News

Hawtin slumps into red, takes fair value hit

07 May 2008 14:15:00

Welsh property development and investment group Hawtin fell into the red in 2007, with losses made worse by revaluation deficits.

The group recorded a pre-tax loss of £5.54m in 2007, compared with a profit of £0.4m in 2006. Revaluation deficits accounted for £4m of the 2007 loss, as the new accounting standards obliged the company to value investment properties at fair value.

The group said it expects the long-term return from the revalued assets will see the deficits ultimately reversed but the mark-down in the valuation of some of them did result in Loan to Value covenants being breached; the group rectified this by renegotiating its funding arrangements with its bankers.

Cash in the bank at the end of 2007 stood at £4.4m, boosted by the deferred consideration of £3.7m from the sale of Hawtin Park. In 2008 the company has paid the deferred consideration of £1m relating to the acquisition of Crown Investments Limited, which it said will reduces its interest costs in 2008.

Revenue from continuing operations rose to £3.29m from £1.1m in 2006, while gross profit grew to £3.0m from £1.1m.

The company has not declared a dividend for 2007.

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