Warner reports falling NAV but stable profits

Warner Estate Holdings, a major owner of shopping centres, industrial estates and offices across the North West, today reported a drop in its net asset value in a watchful trading statement.

Warner's stakes in the Ashtenne Industrial Fund, a co-investor in the Space Northwest joint venture with the North West Development Agency, and Apia Regional Office Fund, which owns offices in Preston and Manchester city centres, saw a fall in net asset value in the six months to 31 March 2008 by 36p per share to 766p of which 15p came in the last three months.

A disposal programme generated £16m, with a "satisfactory" profit of £3.3m over March 2007 levels, Warner said.

Debt, following payment of the interim dividend and repayment of £2.7m in loan notes, stood at £350m on 31 March, down from £366m at the end of September.

Warner's statement said: "The group continues to comply with all banking covenants and to maintain sufficient headroom within its facilities to meet ongoing working capital requirements. Earlier this month, the £150m loan to the Agora joint venture with Bank of Scotland was rolled for a further two years, and the entire loan has been hedged at around 4.34%."

The North West-focused Agora shopping centre fund owns the 360,000 sq ft Fishergate centre in Preston; 320,000 sq ft Market Place and Hall in Bolton; 110,000 sq ft Cavern Walks, Liverpool; 272,300 sq ft Middleton in Greater Manchester; and Birkenhead's 613,000 sq ft The Grange and Pyramids centres.

The statement continued: "Outward movement in yields appears to have slowed during the quarter to March although the group remains cautious due to continuing uncertainty in financial markets. Nevertheless, revenue continues to improve, with the group achieving estimated rental values on reviews and renewals, and the latest cut in base rate will reduce the group's annual costs by around a further £0.5m."

Warner's shares were down 2.5p at 267p by mid-morning.

The group intends to announce its preliminary results for the year ended 31 March 2008 during the week commencing 9 June 2008.

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