Diverse Cheshire-based property group Pochin reported a £4.4m loss in the six months to the end of November 2009 due mainly to persistent void levels in joint venture developments that it now wants to exit.
John Moss, chief executive of Pochin's, told Place talks were ongoing with various parties to sell joint venture stakes in unnamed large developments where values have fallen.
Moss and chairman Richard Fildes, in his statement to the London Stock Exchange today, declined to name the developments where an exit was desired while talks were at a delicate stage. Among the firm's high-profile JVs are Exchange Flags in Liverpool with UK Land & Property and Manchester Technopark, a joint venture between Manchester Science Park and Pochin.
Fildes said in his statement: "A re-assessment of value of one of the large jointly held development sites has been necessary and, in another location, Pochin's is being required to support a joint venture where continuing voids in a completed development are proving painfully persistent.
"Write-downs associated with the joint ventures referred to above account for almost all of the loss reported for the period."
Revenue for the six months was £47.5m, compared to £49.9m in the same part of 2008. The loss before tax of £4.4m came after property related impairments of £4.23m. In the first half of 2008 the group reported £0.6m profit. Net assets reduced from £48.6m in November 2008 to £33.7m 12 months later. Net debt reduced by £1.6m in the period to £26.8m.
Moss and Fildes said the talks with unnamed parties over JV exits should be concluded prior to the financial year-end at the end of May 2010.
On the construction side, the 'subdued levels' of activity and 'weakness in the occupational market' continue. Fildes added: "In this context it is good to report that the construction division has performed well during the period. In particular, large projects at Widnes, Cheshire and at Chester have achieved satisfactory completions. No improvement in the concrete pumping market can be reported and the group continues to sustain damaging losses from this activity. In the small residential division, the group continues to realise its investment in both built houses and housing land. The recent exceptional weather conditions have exacerbated the weakness in construction activity such that the group's trading divisions are unlikely to show an improvement in the second half of the year."
Fildes went on: "After such a dramatic collapse in the values of commercial property combined with the well publicised contraction in available credit for the industry, it is difficult to forecast an early return to the levels of development and construction activity of two years ago. Nevertheless, some improvement is perceptible and Pochin's remains well placed to benefit from it."
No interim dividend was declared. Shares in Pochin were down 10p to 75p at 11am, valuing the business at £17.68m.