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Brixton axes dividend and posts loss

James Thompson
Tuesday 17 March 2009 01:00 GMT
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Brixton remains in talks to raise additional capital to bolster its balance sheet, Britain's largest owner of warehouses said yesterday, as it axed its final dividend and posted a huge loss from tumbling property values.

Peter Dawson, Brixton's newly appointed chief executive, said: "Given the current economic conditions and the outlook for financial markets, we continue to explore all options to strengthen the balance sheet and provide additional financial flexibility, including potential disposals, debt renegotiation and an equity raising."

A number of the UK's largest property companies, including Hammerson and Land Securities, have already unveiled plans for rights issues this year to repair their balance sheets.

Brixton, which ousted Tim Wheeler as chief executive earlier this month, warned that if property values fell a further 10 per cent from December levels, it would breach a banking covenant on its debts of £862.2m. It posted a pre-tax loss of £768.8m for the 12 months to 31 December, after a writedown in its property portfolio's value of £673.4m. Its net rental income rose by 6.8 per cent to £77.4m. Brixton's 2008 dividend will be limited to an interim payment of 4.9p.

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