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Going concern warning for LAP

28th Apr 2014
Freelance journalist
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AIA

Baker Tilly has raised concerns about the ability of London & Property Associates (LAP) to continue as a going concern.

The warning was made in the 2013 results of the UK shopping centre and retail property company.

In its audit report, Baker Tilly noted that LAP’s £44.2m revolving credit facility was repayable in September 2012 and an agreement had not yet been reached with the company’s finance providers to extend or replace this facility.

"These conditions, along with the other matters explained in the group accounting policies of the financial statements, indicate the existence of a material uncertainty which may cast significant doubt about the group and company's ability to continue as a going concern," the auditor said.

LAP reported a pre-tax loss of £1.1m or 2013, down from £7.6m the previous year.

But if the impact of discontinued operations is excluded, the result was a profit of £1.6m compared to a loss £5.9m last year, the company said.

Other property investors are also struggling, including the famous “Gherkin” building in the City of London, which recently went into receivership.

The German investment company, IVG Immobilien, which led the consortium that acquired the landmark for £630m in 2007, went bankrupt last year after defaulting in 2009.

Some experts reckon that currency fluctuations could cause further problems for overseas property investors.

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