Workspace targets further

Workspace Group plc said it is confident of reporting another year of growth in earnings and NAV during 2004, and is planning £60m worth of acquisitions.

The provider of flexible business accommodation to small and medium sized enterprises (SMEs) announced pretax profit on trading operations in the third quarter to December rose 14 pct to 10.26 mln stg from 9.0 mln the year earlier.

Turnover came to 13.21 mln stg, up 16.4 pct.

Overall occupancy was stable at 83 pct; excluding developments, occupancy was 87 pct.

Commenting on the results, chief executive Harry Platt said Workspace has continued its consistent progress during the quarter.

'Our programme to maximise value from our estates is very active, with a number of properties affected by refurbishment and planned disposal.

'This has a short-term impact on occupancy and rents due to voids but in time will deliver significant value enhancement through increases in rent and improved asset values.

The company said the the market was subdued throughout 2003.

However, it added that it is only a few weeks until the financial year end and the group is confident of reporting a year of continued growth in both earnings and net assets per share.

'At the same time, with the benefit of our new investments, the completion of refurbishment schemes, and with improvements in the economy, our platform for growth in future years looks promising.'

The company expects occupancy levels to improve, albeit slowly, towards 90 pct by the Spring of 2005.

Each 1 pct improvement in occupancy should give rise to almost 0.4 mln stg per year in extra income, it said.

Average rents have also remained broadly stable throughout the period and are now 8.36 stg per sq ft. The company anticipates that significant improvements in average rents will arise again once like for like occupancy levels regain the 90 pct level, which is unlikely to be before 2005/06.

'We anticipate announcing further acquisitions and disposals before the year end,' Platt said.

In addition: 'Investment sentiment for our sector remains good, yielding the prospect of further good capital growth in our asset values.'

Source: Freeman News

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