News blog
Speymill
- BY: Andrew Hore |
- POSTED: 22/09/2008 |
Speymill says that problems with its contracting business mean that its full year profits will be around 35% lower than originally forecast.
House broker Lewis Charles Securities had forecast profits of £4.06m. It looks as though the outcome will be nearer to £2.6m.
Speymill is a property and asset manager but the majority of its revenues come from a construction business that refurbishes and fits out budget hotels. The company had already warned that one of its budget hotel clients had deferred some of its investment. A developer went bust and that landed Speymill with a £600,000 bad debt.
The latest disappointment relates to contracts where costs have been much higher than expected due to structural and other problems. The contracting business lost £157,000, including the bad debt, in the first half of 2008. It also contributed £25.1m of group revenues of £35.3m.
Speymill manages two Aim-quoted property investment companies: Speymill Macau Property Company and Speymill Deutsche Immobilien Company.
Speymill received a £1.66m performance fee from Speymill Macau. That took asset management turnover to £5.5m, while property management generated £4.75m. Nearly all the £3.43m profit in the first half of 2008 came from asset management because it is the highest margin business.
Net debt is £749,000.
Speymill believes that the Far East will continue to offer growth prospects for the asset management business.
The shares fell 3p to 26p each. That values Speymill at £16.9m.
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