News blog
West Pioneer Properties Ltd
- BY: Andrew Hore |
- POSTED: 21/07/2010 |
Indian shopping mall developer West Pioneer Properties Ltd increased its income from its Kalyan site but revaluation gains were not as high in the year to March 2010.
Property rentals and other operating income improved from $2.59m to $3.27m. Interest income was flat but the revaluation gain more than halved to $3.9m. Total revenues fell from $12.3m to $8m. The reported profit fell from £6.38m to £3.04m with lower operating expenses helping to limit the decline.
The Kalyan mall is still 65% leased because West Pioneer has found it difficult to find the right tenants at the right price. It is looking for lifestyle retailers and department stores. Numbers visiting the mall have more than doubled to 4m in the recent six month period. Management argues that they are also more affluent because a greater number are visiting by car.
Sales of residential units are going well and nearly two-thirds have already been sold.
West Pioneer could make $17m profit from the residential development but it will not be able to recognise any revenue or profit for two or three years. The value of the residential property is around $76 per square foot, which is around one-third higher than early estimates.
There are also new plans to develop offices on 68,000 square feet of the site.
Ajay Gupta was appointed chief executive in March.
Net bank debt was $3.63m at the end of March 2010. Prepayments for the residential units have helped the cash position.
At 21p a share, West Pioneer is valued at £16.8m. The NAV is $63.3m, so the shares are trading at less than half that level.
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