Chairman’s advice

Press, 20 July 1984, Page 8

Chairman’s advice

PA Wellington Shareholders in Robt Jones Investments, Ltd, should not sell their shares, but build up their holdings, says the chairman, Mr R. E. Jones, in the annual report. “That advice has proven sound in the past with this company. It will be even more so in the future.” From its formation in 1982 the company has progressed rapidly and its original $lO million flotation capital has grown, into a S4OM asset. “As we grow it becomes easier and we are confident of continuing a rapid rate of expansion.” Over all, the profit of $4,948,000 is highly satisfactory and current minimum projections show the company maintaining the first year’s growth notwithstanding the absence of a traditional free market economy. Since April, 1983, the company had acquired or contracted to purchase 18 further buildings at a total cost of $18,422,000 — “an impressive rate of acquisition growth by any standards.

“The current year will see the fruit of this widened ownership reflect more fully in its results. “We are confident of achieving, indeed increasing, this rate of expansion. We have yet to make a purchase we regret or have any reservations about,” Mr Jones says. He says it is appropriate for property companies to revalue their assets and to include any gains in their earnings results. “Property companies are asset growth rather than income growth in their orientation and the regular revaluation of assets reveals to shareholders the astuteness or Jack of same of purchases and the progress of the company,” he says.

“Sizeable revaluations point the way to future rental returns as obviously rentals will in the course of time reflect those values,” he says.

In the light of the many new listed property companies and the likelihood of increasing suspicion from financial commentators arising from differing revaluation practices, Robt Jones Investments will take an approach that can not possibly be criticised and which will be praised, Mr Jones says. The company will value the entire portfolio annually, the valuations to be' done by diverse independent registered valuers. To date the company has revalued less than half its portfolio. The current year’s accounts and thereafter will include a total portfolio revaluation. In respect of cost the company will incur a onceonly valuation cost with each purchase, Mr Jones says. The substance of the work will thus have been done, and only a nominal fee will be paid for annual revaluations.