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Southern Cross - Sale and leaseback of 16 homes

September 2008

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • SCHE
  • Price:
  • 155p
The shares shot ahead to 160p after the company announced the sale-and-leaseback of some of its freehold properties. Of the 29 remaining freeholds, 16 have now been sold for a total of £52.1m and the rent has been set at £4.2m, representing a yield of 8% to the buyer. The disposal results in a book loss of £9.1m but nicely pares down debt. Southern Cross’ total debt, which comprises two parts - facilities for running the operations and facilities for making acquisitions. The latter has had £81m drawn down and most of the money raised from the sales will go towards reducing this. Investec forecasts net debt is now £75m, well below earlier expectations.That is a positive development but the big sw ...

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Related Articles

Southern Cross (September 2009)
Southern Cross - Rapidly paying down debt (June 2009)
Southern Cross - Could eliminate debt (March 2009)
Southern Cross Healthcare - IMS later this month (August 2008)

With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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