Terrace Hill has suffered a 39.8% drop in its net asset value in the year to 31 October due to asset writedowns.

The AIM-listed commercial and residential developer said this morning its NAV had dropped to 58p a share after it made £32.6m of writedowns. This led to a pretax loss of £31.6m. The final dividend was more than halved to 0.54p a share, bringing the full-year dividend to 1.3p a share.

'Clearly, the immediate future for our industry looks challenging and I anticipate further falls in asset values,' said chairman Robert Adair.

He said the company's focus was on cash flow and preserving cash. 'We constantly review our cost base and believe we have a lean operation,' he said. 'We have reduced our headcount by 7.1% since the year end and continue to exercise tight control over our discretionary expenditure.' The company has loan-to-value gearing of 45.7%.

During the year it completed £72.4m of sales, including Queens Warf in London's Hammersmith for £30.75, which achieved a profit of £11.1m.