Final Results and Notice of AGM

30 May 2008 PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE 12 MONTHS TO 31 DECEMBER 2007 Highlights: * Rental income lower at £7,496,055 (2006: £11,872,497) * Significant property disposals in the first part of the year * Full year dividend increased by 22 % to 5.5 pence (net) per share (2006: 4.5 pence) * Net asset value at year end 302 pence per share (2006: 405 pence) Mark Rubin, Chief Executive commented: "Our risk averse strategy has enabled us to come through the year relatively unscathed. Our conservative approach has been vindicated and we are now well placed to take advantage of investment opportunities as increasing realism returns to valuations" ------------------------------------ For further information please contact: Mark Rubin Chief Executive 01702 293300 Jonathan Williams Bishop Fleming (Corporate Adviser ) 0117 910 0250 Anthony Spiro Spiro Financial (Press and Investor 020 8336 6196 Relations) ------------------------------------ GSC Property Holdings specialises in commercial property investment in the UK. The company's strategy is to spread risk through building a diverse portfolio to minimise exposure to any single end use or geographical area. Our objective is to add maximum value for shareholders. ------------------------------------ CHAIRMAN'S STATEMENT In the year to 31 December 2007 the Company delivered a solid set of results from its property investment business against a background of change and upheaval in its principal market, particularly in the latter months of the year. The Company's rental revenue was lower at £7,496,055 compared with £11,872,497 in 2006. This reduction reflected significant property disposals in the first part of the year and also the temporary closure of the Metro Palace Court Hotel in Bournemouth for planned major refurbishment. The operating profit for the period was £3,795,012 (2006: £6,471,735). The directors are recommending a final dividend of 3.0 pence per share (2006: 2.5 pence per share). The total dividend for the year is 5.5 pence per share (2007: 4.5 pence per share). It will be paid on 27 June 2008 to shareholders on the register on 6 June 2008. The Annual General Meeting of the Company will be held on 26 June 2008 at Courtway House, 129 Hamlet Court Road, Westcliff on Sea, Essex at 11am. GSC's balance sheet remains strong and generally unaffected by the movement in bank lending costs as virtually all borrowings are long term and at fixed rates. Our principal bankers are Norwich Union and Lloyds TSB and these relationships stretch back many years. The global credit problems, which became apparent in certain sections of the financial markets in the second half of 2007, have had a significant and continuing knock-on effect on UK property investment and valuations. GSC is relatively unaffected by these market problems and this strength reflects the appropriateness of management's cautious and conservative approach. Property values have eased from what were, in some areas, unsustainable levels and yields have risen. There is no doubt that it will be a while before normality returns to the market and in the meantime GSC will continue to manage its property portfolio and seek opportunities as they arise. It is likely that the credit crunch may produce some attractive purchase opportunities and the company is ready to respond rapidly should the right situation arise. In March 2007 the Company completed two property acquisitions and one disposal. In Rugby the company bought five shops and a linked site; the second purchase was in Gloucester where the company acquired shops and offices. The Rugby properties produced £52,000 per annum and had an outstanding rent review. The Gloucester properties produced £194,400 per annum. The total consideration of £ 3.85 million comprised £3.05 million in cash and the issue of 200,000 new shares underwritten at 400 pence. The company also sold shop units in Southend for a cash consideration of £1.5 million. The property generated a rental income of £84,000, which was substantially in excess of its recent valuation. In September the Company completed the disposal of the Quality Hotel, Cardiff for a cash consideration of £8.87 million. The 95 room hotel was purchased in September 2006 and was on a 99 year lease, which commenced in 1994, with an annual rental income of £492,944; the sale price equates to a net exit yield of 5.25%. The Metro Palace Court Hotel in Bournemouth, which closed in the Autumn of 2006 for an £8 million refurbishment, will re-open on schedule in early June. Whilst the hotel was closed the other operations on the site continued and the rental stream to GSC virtually covered the interest payable on the original purchase. GSC has always focused on owning quality properties with first class covenants. Management, in line with its normal cautious approach, has reviewed the book values of all its properties and decided to make adjustments to reflect market conditions. The book value has also been impacted by the property sales in March and September 2007. The overall effect of all these actions resulted in the company's net asset value per share at the year-end standing at 302 pence compared with 405 pence in 2006. This has been a challenging year and the Company has emerged in a strong position very well placed to take advantage of opportunities as they arise. Our strategy has always been to invest in good buildings with unrealised potential and that ensured that we did not overpay in an overheated market. Our properties are well let and conservatively valued and this strength, backed by a sound balance sheet and long term financing, allows us to look forward with confidence Alan Gershlick Chairman 30 May 2008 EXTRACT FROM AUDITED FULL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007 CONSOLIDATED PROFIT AND LOSS ACCOUNT Note 2007 2006 £ £ TURNOVER Continuing Operations 7,496,055 10,758,416 Discontinued Operations - 1,114,081 --------------- --------------- Group Turnover 7,496,055 11,872,497 Cost of sales (329,408) (2,017,780) --------------- --------------- GROSS PROFIT 7,166,647 9,854,717 Distribution costs (25,079) (25,744) Administrative expenses (2,480,647 (3,357,238) Assets held for sale - Fair Value Adjustment (865,909) - --------------- --------------- OPERATING PROFIT Continuing Operations 3,967,451 6,535,727 Discontinued Operations (172,439) (63,992) Group Operating Profit 3,795,012 6,471,735 Profit on disposal of fixed assets and (180,001) 65,950 investments Interest receivable and similar income 165,669 255,592 Interest payable (5,328,511) (4,930,509) --------------- --------------- (Loss) / Profit on ordinary activities (1,547,831) 1,862,768 before taxation Tax on profit on ordinary activities - (292,994) --------------- --------------- (Loss) / Profit for the Financial Year (1,547,831) 1,569,774 ========= ========= Basic Earnings per share (pence) (14.85) 15.39 Adjusted Earnings per share (pence) (96.77) 62.63 Weighted average number of ordinary shares 10,423,616 10,199,726 in issue STATEMENT OF GROUP TOTAL RECOGNISED GAINS AND LOSSES 2007 2006 £ £ (Loss) / Profit for the financial year (1,547,831) 1,569,774 attributable to the shareholders Unrealised (deficit) / surplus on investment (8,538,886) 4,818,174 properties ------------- ------------- Total gains and losses recognised since the last (10,086,717) 6,387,948 annual report ======== ======= NOTE OF GROUP HISTORICAL COST PROFIT AND LOSS 2007 2006 £ £ (Loss) / Profit before tax (1,547,831) 1,862,768 Realisation of valuation gains of previous 829,266 - periods ------------- ------------- Historical cost (loss) / profit before tax (718,565) 1,862,768 ======== ======== CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2007 2007 2006 £ £ FIXED ASSETS Intangible assets 299,465 317,081 Tangible assets 3,751,302 3,785,140 Investment Properties 93,894,000 105,497,542 --------------- -------------- 97,944,767 109,599,763 --------------- -------------- CURRENT ASSETS Stock 13,124 13,352 Assets held for sale 22,500,000 22,721,562 Debtors 1,308,953 2,316,608 Investments 200 200 Cash at bank 3,237,947 1,510,839 --------------- ------------- 27,060,224 26,562,561 --------------- ------------- CREDITORS: Amounts falling due within one year (24,886,613) (12,242,030) --------------- ------------- NET CURRENT ASSETS 2,173,611 14,320,531 --------------- ------------- TOTAL ASSETS LESS CURRENT LIABILITIES 100,118,378 123,920,294 CREDITORS: Amounts falling due after more than (68,463,212) (82,339,365) one year --------------- -------------- 31,655,166 41,580,929 ========= ======== CAPITAL AND RESERVES Called-up equity share capital 104,680 102,680 Share premium account 1,414,350 716,350 Revaluation Reserve 21,659,521 31,027,674 Profit and loss account 8,476,615 9,734,225 --------------- -------------- SHAREHOLDERS' FUNDS 31,655,166 41,580,929 ========= ======== NOTES TO THE FINAL RESULTS 1. DIVIDENDS 2007 2006 £ £ Interim dividend paid at 2.5p per share (2006 - 261,700 203,960 2.0p) Prior period final dividend paid at 2.701p per 277,347 254,950 share (2006 - 2.5p) ------------- ------------- 539,047 458,910 ======= ======= 2. EARNINGS PER SHARE Basic earnings per share have been calculated to report only distributable earnings arising in the period and do not include movements through the revaluation reserve. Adjusted earnings per share have been calculated to include total earnings attributable to equity shareholders arising in the period. The reconciliation between the two is shown below: 2007 2006 £ £ (Loss) / Profit after tax attributable to (1,547,831) 1,569,774 the shareholders Unrealised (losses) / gains arising on the (8,538,886) 4,818,174 revaluation of investment property ---------------- ------------- Total (losses) / gains attributable to the (10,086,717) 6,387,948 shareholders ========= ======== Adjusted shares in issue 10,423,616 10,199,726 Pence Pence Basic earning per share (14.85) 15.39 Unrealised (losses) / gains arising on the (81.92) 47.24 revaluation of investment ------------- ------------- Adjusted earnings per share (96.77) 62.63 ======== ======== 3. SHARE CAPITAL Authorised share capital 2007 2006 £ £ 100,000,000 Ordinary shares of 1,000,000 1,000,000 1p each ======== ======= 2007 2007 2006 2006 No £ No £ Allotted and called up Ordinary shares of 1p each 10,468,000 104,680 10,268,000 102,680 ======== ======= ======== ======= 4. GROUP RESERVES Share premium account 2007 2006 £ £ Balance brought forward 716,350 502,500 Premium on shares issued in the year 698,000 213,850 ------------- ----------- Balance carried forward 1,414,350 716,350 ======= ====== Revaluation reserve 2007 2006 £ £ Balance brought forward 31,027,674 26,209,500 Revaluation of investments in the year (8.538,887) 4,818,174 Transfer to profit and loss account on disposal (829,266) - of properties --------------- -------------- Balance carried forward 21,629,521 31,027,674 ======== ======== Profit and loss account 2007 2006 £ £ Balance brought forward 9,734,225 8,623,360 (Loss) / profit for the year (1,547,831) 1,569,775 Transfer from revaluation reserve on disposal of 829,266 - properties Equity dividends paid (539,047) (458,910) -------------- -------------- 8,476,613 9,734,225 ======== ======== 5. ANNUAL GENERAL MEETING The Annual General Meeting of the Company will be held on 26 June 2008 at Courtway House, 129 Hamlet Court Road, Westcliff on Sea, Essex at 11am. The directors of GSC Property Holdings plc accept responsibility for this announcement.

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