Quintain to Focus on London Property as It Reports £29.1m Half-Year Loss

on Nov 27, 2012
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**Non-Core Assets Drag on Quintain’s Half-Year Performance**

On Monday, UK property development firm Quintain Estates & Development (LON:QED) reported its half-year earnings results. The London-based company posted a pre-tax loss of £29.1 million for the six months to September 2012, compared to a profit of £3.7 million in the same period a year earlier. According to The Financial Times, during the first half of the financial year, Quintain was hit by a £24.6 million revaluation markdown and a £9.7 million loss on the sale of non-core assets, as weak property markets outside the UK capital dragged on the firm. Following the interim financial update, Quintain’s share price fell 3.7 per cent to 52 pence, the paper further reported.

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Commenting on the company’s performance, Quintain’s chief executive, Max James, said: “Non-core regional assets are losing value…if you look right across the market you are seeing a real distinction between the performance in London and the rest of the regions.” According to Mr James, regional property “only accounts for around 10 per cent of the portfolio but there has been a bit of a drag on the valuation.” Revealing the company’s future plans, he added: “We are making the statement to the market that we are increasing our focus on London.”

**H1 Loss Triggers Focus Shift**
After reporting its weak half-year performance, Quintain is now determined to change its market strategy. The company announced yesterday that it is aiming to cut its debt below £400 million by March 2014 and to generate about £150 million from property sell-offs of non-core assets. Proceeds from the sales will be spent on developments in the Greenwich Peninsula — one of London’s biggest housing projects, set to deliver 10,000 homes on a 150 acre site on the south side of the river Thames – and a £2.5 billion development in Wembley, where a Hilton hotel and student accommodation recently opened and a designer outlet shopping centre is being built.

In regards to these flagship development projects, Mr James said: “Our focus is now firmly on driving delivery at our two outstanding London schemes.” Highlighting that the group’s new focus will enable it to provide value for shareholder in the years ahead, the real estate company’s CEO added: “We are repositioning Quintain to become a leading London development and investment specialist.”

**Growing Momentum Behind Greenwich Peninsula**
!m[Property Developer Funnels Resources into Greenwich and Wembley Schemes as Regional Property Hits Profitability in H1](/uploads/story/910/thumbs/pic1_inline.png)On Monday, Quintain did not only report its half-year results and announced narrowing its focus to its two flagship London development schemes, but it also submitted three applications for detailed permissions for the first 500 of the 10,000 homes it proposes to deliver on the Greenwich Peninsula in London. The developer also said that it has agreed a revised memorandum of understanding with the Greater London Authority on the delivery of homes on the site.
The previous memorandum covered the delivery of around 1,300 homes on five plots, but the new document covers 11 sites which are planned to provide 2,870 homes. According to Quintain, the revised memorandum reflects the investment deal with Knight Dragon, a Hong Kong based private investment vehicle of billionaire Henry Cheng Kar-Shun. Since the joint-venture deal was made in June this year, momentum behind the Greenwich scheme development has been growing due to the Hon Kong firm’s cash injection of £150 million and its £300 million credit facility for the project.

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