Prime Trust has commenced a review of its business, which it hopes will bridge the gap between its asset value and share price.
The strategic review, which the group expects to be completed by early January, will cover possible merger options and the sale of some or all of its assets, among other possibilities. In a statement to the Australian Securities Exchange this morning, the group also flagged the possibility of an offer for units or partial recapitalisation of the trust.
Prime Trust chairman Michael Wooldridge said the re-sales and new sales of accommodation units for October and November were below expectations, in part due to difficulties being faced by prospective new residents who are struggling to sell their own properties in the current environment.
But the group said despite the current economic environment, a revaluing of a number of its properties had resulted in an increase in the value of these properties. However, many investments, including those in certain retirement village developments, still need to be re-valued.
The group is expecting to report an operating profit for the half year to December 31, 2008, of around $5 million to $8 million, but no distributions will be made to unit holders for the current quarter.
In late November, Prime Trust announced it had received an expression of interest in its leased aged care facilities, which have a book value of $80 million. The group has now commenced a process to consider a sale of the facilities.