West Bromwich-based Real Estate Investors, the AIM-listed company run by property investor Paul Bassi, has announced a major improvement in first half results.

The company said yesterday that in the six months to June 30 it had made a pre-tax profit of £2.9 million, this compares with a loss of £267,000 in the same period last year.

In the year to date, the company has built up its net assets by six per cent to £36 million. It also has cash available on its balance sheet of £10.9 million to fund further acquisitions.

Chief executive Mr Bassi said: "These results provide an excellent foundation for the future growth of the business. We are perfectly positioned to capitalise on the opportunities in the present market place."

During the first six months the company acquired Guardian House in West Bromwich for £4.5 million and Avon House in Bromsgrove for £5.2 million, where terms have recently been agreed on a major letting. The acquisitions were purchased from cash resources.

Work carried out during the half year included the refurbishment of the £6.35 million office building on the corner of Colmore Row and Bennetts Hill in the city centre.

Together with Avon House, the properties have achieved new lettings and renewals to Investbx, Bigwoods Chartered Surveyors, Select and Weststaff UK.

REI chairman Peter Lewin said the company was accelerating its activities with several strategic acquisitions and disposals. He added that the company's cash balances, together with its debt-free properties - which are benefiting from rising rental income and capital values - were enabling it to take advantage of market opportunities.

Mr Lewin said confidence in the company's management, following the £25 million institutional placing in December, had been further enhanced by substantial market purchases of ordinary shares by Mr Bassi resulting in his shareholding increasing to 17.46 per cent.

"We believe that the company is on course to achieving its objective of building a £150 million portfolio and the recent off market purchases have established REI as a well respected investor in the West Midlands commercial property markets.

"The strategy of adding value to the portfolio is exemplified by refurbishments and subsequent lettings which, together with rent reviews, improve yields and capital values, are contributing to profitability," he said. He said the firm's strong balance sheet put it in a dominant position to take advantage of an increasingly opportunistic market.