RNS Number : 2197S
Hirco plc
14 May 2009
News Release
Hirco PLC
('Hirco' or the 'Company')
May 14, 2009
HIRCO REPORTS INTERIM RESULTS
Continued steady progress in sales and construction at Chennai and Panvel projects; value of underlying projects decline due to general market conditions
LONDON - Hirco PLC (AIM:HRCO), an investment vehicle for Hiranandani, India's
largest developer of prestigious mixed-use townships, today announced its interim results for the first six months of fiscal 2009 ended 31 March 2009.
First-half Fiscal 2009 Highlights
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As of 31 March 2009, Hirco's Net Asset Value (NAV) was £6.72 per share, down 5.7% from a NAV of £7.12 per share as of 30 September 2008. Hirco's NAV as of 31 March 2009 represents a cumulative increase of 42% from a NAV of £4.74 per share at the time of the IPO on the London Stock Exchange's Alternative Investment Market (AIM) on 13 December 2006.
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Hirco reported a loss of £30.884 million, representing a loss per share of 40.36 pence based on 76,526,984 shares outstanding. This loss is primarily attributable to a decline in the value of the underlying projects in which Hirco PLC has invested, caused mainly by difficult conditions in India's real estate market, and by one-time charges relating to professional fee expenses.
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As of 31 March 2009, sales consideration for the Chennai residential township had been accepted on approximately 2,050,960 square feet at a cumulative average price since launching sales of Rs 4,199 per square foot. This represents an increase over figures reported in December 2008 of 2,044,618 square feet at a cumulative average price of Rs 4,192. While the Company is pleased with the increase achieved in average per-square-foot pricing at the Chennai township, volume growth has slowed considerably, reflecting in part the broader market environment.
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As of 31 March 2009, sales consideration for the Panvel residential township had been accepted on approximately 1,683,874 square feet at a cumulative average price since launching sales of Rs 4,314 per square foot. This represents an increase over figures reported in December 2008 of 1,631,047 square feet at a cumulative average price of Rs 4,278. As with Chennai, the Company is pleased with the increase achieved in average per-square-foot pricing, though volume growth has declined slightly, again reflecting the broader market environment.
Development of both the Chennai and Panvel townships continued to advance during the period. At Chennai, there was continued progress on completing the first six residential buildings, as well as roads, water, and sewage treatment plants. At the Panvel site, there was continued progress with the clearance and development of initial roads, installation of power and water supplies, and development of the infrastructure required to support the mobilisation of the substantial labour force required to complete the project.
Niranjan Hiranandani, Chairman of Hirco PLC, said:
'In spite of the numerous adversities we faced in this period, including a troubled global economy, a challenging real estate market in India and the uncertainty caused by the actions of the Laxey Partners hedge fund, we continued to make progress in the achievement of our objectives to create long-term shareholder value.
'Continuing this progress in light of difficult market conditions clearly presents a challenge. However, I am confident that Hiranandani's track record of operating successfully during all phases of the real estate business cycle uniquely positions the Company to meet this challenge.
'I am also confident in the long-term economic outlook for India. Strong fundamentals and consumption-driven growth will help India sustain its economic progress, and, despite the recent contraction, the real estate sector remains a solid long-term driver of India's growth. This long-term strength is a direct reflection of the acute shortage of housing, and the continuing shortage of modern, efficient, low maintenance, and easily accessible commercial space and the unfulfilled demand for high-quality, affordable residential and commercial space that our townships offer.'
Commenting on the Company's Dividend policy, Mr. Hiranandani said:
'The Hiranandani family has always sought to align as closely as possible its interests with those of Hirco and Hirco's shareholders. We believe that it is in all our interests to ensure that positive cash flow is generated in the operating companies and passed up to Hirco as swiftly as practical. Assuming market conditions improve rather than deteriorate further, the Hiranandani family and the Hirco board see no reason why cash flow from the project companies should not permit Hirco plc to pay a first dividend in 2010.'
For more information, please see the Chairman's full statement, which accompanies this news release.
About Hirco
Hirco PLC is an investment vehicle that invests in India with Hiranandani, India's largest developer of prestigious mixed-use townships for the country's increasingly affluent middle class. Its modern, large-scale developments - combining high-quality residential, commercial and retail components with green space and social and recreational facilities - are strategically located in suburban areas outside major city centres.
Hirco shares are traded on London Stock Exchange's AIM market under the symbol HRCO. At the time of its admission to trading on AIM in December 2006, Hirco was the largest-ever real estate investment company IPO on the AIM and that year's largest IPO on AIM.
For additional information about Hirco, please visit www.hirco.com.
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