Manchester-based serviced office operator Your Space reported a leap in annual turnover but a fall in underlying profits and a restructuring of the business as it copes with the "volatility in the financial markets".
In the 12 months to 31 March 2008, turnover at the 10-unit group increased to £11.075m, compared to £2.157m in 2007, as construction services were brought in-house. Profit before tax was £1.121m, against last year's £5.245m of which £3.634m related to the one-off profits from the disposal of investment properties, leaving a comparable profit of £1.611m for 2007.
The AIM-listed group said net assets at year end were £6.603m, or 30p/ordinary share compared to £5.957m or 31p/share at 31 March 2007.
Shaun Mealey, chief executive, said: "In view of the volatility in the financial markets we changed the emphasis of our business model last year to ensure we could meet these challenges whilst at the same time we wanted to continue to grow our portfolio.
"These changes focused on securing restoration/construction contracts on prime buildings in city centres facilitated by our solutions division and converting these to serviced offices. We also introduced our new fledgling virtual/web hosting business this year. We now have three divisions within the group: restoration/construction, serviced office/conferencing, virtual /web hosting."
In previous years the group disposed of freehold assets and leased the buildings back. The group retains freeholds in Sheffield and Glasgow and would consider further freeholds if the fundamentals were right, Mealey said.
Two new serviced office centres opened post March 2008, in Newcastle-upon-Tyne and St James's Court, Manchester. A conditional exchange has also been agreed on a site in Leicester city centre.
Mealey added: "To summarize we have acted swiftly to meet the challenges in this present economic cycle and have adapted our business to suit. We intend to take full advantage of the market conditions that prevail today and keep our expansion plans on course."
Your Space solutions division is currently undertaking contract values of over £4m to carry out restoration work, Mealey said.
The company's first centre opened at 23 New Mount Street, Manchester, also its head office, two years ago. It operates Il Palazzo on Water Street, Liverpool.
Manchester New Mount Street has seen average income from each tenant increase from £8,500 a year two years ago to £20,000 a year today. Mealey said the lower ground space has been improved and the firm will shortly be embarking on a further upgrade of 11,000 sq ft of space in the upper floors, creating capacity for a further 33 clients.
Under an agreement with NTL/Cisco, tenants are offered free telephone use inclusive with the rent. The trio have since launched a virtual office platform, on trial in Liverpool and Manchester.