August 11, 2004

By Neesa Moodley

Durban - Property investment and import financing group Marshalls posted healthy results for the six months to June, reflecting a steep climb out of the red, with net cash inflows improving from a deficit of R1.3 million to a positive R3.2 million.

The company posted a trading statement last week, alerting shareholders to a substantial increase in earnings.

Managing director Peter Lonsdale attributed the increased earnings to an increase in demand and reduced interest rates, among other items.

Marshalls holds three divisions of property as well as listed international investments and it acts as a trade import financier in its confirming division.

Headline earnings a share grew 142 percent from last June to 4.6c and earnings a share rose 392 percent to 6.4c.

Lonsdale said demand for light leased commercial property in Durban had increased considerably during the past year, resulting in increased rental incomes.

"All our buildings are fully let, except for some vacancies in our central business district office block," he said.

The group expected the positive earnings trend to continue for the rest of 2004.

The company's ratio of business between property and confirming was about 2:1 and management expected a better year ahead for both divisions.

The property division proved most profitable, contributing R8.9 million to revenue, followed by the confirming division, which yielded R562 000.

The investment division contributed R241 000.

While interest-bearing borrowings remained fairly level at R16.4 million, the company managed to reduce its bank overdraft by 93 percent to R245 000 from R3.9 million last June.

Marshalls shares closed 12c higher at R1.75 yesterday. The real estate sector ended 0.68 percent lower.