Hambro to sell part of legal subsidiary

HAMBRO Countrywide, the estate agency chain, is selling 49 per cent of its legal protection subsidiary to Hambros, the merchant banking group that controls 52 per cent of its shares.

John May, joint managing director, said the sale was designed to crystallise some of the value in Hambro Legal Protection, which sells specialist insurance services. It made pounds 1.8m pre-tax profit in 1991 and had net assets of pounds 2.3m. The sale will produce a pounds 7.5m profit and halve borrowings to pounds 9m.

That will strengthen the balance sheet in preparation for developing the group's relationship with Guardian Royal Exchange. The original agreement between the two ends next year, and Hambro is planning to take on more of the administration of the insurance policies as well as reducing the amount of reinsurance placed with GRE. That will enable more of the profits to be retained within the group.

The announcements came as Hambro revealed that its loss for the six months to June rose to pounds 4.6m from pounds 4.3m the previous year. The number of houses sold fell from 20,672 to 19,920 while average prices dropped 7.6 per cent to pounds 65,600.

The group is setting up a separate division to manage and sell repossessed houses on behalf of building societies. The loss per share was 1.41p (1.3p) and there is again a nominal 0.05p dividend.