Sutton Harbour Holdings blames £2.75m loss on fall in property values

SUTTON Harbour Holdings has made a loss of £2.75million in the past six months – but is blaming it on the decline in property values.

The company, which last year closed Plymouth City Airport and blamed the loss-maker for its financial woes, has now reported a slump in revenues to £3.93million for the half year to September 30, from £6.06million at the same stage last year.

But the marine and waterfront regeneration specialist, in its interim statement to the London Stock Exchange, claimed it has actually made a gross operating profit of £1.49million during the six-month spell.

It said a major revaluation exercise carried out this year, however, led to the value of its estate being slashed by £4.905million.

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With £2.59million of this having to be accounted for through SHH's income statement it resulted in an overall before tax loss of £2.75million.

The firm is putting this squarely down to difficult market conditions in the property sector, with the continuing overall economic situation depressing property prices.

However, the firm stressed the loss is an accounting issue and that its underlying business is sound.

It highlighted its recently announced plans for the Sutton Harbour area and alternative uses for the former airport site.

The firm last month launched a masterplan to turn Sutton Harbour into a visitor destination of regional and national significance, bringing together attractions such as the Barbican, Mayflower Steps, National Marine Aquarium, and restaurants and bars.

The company has also produced a masterplan for the 113-acre airport site, for which it is entitled to a 25 per cent share of net proceeds from any disposal of the land for alternative use.

SHH also reported that trading activities continued in line with expectations during the first half of its financial year.

But it said that after a period of sustained growth it is seeing a levelling of marine operations and its marina team is working hard to maintain berthing occupancy levels.

And it warned that, given the continuing economic malaise, the firm is more cautious about improving property occupancy rates in the second half year, although expecting these to improve with the increased marketing of Sutton Harbour as a destination.

SHH also moved its head office recently to the smaller Tin Quay House, renting its former HQ at North Quay House to a new tenant.

And it has also achieved completion of the lease and construction agreements for the new King Point Marina development at Millbay.

Michael Knight, SHH chairman, said: "During the first half year trading has continued in line with our expectations of challenging trading conditions and we have been implementing specific strategies to build profile and to target new markets.

"The company has established its position as a niche real estate operator specialising in waterfront destinations and associated marine activities.

"We are actively pursuing our plans for the delivery of King Point Marina and marketing of berths; making progress with future ideas for 'Destination Sutton Harbour' as well as the former airport site; and, managing the Sutton Harbour estate for long-term income and asset growth."