News blog

Toye

• BY: Andrew Hore |
• POSTED: 29/01/2013 |

Shares in medals and trophies supplier Toye & Co have risen 55% to 58p following the announcement that it is selling its London property for up to £3.25m.

A developer is buying 19-21 Great Queen Street for between £2.75m and £3.25m depending on planning consent. Toye shareholders have to agree to the disposal. The developer will loan Toye £2.5m at 3.75 percentage points above base rate. The developer will take a legal charge over Toye’s leasehold interest in the property - there is a 999 year lease over the majority of the property that commenced on 17 August 1984.

The disposal appears to mark a change in strategy. At the time of the interims in September Toye said: “The redevelopment of the Great Queen Street site is nearly complete with a new tenant for the large ground floor and basement retail areas, and the refurbishment of the first and second floors that we are retaining for our own use. We will shortly be inviting customers to come and visit the new Toye Club Room, and our improved corporate sales offices.”

In the 2011 accounts, Toye stated that it thought that the land and buildings exceeded their book value by £850,000. Long leasehold property was valued at £894,000 and freeholds at £909,000. This suggests that the London site will be sold for more than the board’s valuation of all the company’s properties at the end of 2011.

The London manufacturing facility has been underutilised. Toye will have at least six months to look for another London site from which to supply Masonic and other customers. There should be cost savings from a move but it should not hamper the business. Current trading is in line with expectations. Underlying sales have been falling but a large contract helped boost profit in the first half of 2012.

Two directors of the developer Robin Edwards and Robert Luck, are joining the Toye board.

Toye is valued at £1.3m and it currently has debt of £1.5m. NAV was £1.22m at the end of 2011 and this increased to £1.75m at the end of June 2012. The NAV may have fallen back since then but adding on any profit from the disposal would mean that the shares are trading at a discount to NAV.

Last September, Noble Investments boss Ian Goldbart increased his stake in Toye to 4.9%.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFJanuary2013_40.pdf