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Wynnstay Properties records drop in profits despite increased property income
Property investment firm Wynnstay Properties on Thursday revealed a drop in profits, despite an increase in property income due to new acquisitions in its financial year ended 25 March.
The AIM-traded company saw its pretax profit drop by 6% to £3m compared to the previous year due to a smaller movement in the fair value of investment properties at £1.6m from £2.2m.
Conversely, Wynnstay's property income rose by 7.6% to £2.2m, with contributing factors being rent increases at an office property in Surbiton, as well as estates on Aylesford and Liphook.
The company finished its financial year with cash at £1.43m and borrowings of £10.24m, up from £11.34m the previous year.
Wynnstay proposed a dividend of 17.50 pence per share, up 11% from 15.75p the previous year.
Philip Collins, chairman of Wynnstay Properties, said: "We remain confident of Wynnstay's future as a niche property investment company. However, we feel that it is appropriate to be cautious, avoiding over-expansion or over-paying for acquisitions, and to take a measured approach in continuing to develop and build Wynnstay's portfolio."
The chairman highlighted that the company's results follow six successive years of capital, income and dividend growth, casting some blame towards the current political uncertainty in the UK.
"The continued growth of the UK domestic economy with its many successful small businesses is important to the commercial property market. Reform of the present system of business rates and the heavy costs of property transactions arising from recent increases in stamp duty are substantial impediments to the growth of small businesses and need to be addressed," said Collins.
As of 1610 BST, Wynnstay Properties' shares were unchanged at 575.00p.