Property group Minerva has dropped plans to build what would have been the City of London financial district's tallest office block, saying on Monday the project was too big for a company of its size.
Minerva, hit by the bankruptcy of department store chain Allders, of which it was a joint owner, also said its net asset value per share a key industry measure was 311.5 pence per share by end June, down from 314.9 pence a year earlier.
Planning permission was granted in April 2004 to build what would have been the City's tallest office building with 50 storeys, giving 1 million square feet of space.
To deliver a building of this size, speculatively into the market, for a company the size of Minerva, is if you excuse the pun, a very tall order, Group Development Director Tim Garnham said.
The firm said the St Botolph's House site would instead be developed into a 14 storey building of around 530,000 square feet of office and retail space which could be completed in a shorter time scale.
Minerva said it made a profit before tax and exceptional items of 9.3 million pounds, compared with a loss of 4.7 million pounds the year before, and said it expected to be able to deliver favourable returns if the UK property market remained robust.
We have had a very busy 12 months and the results are a marker saying this is a transition point and the company is confident that we will deliver upside in terms of value and profits, Chief Executive Salmaan Hasan said.
On new business, we are very pleased with the progress we have made. We have achieved a level of new business that is beyond our expectations, he said in a conference call.
Chairman Andrew Rosenfield, who is expected to be replaced by Oliver Whitehead at the group's annual general meeting, said in March last year the group planned to dramatically reduce its borrowings, increase cash reserves and strengthen the board.
Shares in Minerva, which have underperformed the real estate sector by 20 percent over the last 12 months, were up 0.7 percent at 287 pence by 08:50 GMT (9:50 a.m. British time), valuing the group at around 463 million pounds.
Minerva said its Walbrook development of grade A offices was underway and expected to complete in 2009 and that its Park Place shopping centre in Croydon continued to progress.
Minerva, which last month emerged as winner of the auction for Young & Co's Brewery's landmark site and nearby offices in south London, said it would not pay a dividend until the realisation of its projects.