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Brixton

May 2009

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:
  • BXTN
  • Price:
  • 27.5p
Shares in industrial property developer Brixton have been a disappointment, with the main bugbear being a worse than expected fall in net asset value, which fell 47% to 290p. While the company is currently compliant with banking covenants the fear is that it will breach its loan to value requirements when they are next tested in June as this would happen if NAV falls more than another 10%. Analysts calculate Brixton will need to raise £250m equity to pay down enough debt to remain compliant with its LTV. However, in our opinion management badly missed a trick by seemingly turning down the opportunity to raise money through a rights issue when the price was much higher and the chief executive has now been forced to resign. A right ...

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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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