Chaired by Paul Rackham, the man who delivered substantial shareholder value at Waste Recycling, Property Recycling floated on AIM at 50p last June. Growth Company subsequently backed the company as a strong buy at 57.5p in November.

For the uninitiated, Property Recycling looks to create value for investors by recycling (cleaning and clearing) brownfield sites, and then improving their intrinsic value by attaining planning permission for development . Once value has been maximised, sites are marketed to commercial and residential property developers. The market is being driven by demand for development land, as well as pressures on greenfield sites, to which brownfield offers an attractive commercial – and political – alternative.

Rackham admits the timing of realisations will prove erratic, but to cover operating costs, Property Recycling generates rentals on its sites. Maiden annual results to December were encouraging, with pre-tax profits coming in at £2.4m (equating to profits per share of 5.7p), with the profit and loss account boosted by the sale of a site at Saddlebow for £3.5m.

Saddlebow allowed Property Recycling to declare a 1p dividend, though the timing of future returns will depend on realisations made throughout the year, with dividend timing balanced by the need to ‘broaden the base’ by investing cash in new sites and corporate acquisitions.

Lucrative returns look assured, special dividends could feature, and Growth Company Investor remains a fan of this terrific capital appreciation story. Strong buy.