Wellesley sees better ahead

Press, 26 September 1989, Page 21

Wellesley sees better ahead

Wellesley Resources, the Wellington-based property group, is expecting more income and lower costs in the current 12 months after announcing a $77,000 total profit for the year ended June 30.

In the 15 months ended June 30 in the previous period, the company incurred a total loss of $151.3 million, including extraordinary losses of $125.1M from goodwill written off, losses on the sale, or write-down, of property and equity investments, and losses on the sale of projects. Wellesley’s chief executive, Mr Tom Huppert, said that the group had achieved its key objectives of restructuring its balance sheet and more efficient management of the commercial property portfolio. On an annualised basis the increase in the company’s rental income was 31 per cent. Also contributing to the return to

profit was the reduction in costs and interest expenses. The group’s articles required it to have the property portfolio revalued annually by independent valuers. In the latest valuations, the company property portfolio was reduced about S44M. Based on the independent property portfolio, the net asset backing a share had fallen from 78c to 53c. Shareholders’ equity improved from 43.7% to 46% of total funds employed. Among actions taken by the company during the year were: • Sale of non-property and unessential property holdings for cash. • Completion of two

new buildings (Auckland Club and Sofrana House, Auckland), and sale of a building (Wellesley Tower, Auckland). • Acquisition of CPD House, Wellington, for scrip. • Reduction of in-terest-bearing debt by

SS4M. • Restructuring of the remaining debt more efficiently. • Achievement of significant trading cost reductions. No dividend has been recommended by the directors.

Wellesley Res. audited result for year ended June 30 1989 12 mths ($000) 1988 15 mths ($000) Rental income 12,346 11,769 Other income 114 3755 Gross revenue 12,460 15,524 Pre-tax profit 77 (25,399) Taxation — 723 Net trading result 77 (26,122) Minorities —— — Group net result 77 (26,122) Extraordinaries — (125,146) Total result 77 (151,268)