City North Group

London-based property company City North admits the continued difficult London property market affected its results for 2003, when pre-tax profits dipped from £1m to £947,000 on turnover increased a mere 2% to £4m. But there are signs of recovery. Tenant occupancy averaged more than 96%, some 6% above current national occupancy rates, and the company benefited from a high percentage of fixed corporate leases as well as some rental uplift, including a £100,000 rent increase at its Vincent Square site. On the sales side, the news is less positive as managing director Michael Sherley-Dale says property values remained flat in the residential portfolio in London. While the northern UK regions achieved double-figure growth, the group suffered mark-downs in its commercial developments. These factors contributed to produce a 7.8% fall in net assets to £58.4m. Net debt at year-end stood at £41.6m, up from £37.6m. The company is urgently seeking to narrow its discount to asset value, which did not match the sector average fall of 20%, but Sherley-Dale hopes better economic growth and rising recruitment in the financial markets should boost the rents portfolio and site values. Hold for recovery.

Sector: General Financial

Companies: Condor Resources

Market cap: £40.6m

PE Forecast: n/a

Share price: 210.5p

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