I promised an occasional set of suggestions on undiscovered and undervalued ofex stocks. I said there were still a few astonishing bargains over there and in my view this one fits the bill admirably. (my first suggestion Millbrook is up after two new partnerships and a nice contract win.)

Before i go any further, if you do not like property stocks, look away now! Let's not have a debate on the delights or otherwise of a property crash. i think you as investors have your views and are pretty clued up on the arguments for and against, but suffice to say, if you think commercial property will tumble then this share is not for you.

The stock, then is GSC Property. I hold. GSC has a portfolio worth 43 million plus cash of just under 5 million, after a recent sale. Repayments are fixed over 25 years at around 6%, totalling about 37 million. So nav is over 10 million and the nav is 101p a share. The shares are trading at 55-60p (market cap 5.75 million, nearly covered by cash!) a 40%+ discount to nav and as i said in the headline are profitable.

So why else is this so attractive? It buys on the theme of covenant, rather than location. Among the properties they own are a banking hall in Essex and a drive through in Birmingham. 90% of their customers are top 350 UK companies and or government. They are due for a revaluation of their portfolio soon, (likely to be up if the market is any indicator) and rent reviews should add to profits. The nearest company I can find is Aim listed PHP which is trading at a 5-10% Premium to nav. That would put GSC on 110p a share. Even if you think a discount is more apt however a 10-15% discount would see the shares at 85-90p which i consider to be fair value for the short term.

Oh they even pay a dividend of over 1p a share.

Strong Buy.

8Ball looked like 2x1000 trades and then the odd number 1978 or similar? Was up 5p at 10am, then 9p afternoon. Was up 9p before the last trade was reported, though it may have already happened.

Looking forward to Third Eye's next visit to this thread,hope it is as persuasive to investors as his last one! (His comment that 40p was fair value still amuses us GSC holders.) :)

If the other two trades were buys, I wonder where the shares came from.
We may have had a directors sell today in order to fill the orders.
If not it will have to come soon.

The 10,000 shares sold by the Directors on 24th Mar must have all gone by now?

Hawick..Where did you get your trades data from?
I just tried counting up the trades since 24 mar from the chart on OFEX.com and my guess is 6,000 plus todays. (9,894)

HarryP nice to see you.......... Shrewd move and sure you are looking forward to results next week and what I am sure will be a nice increase to nav.

8Ball apparently one of the trades was a sell! A poster at SC says he sold on Friday. Makes rise even more impressive! I am almost embarrassed to admit picking up my five figure amount of shares at an average of under 55p, even after all costs. Sometimes it pays (as for your brill buy of Wynnstay 8Ball) to buy when everyone else thinks you are loopy, and even mock you, out of mere ignorance or prejudice - even jealousy ........... :). Had I done it -even at 80p - though, rest assured, I would feel just as comfy. For me long term in this share means exactly that.

One of the easiest stocks around to number crunch, and the numbers add up for shareholders beautifully.

The basic info is on the ofex leaderboard but I only have idea of breakdown as I logged in a few times on Friday and saw numbers change.

GSC PROPERTY HOLDINGS PLC

FINAL REPORT 2003

CHAIRMAN'S STATEMENT FOR THE CONSOLIDATED GROUP RESULTS FOR THE YEAR ENDED 31
DECEMBER 2003

In this my first annual report for the Company I am pleased to announce that
the final results for the year ended 31st December 2003 show a very
satisfactory increase in operating profits due mainly from some of the
outstanding rent reviews being settled and property disposals. Our target is to
have a net rental surplus of GBP1Million (comprising rents received less all
interest paid). The Company is 80% towards that target which we hope to reach
during 2004.

During this year the Company has been very active in the property market taking
the opportunity to reposition its investment portfolio by selling some of its
older investments and re-investing in newer properties with longer leases. The
Company has also replaced all its old and varied high priced loans with a bond
style mortgage with interest set for 25 years at substantially lower rates. The
cost of this refinancing has led to a once only write-off.

With on going lower interest rates now payable by the Company and with a number
of very important rent reviews nearing settlement I expect the long term
profitability of the Company to continue to improve.

The Company is also continuing to seek opportunities from within the existing
portfolio. The management team are aware of improving the uses of some of our
properties where tenants have unused or under utilised space. These
opportunities will be vigorously pursued during the second half of the year.

RESULTS IN BRIEF

Rental revenues for the year were GBP2,534,090, and net interest payable was
GBP1,733,880. Profit before tax for the period was GBP2,421,821. The results
include the profit on sale of investment properties of GBP3,476,670 and an
exceptional charge of GBP1,123,802 arising on the refinancing of the entirety
of the group's borrowings. Adjusted earnings per share for the period were
21.08p.

Prior to the introduction of the company to OFEX, the company made a bonus
issue of 87,000 GBP1 ordinary shares to existing shareholders, and then split
the GBP1 ordinary shares into 100 1p ordinary shares. This gave a more
practical number of shares and value for each share. The earnings per share
figures quoted above and the dividend figures below have been adjusted to
reflect the effect of this reorganisation.

DIVIDENDS

A final dividend of 2.0p per share (GBP199,960) is proposed making the dividend
for the year 3.2p (GBP319,960). The dividend will be paid on 30th June 2004 to
shareholders on the register at 18th June 2004.

ANNUAL GENERAL MEETING

The Annual General Meeting of the Company will be held on 29 June 2004 at
Courtway House 129 Hamlet Court Road Westcliff on Sea Essex SS0 7EW at 11.00am.

ALAN GERSHLICK
Chairman

26 May 2004

GSC PROPERTY HOLDINGS PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 December 2003

AUDITED Audited
YEAR ENDED Year ended
31 DECEMBER 31 December
2003 2002
NOTE GBP GBP

TURNOVER 2 2,534,090 1,840,529

Administrative expenses (774,204) (513,843)
Other operating income 17,760 -
------------------------------------------------------------------------------
OPERATING PROFIT 1,777,646 1,326,686

Profit on disposal of fixed assets 3 3,476,670 144,932

Cost of Refinancing 3 (1,123,802) -

Interest payable (1,733,880) (1,069,899)
Interest receivable 25,187 -
------------------------------------------------------------------------------
PROFIT ON ORDINARY ACTIVITIES BEFORE 2,421,821 401,719
TAXATION

Tax on profit on ordinary activities 4 (313,872) (117,613)
------------------------------------------------------------------------------
PROFIT FOR THE PERIOD 2,107,949 284,106

Dividends (319,960) (124,000)
------------------------------------------------------------------------------
TRANSFERRED TO RESERVES 8 1,787,989 160,106
------------------------------------------------------------------------------
Earnings per ordinary share (pence) - 5 35.18p 18.79p
unadjusted
------------------------------------------------------------------------------
Earnings per ordinary share (pence) - 5 21.08p 2.84p
adjusted

Weighted average number of ordinary shares 9,998,000 9,998,000
in issue (as restated)

GSC PROPERTY HOLDINGS PLC
CONSOLIDATED BALANCE SHEET
At 31 December 2003

AUDITED Audited
AS AT as at
31 DECEMBER 2003 31 December 2002
NOTE GBP GBP
FIXED ASSETS
Tangible assets 206,082 568,358
Investments 6 45,309,003 22,545,000
-----------------------------------------------------------------------
45,515,085 23,113,358
CURRENT ASSETS
Debtors 9,230,238 774,422
Other short-term investments 705 705
Cash at bank and in hand 4,991,685 410,575
-----------------------------------------------------------------------
14,222,628 1,185,702

CREDITORS: AMOUNTS FALLING DUE (2,989,315) (2,251,917)
WITHIN ONE YEAR
-----------------------------------------------------------------------
NET CURRENT LIABILITIES 11,233,313 (1,066,215)
-----------------------------------------------------------------------
TOTAL ASSETS LESS CURRENT LIABILITIES 56,748,398 22,047,143

CREDITORS: AMOUNTS FALLING DUE (44,620,743) (13,089,781)
IN MORE THAN ONE YEAR

PROVISIONS: DEFERRED TAX - (26,789)
-----------------------------------------------------------------------
TOTAL ASSETS LESS CURRENT LIABILITIES 12,127,655 8,930,573
-----------------------------------------------------------------------
CAPITAL AND RESERVES
Called up share capital 7 99,980 12,980
Share premium account 4,500 4,500
Revaluation reserve 8,825,006 7,415,913
Profit and loss account 5 3,198,169 1,497,180
-----------------------------------------------------------------------
Shareholders' funds 12,127,655 8,930,573
-----------------------------------------------------------------------

GSC PROPERTY HOLDINGS PLC
NOTES TO THE FINAL REPORT 2003

1. BASIS OF PREPARATION

This is the first year that consolidated group accounts for GSC Property
Holdings plc have been prepared. Tidalgate Investments Limited was brought into
the group following a group reorganisation on 27 December 2002, and the
comparative results for the year to 31 December 2002 show the pro-forma
consolidated results that would have been presented, had consolidated accounts
been prepared.

2. TURNOVER

Turnover represents rental income invoiced in the period and is stated net of
VAT.

3. EXCEPTIONAL ITEMS

The profit on disposal of fixed assets arises on sales of properties from the
group's investment portfolio.

In April 2003, the group refinanced all of its borrowings into a single bond
over 25 years at between 6.16% and 6.25%. The interest rates are fixed for the
duration of the bond. The refinance penalty arose on the early termination of
the group's existing loans.

4. TAX CHARGE

The tax charge relating to the current year has been calculated at 30% of the
profit before tax and is based on the current estimate of the effective tax
rate for the full year. The Group adopts the provisions of the UK Financial
Reporting Standard 19, however no adjustments have been made as the effect is
not material.

5. EARNINGS PER SHARE

The weighted average number of shares in issue has been restated where
necessary to take account of the bonus issue and share split that occurred in
April 2003

Earnings per share have been calculated to include total earnings attributable
to equity shareholders arising in the period. Adjusted earnings have been
calculated to report only distributable earnings arising in the period and do
not include movements through the revaluation reserve. The reconciliation
between the two is shown below:

YEAR TO 31 YEAR TO 31
DEC 2003 DEC 2003
GBP GBP

TOTAL EARNINGS ARISING IN THE PERIOD 3,517,042 1,878,816
LESS
EARNINGS ATTRIBUTABLE TO REVALUATION OF PROPERTY (1,409,093) (1,594,708)
-------------------------------------------------------------------------------
ADJUSTED EARNINGS 2,107,949 284,108
-------------------------------------------------------------------------------
p p
TOTAL EARNINGS PER SHARE (p) 35.18 18.79
LESS
EARNINGS ATTRIBUTABLE TO REVALUATION OF PROPERTY (14.09) (15.95)
-------------------------------------------------------------------------------
ADJUSTED EARNINGS PER SHARE (p) 21.08 2.84
-------------------------------------------------------------------------------

6. INVESTMENTS

In the year to 31 December 2003 the group purchased investment properties at a
cost of GBP28,708,834. Properties with a book value of GBP11,150,001 were sold
in the period, realising a profit on disposal of GBP3,476,670.

7. SHARE CAPITAL

On 30 April 2003, the company made a bonus issue of 87,000 GBP1 ordinary shares
to the existing shareholders. Immediately following the bonus issue the company
subdivided each GBP1 ordinary share into 100 shares of 1p each. The company now
has 9,998,000 issued and fully-paid shares of 1p each.

8. PROFIT AND LOSS ACCOUNT
AUDITED Audited
YEAR ENDED Year ended
31 DEC 2003 31 December 2002
GBP GBP

Profit and loss account at the start of the period 1,497,180 1,343,555

Retained profit for the period 1,787,989 160,106

Other movements - (6,481)

Capitalisation of reserves on issue of bonus shares (87,000) -
-------------------------------------------------------------------------------
Profit and loss account at the end of the period 3,198,169 1,479,180
-------------------------------------------------------------------------------

Thanks for posting 8Ball.
Couldn't be more happy. After numbers has resulted in an increase to 121p a share in nav!! I posted this elsewhere, let me know if you think it's fair 8ball!

If we wanted to be churlish we'd point to rent income less expenses and tax was a little less than the 1.75 million in repayments, but that is all i can find to be churlish about. The company says it plans to move that area of the business to break even (1 million above the repayment figure next year). And if you think there will be a crash then no property stock, domestic or commercial, is for you anyway.

But all that is to be superficial and not appreciate the nature of the beast we have here:

1) It ignores the company's skilled dealing in the commercial property market. Clearly this is something management have proved very adept and nimble at. Of course the eps will vary year to year, so I wouldn't consider the p/e figure as important myself.
2) Just by breaking even and making the 1.75million repayment (the rent income minus expenses and tax as described above) each year, that 1.75 million comes off repayments and is ADDED each year to the nav (in this case 17.5p per share per year). As is any profit from the property deals and thirdly if you were to add what i consider a modest 4% to the value of the property portfolio that is another 1.8 million (18p per share).
3) If you are still following, break even (rent v expenses and tax) would actually add 35p a share a year to nav from here, on the above model, because of the benefits from the reduced repayments and increase in the portfolio's value.
4) NAV actually came in at 12.1 million (121p a share), so the current share price discount is about 30%.
5) Nice divvy of 2p (3.2p for year).
6) Interest repayments are fixed for the full repayment period, in the current environment a really big plus imho - shrewd move GSC!
7) 85% of clients are top FTSE 350 companies or government departments. Quality.
8) Included in nav is 4.99 million in cash (market cap 8.45 million).
9) Not an option or warrant in sight - zero dilution.

To summarize, What we have imho is a virtuous cycle from here, year after year, of falling repayments and rising nav. Even if the property portfolio stays at the same value, 17.5p a year on break even is added to nav.

I think there is a heck of a lot still to go for!

My own forecast is for nav to grow about 40p a year from here on, (would give us a nav of 200p in two years) for the foreseeable future. The shares are very hard to get hold of, but at 82-87p, for the genuine long term investor, remain tremendous value imho.

One of my long term holds Ofex listed GSC Property (competitive mms now on board)WOW!!!

GSC sell their Loughborough Safeway/Morrisons for 3.8 million ABOVE book value!!!
For a company with a market cap under 9 million and a hitherto nav of 121p per share (shares 88.5p) this is huge and superb news!!

They have also bought a hotel in Derby.

Here's the key part of the announcement. Almost SIX MILLION profit in a year on this one deal!!
Market cap under 9 million! As I say taken in isolation, nav will be 159p after this against share price 87.5p!
Best announcement from a micro cap I can remember, bar none!

GSC Property Holdings plc, the commercial property investment group, has
exchanged contracts for the sale of the Safeway/Morrisons supermarket in
Loughborough for GBP14.8m. The property, purchased in July 2003 for GBP8.86m and
valued at GBP11m at 31 December 2003 has been sold following the completion of a
comprehensive rent review which saw the annual rent roll increase from
GBP565,000 to GBP775,000 per annum.