March 2008
Humberts announce £17 million loss
By MIKE GOODMAN,
City correspondent |
THE troubled Humberts Group unveiled
a £17 million loss
and revealed plans to ask shareholders for more funds and the possibility of
selling some ‘non
core’ assets when their 2007 full year results were finally announced.
The 2007 figures relate to the 12 months ending September 30, but executive chairman
John McLean warns current market conditions are expected to result in a trading
loss for the first half of 2008.
The 2007 losses stem from a massive £18.4 million write down of goodwill
on the firms it had bought during the year. This dragged the group into a £17
million pre-tax loss, against a £1 million profit for 2006.
Without the write off, the group would have made a record £4.1 million
pre-tax profit, compared with £1.8 million in 2006.
Earnings per share without the write offs were 4.8p. But once the write offs
were counted, there was a loss per share of 31.4p. Needless to say there will
be no dividend.
Business boomed in early 2007, according to Mr McLean, who said: “The first
half to March 31 2007 exceeded expectations. But the end of June proved a decisive
dipping point, as the US sub prime crisis began to bite, the Northern Rock crisis
followed, and Home Information Packs were introduced.”
Last year, Humberts tried to diversify from dependence on estate agency, developing
and acquiring other property-related businesses such as commercial, rural and
land agency, valuation, fine arts and an architectural practice. Such acquisitions
helped turnover more than double to £32 million.
The estate agency share of turnover fell to 55 per cent during 2007 and has since
dipped to 46 per cent.
The acquisition strategy is now on hold, the group’s strategy is “under
assessment” and some non-core assets may be sold, said Mr McLean. This
poses an obvious question as to whether Humberts will be shedding offices and
staff. Last year it ran 80 offices and 715 staff.
The fund raising, probably through a rights issue, is needed to pay instalments
to the owners of firms Humberts acquired last year. About £1.7 million
worth is due during the current financial year ending September.
The good news for shareholders is that talks over a possible bid approach continue
and that Mike Nower, former Countrywide finance director, has joined the management
team.
Shares in Humberts, which are listed on the Alternative Investment Market, eased
to 11p on the announcement.
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