Hawtin Close To Hitting The Rocks As Md Readies A Lifeboat
In it's H1 report today, Hawtin Plc the Cardiff-based landlord and developer
, said it had just achieved it's target of getting voids, which had been 41% down to 10%, but it's gross profit of 1.8 million was wiped out by bad debts, revaluation losses and bank charges to such an extent that it made a 11.9 million loss.In his statement Bob Carlton-Porter, the Chairman said:
"These are not a set of results that your board is at all comfortable with, particularly as the efforts of increasing lettings and cost reduction are totally masked by higher finance costs and provisions. Trading our way out of what has been and continues to be an extremely difficult market has been draining and dispiriting with pressures on funding, tenant defaults and very little comparative data in the regions on which to base fair valuations."
Hawtin is in default of it's LTV covenant to Lloyds Banking Group on it's 28 million debt to them, and has been for some considerable time. It is servicing the debt fully and no doubt Lloyds does not think it could get any more out of the business than it's present management is. A similar situation exists with the owner of the trophy Millennium Plaza in Cardiff, the Jersey based subsidiary Crown Investments, which owes Allied Irish Banks an unspecified debt but is delinquent in servicing the interest to the tune of 1.4 million. It has placed this troubled asset on the market for sale with CBRE for 8 million - well below it's book value of 11 million.
The non-executive directors of Hawtin, who are the major shareholders, are looking at getting out of the property investment market, though the route they have in mind is by accepting an offer from a company in which the MD, Richard Hayward an interested party.
The Chairman's conclusion was: "We were unfortunate that we entered the property investment market in 2006 and therefore only had one year of good progress before the funding and property recession hit in 2007. We have battled through the past three years in a positive and progressive manner and I thank all involved with the Group for their hard work over this period. Any disposals will have a significant impact upon leverage and following this we anticipate being in a position to develop our embryonic plans to enter into a different sphere of activity."
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