U.K. property management firm Warner Estate Holdings PLC (WNER.LN) Friday scrapped its dividend after what it called possibly the worst year in its history, posting a significant loss due to falling property prices, and said it wouldn't expect to meet its banking covenants if they were tested.

For the year ended March 31, Warner posted a pretax loss of GBP297.1 million, compared with a loss of GBP123.5 million a year earlier.

Revenue fell to GBP42.5 million from GBP46.1 million and net asset value per share fell to 8 pence from 549 pence.

Warner, which manages around GBP2 billion of property, said it is still in talks with its three lenders - Royal Bank of Scotland, Bank of Scotland and Barclays - about its banking facilities. It reduced its net debt further since the year-end to GBP238 million at July 30.

The company said it will look to grow its asset management business, adding that the decline in property values appears to be leveling out.

Warner added that although there is a risk of to rental income from the effect of the recession on its tenants, there has so far been little sign of increased bad debts.

Company Web site: www.warnerestate.co.uk

-By Rachael Gormley, Dow Jones Newswires; 44-20-7842-9308; rachael.gormley@dowjones.com

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