Property company returns to profit

IRISH-controlled property development company China Real Estate Opportunities returned to profitability last year and saw the value of its property portfolio increase by 4%.

The London-listed firm is mainly owned by Irish developers Treasury Holdings and has its focus on the Chinese market. It made a pre-tax profit of £20.12 million (€22.32m) last year, a turnaround from a pre-tax loss of £68.52m in the previous year.

The company’s overall property portfolio was valued at Chinese yuan9.19 billion (just under €1bn), up by 4% in local currency terms since the halfway point last year and up 7% in sterling.

Net asset value fell by 14% during the year, on the back of adverse currency movements, but the second half of 2009 saw the net asset value rise 7%, on a year-on-year basis.

The sale of the company’s 50% stake in the Tangdao Bay joint venture development and the disposal of the Treasury Building in Shanghai were key developments last year, both adding to the company’s cash holdings – which reached £80m by the end of the year.

Company chairman Ray Horney said the financial position of the company has been considerably strengthened and the board remains confident about the outlook.

“Last year was an important year, as the company successfully applied its asset management expertise to deliver strong results in a competitive market, while also positioning the company for the future,” he added.

In a new fundraising effort, the company has also announced a tender offer to all shareholders to buy shares in the company at £3.30 each; adding that it will commit a maximum of £15m from its own cash resources to repurchase tendered shares.

Mr Horney added: “The board is very pleased with the portfolio’s strong operational performance during the year, as well as its strengthened cash position and believes the company is now well placed to address its capital structure through the tender offer and its proposed Asian listing this year.”