McKay cuts value of its properties

McKAY SECURITIES, the property company which recently secured new banking facilities, has written off pounds 18.3m, or 17.5 per cent of the value of its properties. A March revaluation reduced net asset value per share by almost 29 per cent to 159p.

The bank refinancing cost McKay pounds 686,000. With its developments complete, it no longer capitalises some of its interest payments, which consequently rose from pounds 3.3m to pounds 3.9m in the year to 31 March. This cut pre-tax profits from pounds 3.2m to pounds 1.8m.

McKay largely weathered the recession until last year. But a shopping development at Aldershot, Hampshire, and office blocks in Staines, Middlesex, and Bristol have remained largely unlet. The company had to cancel its interim dividend because of banking constraints.

Eric Lloyd, managing director, said interest in McKay's unlet properties had picked up in recent weeks. A fifth of the Aldershot development is let and Mr Lloyd has hopes of further lettings. But the Bristol offices are attracting little interest.

McKay is paying a final dividend of 3.5p against last year's 6.7p. The company has borrowings of pounds 38.5m and net assets of pounds 44.4m.