City Realties begins well

Press, 10 February 1981, Page 20

City Realties begins well

City Realties. Ltd, the property associate of Brierley i Investments, Ltd, expects I “another substantial increase ,in earnings for the year to iJune 30.

1 City Realties began the year well, with a 51 per cent jump in profit — from $63,060 to $95,020. The interim dividend has been raised from 9 to 10 per cent; it is free of tax.

The tax provision rose almost four-fold, from $6241 to $24,222, but depreciation fell frorh $10,584 to $7319. The directors said that the fall in the depreciation charge for the half year was because of a change in accounting policy relating to depreciation on investment properties, revealed in the 1980 annual report.

| The changes resulted from ia decision to adopt a policy iof revaluing the company’s property portfolio. j The company has decided to progressively revalue in-

vestment properties after i rent reviews, using the directors’ estimate of their value supported by an independent registered valuer’s market assessment. The result was the change in depreciation policy as it would not be possible to revalue properties and depreciate them at the same time. Consequently, the depreciation provision on investment properties has been done away with.

The directors forecast "another substantial increase in earnings for the full year, arising from realised capital gains together with the nor-

mal rent reviews and property management fees.”

Dividends would continue to be paid from the share premium reserve, and the company’s capacity to do so “will continue for some years,” the directors said. City Realties increased its profit 50 per cent, from $92,491 to $139,164, last year, and in addition earned a $911737 capital profit making earnings $230,901. The company has a capital of just under 8 million 10c shares, of which Brierley Investments and the National Insurance Company each hold 2 million.