Council has £300m property debt despite sell-off
Somerset Council is in the process of selling the shops and offices in its commercial property portfolio, which it inherited, along with the loan debt, from former district councils.
But it has had to spend the proceeds on services such as adult social care, following its warnings that it could go effectively bankrupt.
A council spokesperson said it was "clearly in the taxpayers' interest" to sell the properties rather than borrow more money.
More news stories for Somerset
Listen to the latest news for Somerset
The council's properties ranged from an M&S building in Yeovil, to offices in Bristol, business parks including Street Retail Park, a TK Maxx in Worcester, and an NCP car park in Bournemouth.
The district councils that were replaced by Somerset Council in 2023 along with the county council bought the properties with £298m in loans as part of an investment strategy taken by a number of English local authorities.
The £298m sum included fees and stamp duty as well as the cost of the properties.
The councils hoped to rent out the properties and use the money to run local public services.
However, just months after Somerset Council was created, it declared a "financial emergency" and said it would sell off 48 properties.
It was given special permission by the government to spend the proceeds on running day-to-day services like adult social care and children's services.
But the portfolio has significantly lost value due to falling market prices in recent years.
At the end of March 2024, the council's properties, including any already sold, were valued at £219m – a £78m loss on the initial investment.
As of 31 December 2024, Somerset Council has sold properties for £76m that cost £104m to buy, a £27m loss.
The £76m has been spent on day-to-day services in 2024/25, and the £104m debt remains with the council.
The council will also have lost the rental income from those properties.
Only around £18m of the debt arising from the property loans had, in March 2024, been paid off.
The purchases were largely funded by borrowing from the Public Works Loan Board, which the current council is responsible for repaying with interest. It makes these payments from its revenue budget.
Jonathan Carr-West, of the Local Government Information Unit think tank, said councils had been encouraged to invest in commercial property by the government but many found the purchases "exacerbated their financial problems".
The council spokesperson called for the government to take "urgent action to fix the system of funding local government which is fundamentally broken".
Follow BBC Somerset on Facebook and X. Send your story ideas to us on email or via WhatsApp on 0800 313 4630.
£47m cuts will impact on services - council leader
Council sells off more than £71m of property
Somerset Council says government cash not enough
Local authority declares financial emergency
Council may sell properties amid bankruptcy fears
Somerset Council investment strategy report
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
Lockheed (LMT) Up 6.3% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Lockheed Martin (LMT). Shares have added about 6.3% in that time frame, outperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Lockheed due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Lockheed Beats on Q2 Earnings, Lowers '25 EPS View Lockheed Martin Corporation reported second-quarter 2025 adjusted earnings of $7.29 per share, which beat the Zacks Consensus Estimate of $6.49 by 12.3%. The bottom line increased 2.5% from the year-ago quarter's reported figure of $7.11. Including one-time items, the company reported GAAP earnings of $1.46 per share, lower than the prior-year quarter's recorded earnings of $6.85. The year-over-year deterioration in earnings was mainly due to lower consolidated operating profit generated in the second quarter of 2025 compared to the prior-year quarter. Operational Highlights of Lockheed Net sales were $18.16 billion, which missed the Zacks Consensus Estimate of $18.56 billion by 2.2%. The top line, however, inched up 0.2% from $18.12 billion reported in the year-ago quarter. The year-over-year improvement was driven by higher sales growth registered by LMT's business segments, except Rotary and Missions Systems. LMT's Backlog LMT's backlog as of June 29, 2025, was $166.53 billion compared with $172.97 billion as of March 30, 2024. Our model projected a backlog worth $174.48 billion for the second quarter of 2025. The Aeronautics segment accounted for $52.17 billion of the total backlog amount, while the Missiles and Fire Control segment contributed $40.25 billion. The Rotary and Mission Systems segment contributed $38.58 billion, while the Space unit accounted for $35.53 billion. Lockheed's Segmental Performance Aeronautics: Sales increased 2% year over year to $7.42 billion. This rise was driven by higher sales volume from the F-35 program. The segment incurred an operating loss of $98 million against operating profit worth $751 million in the year-ago quarter. The operating loss margin was 1.3% against the prior-year quarter's operating profit margin of 10.3%. Missiles and Fire Control: Quarterly sales improved a solid 10.7% year over year to $3.43 billion. This was on account of higher sales from tactical and strike missile programs. The segment's operating profit increased 6.4% year over year to $479 million. The operating margin, however, contracted 50 basis points (bps) to 14%. Space: The top line improved 3.5% year over year to $3.31 billion, driven by higher sales from commercial civil space programs, primarily the Orion program, as well as higher sales volume for strategic and missile defense programs. The segment's operating profit increased 4.6% to $362 million. The operating margin also expanded 10 bps to 10.9%. Rotary and Mission Systems: Quarterly revenues declined 12.2% to $4 billion on a year-over-year basis, due to lower sales from Sikorsky helicopter programs, reduced production volume for Seahawk programs as well as lower volume for integrated warfare systems and sensors (IWSS) programs. The segment incurred an operating loss of $172 million against operating profit worth $495 million in the second quarter of 2024. The operating loss margin was 4.3% against an operating profit margin of 10.9% in the year-ago quarter. Financial Condition of LMT Lockheed's cash and cash equivalents totaled $1.29 billion as of June 29, 2025, compared with $2.48 billion at the end of 2024. Cash from operating activities amounted to $1.61 billion as of June 29, 2025, compared with $3.51 billion a year ago. Long-term debt as of June 29, 2025, totaled $18.52 billion, down from $19.63 billion as of Dec. 31, 2024. Lockheed's 2025 Guidance The company partially updated its 2025 guidance. Lockheed still expects to generate sales in the range of $73.75-$74.75 billion in 2025. The Zacks Consensus Estimate is pegged at $74.32 billion, which lies above the midpoint of the company's sales guidance. However, LMT has lowered its adjusted earnings per share (EPS) guidance. The company now expects to generate adjusted EPS in the range of $21.70-$22.00 compared to the earlier guidance of $27.00-$27.30. The consensus estimate is currently pegged at $27.21 per share, which lies much above the company's newly guided range. Lockheed still expects to generate cash from operations in the range of $8.50-$8.70 billion. It also continues to expect capital expenditure of approximately $1.90 billion. Lockheed still expects to generate a free cash flow in the range of $6.60-$6.80 billion. How Have Estimates Been Moving Since Then? Since the earnings release, investors have witnessed a downward trend in estimates review. VGM Scores Currently, Lockheed has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy. Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in. Outlook Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Lockheed has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Performance of an Industry Player Lockheed is part of the Zacks Aerospace - Defense industry. Over the past month, GE Aerospace (GE), a stock from the same industry, has gained 1.2%. The company reported its results for the quarter ended June 2025 more than a month ago. GE reported revenues of $10.15 billion in the last reported quarter, representing a year-over-year change of +23.4%. EPS of $1.66 for the same period compares with $1.20 a year ago. GE is expected to post earnings of $1.45 per share for the current quarter, representing a year-over-year change of +26.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -1%. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for GE. Also, the stock has a VGM Score of F. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lockheed Martin Corporation (LMT) : Free Stock Analysis Report GE Aerospace (GE) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Business Insider
an hour ago
- Business Insider
Google (GOOGL) Expands Its AI Mode to Over 180 Countries
Tech giant Google (GOOGL) is expanding its AI-powered search tool, AI Mode, to over 180 countries and territories in English, with support for other languages coming soon. This tool helps users ask complex questions and get more helpful, conversational answers. A new feature also lets users share their AI-generated results with others using a 'Share' button. This allows friends or family to continue the conversation from where it left off, which is ideal for planning events or trips together. Importantly, users can delete shared links at any time in order to maintain control. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. In addition to global availability, Google is rolling out new 'agentic capabilities' in AI Mode. These features help users complete tasks like finding restaurant reservations based on specific preferences such as party size, time, location, and cuisine. AI Mode searches multiple booking sites like OpenTable, Resy, and Tock, then provides real-time options and direct links to book. Google says more capabilities, like booking event tickets or local services, will arrive soon. Currently, these agentic tools are part of an experimental feature for U.S.-based Google AI Ultra subscribers. AI Mode is also becoming more personalized. Indeed, for U.S. users who join the Labs experiment, Google will now tailor results based on previous searches, preferences, and interactions with Maps. For instance, someone looking for a quick lunch may see personalized suggestions that match past behavior, such as favoring Italian food or outdoor seating. This makes search more relevant, while still letting users adjust or turn off personalization in their account settings. Is Google Stock a Good Buy? Turning to Wall Street, analysts have a Strong Buy consensus rating on GOOGL stock based on 27 Buys and nine Holds assigned in the past three months. Furthermore, the average GOOGL price target of $216.47 per share implies 8.1% upside potential.
CNBC
an hour ago
- CNBC
Stock futures are little changed ahead of Powell's Jackson Hole speech: Live updates
Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., August 21, 2025. Brendan McDermid | Reuters U.S. stock futures were little changed Thursday night ahead of Federal Reserve Chair Jerome Powell's speech at Jackson Hole on Friday. Investors will be seeking clues on the path forward for monetary policy. Dow Jones Industrial Average futures rose 65 points, or 0.1%. S&P 500 futures and Nasdaq 100 futures each added about 0.1%. Intuit shares dropped roughly 6% in extended trading even after the maker of TurboTax and QuickBooks posted fiscal fourth-quarter results that topped Wall Street's expectations. Zoom Communications shares gained 5% after the company reported second-quarter results that exceeded expectations. Wall Street is coming off a losing session, with the S&P 500 posting a fifth straight day of declines. The broad-market index fell 0.4%, while the Nasdaq Composite slid 0.34%. The Dow Jones Industrial Average fell 152.81 points, or 0.34%. Investors are looking forward to Powell's speech at the central bank's annual economic symposium in Jackson Hole, Wyo., hoping to gain clarity on the interest rate outlook. Markets were last pricing in a 75% chance of a quarter-point cut at the September meeting, according to the CME FedWatch tool. Recently, the prospect of lower interest rates helped bolster parts of the market that have missed out on this year's rally, with investors dumping megacap tech for small caps and value plays. However, a more hawkish outlook from Powell could throw cold water on the market. In his speech, Powell will have to outline a path forward for the monetary policy while balancing both sides of his dual mandate. "I think the Fed and what Powell is going to try to articulate and communicate is an explanation and a justification for the Fed to start a process of cutting interest rates starting in September," Morgan Stanley Investment Management's Jim Caron said Thursday on CNBC's "Closing Bell." "And I think that should be supportive for markets." That could determine the direction of the near-term outlook for a stock market that's come under pressure. As of Thursday's close, all three major averages were headed for a losing week. The S&P 500 is off 1.2% week to date, while the Nasdaq is down 2.4%. The 30-stock Dow is on pace for a roughly 0.4% slide. On the other hand, S&P 500 Equal Weight Index is virtually unchanged on the week. Stock futures opened little changed Thursday night. Dow Jones Industrial Average futures rose 65 points, or 0.1%. S&P 500 futures and Nasdaq 100 futures each added about 0.1%. — Sarah Min
