Local Shopping dives on full-year loss and reduction to NAV

4th Dec 2013 10:09

Local Shopping, a real estate investment trust, saw its share price plunge around 15 per cent on Wednesday after posting a pre-tax loss for the year ended September 30th, along with a significant reduction in its net asset value (NAV). The loss for the 12 month period totalled £6.07m, down from £9.17m in the previous year, while its NAV declined from £41.3m to £33.6m year-on-year.The value of its directly owned portfolio fell from £177.2m to £168.9m, while on a like-for-like basis the portfolio valuation decreased from £176m to £168.9m. During the year the company adpoted a new investment policy, under which it withdrew from fee based asset management activities for joint ventures and third parties and disposed of its interests in its joint venture with Pramerica Real Estate Investors and its investment with Schroders.Going forward, the firm plans to identify priority properties for sale, target likely purchasers, carry out its sales programme in a manner that does not incur unnecessary debt finance breakage costs, and continue to optimise the portfolio value and recurring profits. It now anticpates future cost savings of £0.9m per year as a result of its review. "An improvement in institutional investor sentiment seems likely to translate to increasing interest in assets outside of central London, placing some downwards pressure on yields for assets in good locations within affluent markets - predominantly in the south east," the group said. "The outlook for the retail sector continues to be mixed. Despite the economy starting to show signs of a meaningful recovery it will take time before this filters through to real wage growth for consumers, meaning that comparison retailers will remain under pressure." NR