A relatively uneventful set of half-year results from brownfield speculator Property Recycling mask a hive of background activity.

Steered by veteran Paul Rackham and finance director Steve Stuteley, the company owns six freehold sites with planning approval for either industrial, commercial, residential or leisure use. With no property sales made in the six months to June, rental income provided pre-tax profits of £46,658 on sales of £406,190, down from 2006 equivalents when a £400,000 sale was made.

One noteworthy occurrence was the £4.75m purchase of a 20-acre site ‘one field from the A1’ in Lincolnshire. Its short-term tenants already provide £410,000 annual rent and plans for its future are being decided.

News from Ikea that it no longer wanted to exercise its option over the Stanton site means, says Stuteley, ‘we‘ve gained a unique planning consent’ as the permission allows for a 1.2m sq ft building – probably the biggest building in the east of England.

Of the remainder of the outfit’s 500 acres, Stuteley says, ‘we’ve been working on improving them – we’ve already got a lot of hidden value and there’s a lot more to come out’. He also points to ‘a couple of million in the bank’ to make acquisitions in a market ‘moving in our favour’.

Although the shares have subsided from GCI’s 57p recommendation price last year and despite 75p highs, this capital appreciation story has a long way to unwind. Shareholders should sit tight as the management have a good history of delivering value.

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