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Asset growth at Gresham

Article Date:  Apr 19 2007

Property and early-stage investment trust Gresham House increased net assets 16 per cent last year.

The market value of fully-listed Gresham’s property portfolio rose by £6.3 million to £40.5 million in 2006 and the value of the trust’s investment securities increased by £571,000 to £13.3 million, while profits rose 378 per cent to £670,000. Chairman Fred Stirling said Gresham has agreed to sell a site in Vincent Lane, Dorking, which is in the books at £2.9 million to ‘a leading residential development company’ for £8.2 million, subject to obtaining residential planning permission.

Last year, Gresham paid ‘a nominal consideration’ for a 35 per cent equity stake in an 11-acre site at Speke Boulevard in Speke, next to the company’s existing 18-acre site. The company has an option to increase this stake to between 52 and 55 per cent within the next two years if it can arrange the refinancing of a £1.8 million loan to the joint venture company.

Stirling says Gresham intends to seek planning permission for change of use at these two Speke sites to ‘A1 Retail’, which, if granted, will provide ‘a very significant increase in value’. Looking ahead, he added that the company is ‘looking forward’ to ‘increased performances from a number of our AIM-quoted investments’ and the introduction of three unquoted investments onto PLUS Market or AIM.

One fly in the ointment is Parkwood Property Group LLP, which bought 29.9 per cent of Gresham last November. Stirling and his board want to demerge the trust’s property holdings into a tax-efficient real estate investment trust, but that would require 75 per cent shareholder support and Parkwood has made it clear it would block the change.

Gresham’s shares, which rose from 310p in January 2004 to 752.5p last January, are 37.5p up today at 682.5p, valuing the company at £33.3 million. There could be more action.

This story is from Growth Company Investor, the independent voice on fast-growing companies. Subscribe today for the latest AIM recommendations.

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