverpool Festival Gardens development held by joint venture partner David McLean Group. A new company was formed, Langtree Festival Gardens, which now owns 100% of the development.

The fall in value of the Garden Festival site, the one-off costs of selling 40 Spring Gardens and restructuring loans between Ainscough and his company produced an overall group pre-tax loss of £1.3m. Underlying operational activity showed a profit before tax of £1.1m.

Langtree saw its net asset value fall 34% from £120m to £78m at June 2009. Borrowing remains "solid" at 45% loan to value. Net debt at year-end was £76.3m, down from £95.3m the year before. Langtree's main facility is with Lloyds Banking Group, following the takeover of HBOS with which it had banked. HBOS is also a tenant at 40 Spring Gardens.

Bill Ainscough said in his chairman's report: "Post year-end we have seen some improvement in property values and more trading activity pointing to a small recovery in the market. Whether this is sustainable depends on the wider performance of the economy going forward."

Langtree owns 4m sq ft of commercial property across the North and Midlands with 1,000 tenants generating a rent roll of £19m.

The group employs 40 administration staff and eight directors, both of which were unchanged during the year. Directors' remuneration, including pay and pensions, totalled £527,000, down slightly from £545,000 in 2008.

Langtree started work on site at Festival Gardens in recent weeks and hopes to begin with the St Helens Rugby League stadium shortly.

Ainscough added: "Overall our approach going forward will remain a cautious one. We are in a sound financial position and we will continue to focus on growing our property portfolio where opportunities arise and furthering our development positions in line with the market to create value in future years. Also we will continue to look to secure new opportunities where they will fit well into the business and where we can add value."