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June 3, 2009 5:38 pm
Heron International, the property company run by Gerald Ronson, is to pay a dividend of £17.2m to its investors this year.
Heron’s backers include Larry Ellison, the Oracle chief, Michael Milken, the former junk-bond king and Steve Wynn, the casino mogul.
The last dividend Heron paid at the beginning of 2007 was £80m, although this reflected a one-off boost from the sale of a stake in Crest Nicholson.
Accounts for 2008, which are to be filed with Companies House next month, show that Heron is surviving the property slump in far better shape than the previous recession, when it almost went bust due to its debt.
Heron’s net asset value was reported at £384m at the end of 2008, a moderate decline from £409.6m in 2007. Heron sold many of its investments in the UK before the slump, while its European assets have not been as badly hit.
The fall in the value of its property assets has also been offset by a £34m
currency boost from its European holdings.
Gross assets stood at £697m, with cash at £137m at the year end, which Mr Ronson said would be used alongside debt to buy selectively back into the market when it staged its recovery over the next few years.
Mr Ronson said there was not yet value in the market. “We have bought a few properties but nothing major. Unless the deal is really right, why do it? Keep the money in the bank and if you miss the odd opportunity so what?
“Our accounts show we aren’t grossly overgeared, all our developments are well financed, all our investment properties are funded. Compared to most of our competitors in the public sector, our performance and balance sheet speaks for itself.”
Heron intends to start building houses again and Mr Ronson admits he has cast his eye over some of the listed housebuilders. They carried too much debt, he said, and banks wanted too much equity. “Residential will be the first thing to come back [but] we’ve got enough land,” he added.
Even so, he remains cautious. “We are in for a difficult period of time. There will be more unemployment than people expect,” he said.
“In the last recession, it was stay alive till 1995, then go to heaven in 1997. And we are looking at three-to-five years again from now for recovery. But if you’ve got cash and good relationships with your banks, then you will survive and do well. If you have neither then you are in trouble.”
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