......Well that was n't such a good pick Miles of Growth Investor,as the prob appears to be with Covent Garden!I exited this company a couple of months ago purely by chance as the marginally increased price gave me the opportunity to sell a smallish holding at an even smaller profit.

Hopefully the problem should be sortable but from a pure investing position it is difficult to trade here and caution is required.

Pick of AIM by Miles Nolan
10/08/2011 Miles Nolan
http://www.growthcompany.co.uk/features/1647503/pick-of-aim-by-miles-nolan.thtml


I recently made the trek across town to the West End to meet the management of Serviced Office Group (SVO). The AIM-listed provider of flexible office space has recently taken over the former Channel 5 headquarters at 22 Long Acre, and has wasted little time in transforming the building. Chairman Michael Kingshott has enjoyed a successful track record in insurance and shipping but SVO is his focus.

The five-floor flagship building in Covent Garden is being carved up into smaller units, with clients flocking to sign up on flexible terms.

In 2004, SVO had four centres and reversed into tecc-IS – an Israeli focused investor. Since then the inherited investments have been sold and SVO now operates 23 sites, spanning 410,000 square feet and 5,327 workstations.

The shareholder list reads like a who’s who of high-profile names including Sir Tom Farmer, John Morley and Peter O’Reilly. Not bad for a company valued at less than £5 million.

SVO argues that the economic downturn has provided it with a great opportunity, as landlords struggling to rent seek alternative uses for their property. Kingshott enthuses, ‘We have been offered plenty of product but remain highly selective.’

Bespoke design
The company is able to offer bespoke office design, provide office supplies and even offer FSA compliance services. Leads are typically generated from web-brokers, website enquiries and referrals. SVO earns its income from rent, telephony use and boardroom hire, for example.

As it has grown so too have the average sizes of the sites it works on. One recent deal was to take over and manage part of a 132,000 square feet site in Hemel Hempstead leased by British Telecom. The process is well under way and will see SVO progressively re-zone much of the building for use by SMEs.

Though Regus is the clear leader, SVO is the number three player in a UK market that is estimated to have 2,750 serviced offices. The recent £3.9 million sale of a site in Teddington for new housing confirmed the latent value within the group – and it still owns seven other freeholds. At just 3p, the shares have plenty of upside potential.

Though the woes of the UK construction market are well documented, one small player that has escaped the attention of many is Mountfield Group.

The Wickford-based firm has four divisions: Mountfield Building carries out work as a main contractor; MBG undertakes fit-out work; Connaught Access provides flooring systems; and Mountfield Land sources and then enhances land.

Mountfield joined AIM by way of an introduction in 2008 at 10p and in May raised £560,000 at 1.5p to boost its working capital. So what’s the attraction?

As was documented in this column last month, the noise surrounding cloud computing is providing plenty of demand for data centres.

Attractive niche
Mountfield has carved itself an attractive niche in this area and has to date completed more than 40 data centres for a raft of clients. A recent trading update confirmed the award of new work worth £8.2 million, which takes its first-half secured business to over £14 million – not bad when compared to just £3.5 million at the same time last year.

Chief executive and 42 per cent shareholder Graham Read says, ‘There is a huge pent-up need for data storage and we are well known in this field.’ Indeed, the pipeline of potential work is well in excess of £30 million.

Read is on the lookout for acquisitions, and would like to build a multidiscipline group with sales of £50 million over the next two years.

Interim results are due in September and should provide a useful platform for Mountfield to update the market on its strategy. At 2.75p, the shares could reward a speculative punt.

Companies: Serviced Office , Mountfield

Serviced Office in £3.9m disposal

16/05/2011 Miles Nolan

Flexible office provider Service Office Group (SVO) has realised £3.9 million following the sale of a property in Teddington.

The AIM counter has sold the site to Linden for a new housebuilding development and will realise a £500,000 gain on the disposal. In an interview with Growth Company Investor chairman Michael Kingshott said 'we have a valuable estate worth in excess of £30 million', he also adds that there is plenty of scope for further acquisitions.

For example, just over three months ago the group took over the former 32,000 square-feet former head office of tv-channel 5 in Long Acre, Covent Garden and has sold 40 per cent of the space already. SVO also has a preferrred supplier agreement with British Telecom to provide managed services.

Though the firm is below many investors radars it operates from 22 centres providing a total of 5.076 work stations, this is after the refitting of its Hanover property and subsequent take-up by new clients. Last month SVO reported a 39 per cent leap in sales to £9.8 million as pre-tax profits fell 15 per cent to £1.4 million.

With total borrowings of £26 million the expectation is this figure will fall following the Teddington proceeds in October. SVO is also running the slide rule over its estate to ascertain if there may be further redevelopment opportunities - Hayes and Kingston are two sites that may well fit the bill. With NAV of 4.8p at the last count, the shares are attractive at 3p.


Tags: AIM market, Channel 5, Linden Homes,Michael Kingshott, Penny shares

Sector: Real Estate

Companies: Serviced Office

http://www.growthcompany.co.uk/news/1624088/serviced-office-in-39m-disposal.thtml

http://www.stockopedia.co.uk/content/serviced-office-group-sells-teddington-property-and-signs-new-lease-at-hanover-square-56574/

Serviced Office Group sells Teddington property and signs new lease at Hanover Square

Monday, May 16 2011 by Stockopedia

Serviced Office (LON:SVO) , the AIM-listed property company that specialises in flexible office space, has exchanged contracts to sell its property in Teddington for £3.9m. The transaction is expected to complete by the end of October 2011 and will generate a profit after transaction costs of £0.5m. Proceeds from the sale will be used to reduce the company’s borrowings, which stood at £26.7m at the end of 2010. A year earlier, Serviced Office renegotiated its lending facilities with Royal Bank Of Scotland (LON:RBS), with the current deal expiring at the end of 2012. The Serviced Office Group share price edged up slightly to 3p during the morning.

Separately, Serviced Office has signed a lease for the second floor at its premises at 7 Hanover Square. This follows the success of the company’s first floor of serviced offices at this property, which opened in April 2010 and was 91% occupied by September 2010. The second floor of the Hanover property has been completely re-fitted in three weeks with the first clients moving in last week and will provide up to 115 workstations. The addition of the new floor at Hanover Square brings the number of work stations currently operated by the company to 5,076 at 22 centres.

Michael Kingshott, the chairman of Serviced Office, said: “The sale of our Teddington property follows a successful application for planning permission for conversion into residential accommodation. Receipt of this permission, and subsequent sale of the property, is in line with the company's strategy for this building. The re-fit of the second floor in Hanover Square was undertaken in record time and is testament to the skills we have been developing over the last year. The re-fit has been carried out to a high specification providing high quality fully serviced offices. These two transactions, and breaking the 5,000 work station threshold, represent an excellent step forward for the company. We continue to seek new opportunities to manage properties as serviced offices and re-fit projects to undertake on behalf of landlords or leaseholders.”