Final Results

For immediate release

                                                                 28 April, 2004

                      Panther Securities PLC ('Panther')                       

                 Results for the year ended 31st December 2003                 

CHAIRMAN'S STATEMENT

Introduction

 

I am delighted to report the results for the year ended 31st December 2003.
Pre-tax profits amount to £3,413,000 compared to £2,956,000 for previous year.
The rental income receivable for the year rose to £9,100,000 compared with £
8,000,000.

This year the vast majority of our portfolio was independently revalued by
Donaldsons. This valuation revealed an increase in value of our investment
portfolio of approximately £11,400,000 so not only are our profits at near
record levels but our net asset value has increased by an impressive 30% from
226.2p to 294.8p per share. The revaluation of our properties held as trading
stock revealed a potential surplus of £3,180,000 which, after allowing for tax,
would produce an extra net asset value of 13p per share. Stock revaluations in
excess of cost are not included in the accounts.

Disposals

 

The only property disposals were 3 small freehold shops in Cheam, sold
profitably, which were part of our trading stock.

 

Acquisitions

In August 2003 we acquired 32 & 32A Darley Street, Bradford. This property,
located in the best part of the pedestrianised section of Bradford, cost £1.82
million and produces approximately £150,000 per annum exclusive from
Specsavers, Orange Group and Game Station. Included in the property is some
vacant space that could be refurbished to produce extra income and we are
currently investigating this possibility.

In December 2003 we acquired 29, 59 and 61 Central Avenue, West Molesey,
Surrey. These three properties are mainly single storey freehold factories with
a total floor space of approximately 80,000 sq ft. The properties were
purchased from the administrative receiver of Arcolectric Holdings PLC for £3.6
million. The properties were simultaneously leased to Elektron PLC at £417,500
p.a. on 10 year full repairing and insuring leases.

To provide Elektron PLC with additional working capital and assist with the
purchase of the majority of Arcolectric's business from the receiver, Panther
formed and then sold Aridmark Limited, whose sole asset was £500,000 cash in
exchange for 9,090,909 shares in Elektron (equivalent to a value of 5.5p per
Elektron ordinary share). This resulted in Panther holding approximately 11.9%
of Elektron's enlarged capital. Elektron PLC is AIM listed and carries out a
similar electrical parts manufacturing business as the former Arcolectric PLC.
We are optimistic that this acquisition will produce substantial benefits for
Elektron PLC which hopefully will in due course be reflected in the value of
our shareholding in this company.

Bid for Oakburn Properties PLC

I, together with my personal pension fund, held 29.9% of an AIM listed property
company called Grosvenor Land PLC. As with so many small property companies,
the management enjoyed a disproportionate share of benefits from the company.
Panther was in the process of purchasing these shares on favourable terms to
Panther with a view to making a bid for Grosvenor. When however Grosvenor's
management became aware of possible bid intentions, they issued new shares for
cash and purchased a property company partly paying for the acquisition with
new shares. This appeared to give the management and its associates over 42% of
the voting rights making an unwelcome take-over bid virtually impossible.

29% of the Grosvenor Land shares (listed under directors' interests) were held
by Oakburn Properties PLC and I became aware that not all shareholders of this
company were happy. In fact, some were keen to sell.

On 17th October 2003 Panther announced it would bid for Oakburn. On 23rd
October Panther purchased 225,000 Oakburn shares at 576.67p per share
representing 26.6% of its capital and on 29th October a further 22,124 Oakburn
shares were purchased at the same price.

The family directors of Oakburn outmanoeuvred us by finding a 'white knight' to
partner them and outbid us. We therefore failed in our attempt to obtain
control of Grosvenor Land PLC but this failure was more than compensated by the
£450,000 profit (before costs) on the sale of our shares. Shareholders will be
pleased to note that the successful bidder for Oakburn, Terrace Hill Group PLC,
was subsequently obliged to bid for the entire share capital of Grosvenor Land
PLC.

Eurocity Properties PLC

 

Our successful bid for Eurocity PLC was completed in January 2003. Having
removed the majority of the group's management costs Eurocity produced a profit
contribution to our Group of approximately £350,000 through rental profits
alone.

Panther House Redevelopment

 

As mentioned in my interim statement we have agreed terms with two potential
purchasers to sell the entire Panther House/Grays Inn Road/Churchills Pub site.
Under terms agreed with both these potential purchasers we would receive an
initial substantial sum and a share of the profits on any future redevelopment.
Due to the revaluation of our properties the proposed initial price is only
slightly ahead of the new book value. However our profit share is speculative
and not immediately quantifiable but in the event of a successful development
by the purchaser, we would expect to receive extra profits some time in the
future. A sale of this size may require shareholders approval in due course.

Bristol Redevelopment

I can only reiterate what I said in my interim statement. Whilst it appears
that Wm Morrison Supermarkets PLC have now obtained their required changes to
implement the scheme, we have indicated to Bristol City Council that we are not
prepared to proceed with the joint venture unless there is a more realistic
assessment placed on the value of our interests. Our own local valuers indicate
that even under compulsory purchase we would receive better terms than
currently offered by Bristol Council who still insist on an excessive amount of
social benefits to be paid out from the funds raised from the sale of the site.

Tax & Regulations

For the last four or five years I have devoted a substantial part of my
statement complaining about the ever increasing tax burdens and 'red tape'
regulations which continue to hamper the business environment and this year is
no exception.

This country's tax system penalises enterprise, initiative, hard work, success
and self-sufficiency whereas laziness, dependency on the state and fecklessness
are encouraged.

Our Government presents much of the legislation they propose in a deceptive
manner. It penalises and restricts private pensions but massively increases its
own. One of the Government's first actions upon coming into power was to tax
pension funds, inevitably weakening substantially those that were less well
funded. It now proposes that the remaining solvent private company pension
funds pay into a safety fund to protect those pensions whose funds fail in the
future. It seems to me that the £5-6 billion tax taken from pension funds
probably all goes to pay the Government's own bureaucrats' pensions which have
cast iron guarantees. All these former state employees' pensions should have a
1% or 2% 'security' charge to provide a fund to assist those who lose out
through no fault of their own and whose pension had no public guarantee.

'New Labour'! came into power in 1997 and achieved their dream, the right to
spend Other Peoples Money. The property industry has been heavily targeted.
Stamp Duty on larger property purchases has been raised 400% and recently Stamp
Duty on new leases has been raised massively, in some cases more than 1000%.

The obvious result of this is that many investors try to avoid (that's legal)
this tax on investment. The Government's response to this is to introduce more
red tape. On every purchase a new seven page form with 71 questions has to be
completed and submitted to the Inland Revenue. The time cost for solicitors
dealing with the form (up to 1 hour) is paid by the purchaser. However there
has to be a bureaucrat checking that the forms are correct. He has to be paid
and pensioned. This of course is paid out of our taxes creating yet more waste.

Property owners have been subjected to an avalanche of new health & safety and
building regulations, disability regulations etc. The cost falls upon the
owners or users of property. The benefits are unquantified but probably minimal
but the costs huge and probably unquantifiable.

The latest daft piece of legislation is the Proceeds of Crime Act which forced
many solicitors, accountants and estate agents to write to their clients
informing them that if they believe that a crime had been committed they must
report it to the authorities without telling the client. When you have had a
longstanding relationship with a client for many years, it is an insult to be
forced to treat them in this manner. What makes the situation more farcical is
that what constitutes a crime doesn't just cover the house agent who buys two
tons of fertiliser, a couple of barrels of diesel oil and an old white van on
his business account which would seem suspicious, but it also covers a
secretary using the office stamps to post her personal Christmas cards or an
employee who inflates his expenses or indeed any other trivial misdemeanour
that would normally go unreported. The penalty for failing to report the crime
being far more severe than any possible penalty for the 'crime'. You truly have
to have taken leave of your senses if you believe that this type of legislation
will help to prevent the type of terrorism it is aiming to prevent. However, it
will necessitate employing many thousands of bureaucrats to supervise the
system. Surely we would be better protected with these extra functionaries
guarding our ports of entry. I am forever amazed at the complete lack of common
sense in this Government which is legislatively incontinent and incompetent.

There has been mention of possible legislation to allow listed property
companies such as ours to convert to Real Estate Investment Trusts (REIT's) and
in particular the creation of REIT's for purely residential investment. In
other countries REITS receive favourable tax treatment. However expecting any
tax concessions from this Government is akin to expecting the shareholders
cocktail party to be a lasting success having invited Lucretia Borgia to mix
the cocktails.

I believe that this Government has been bad for industry and the property
industry in particular and will continue to be unreasonable. Their most recent
budget even introduces a form of retrospective property tax legislation, i.e.,
a transaction that was legitimate when carried out, perhaps some years ago,
would now carry a special penal tax liability. Any Government that brings in
retrospective tax legislation is threatening the very basis of business life.

I have added an extra resolution to our normal resolutions for shareholders to
consider. This is that the company should donate £25,000 to the Conservative
Party. As this is my personal suggestion I will not vote my controlling
shareholding but would hope that not only will the main body of shareholders
support the resolution but also that many other property companies will follow
our lead and carry out similar moves to emphasise their distaste for the
heavy-handed tax treatment and interference in their industry.

Most of our shareholders are private individuals who probably own their own
home and sleep content in those homes secure in the knowledge of its
substantial capital appreciation over the years. However, whilst they sleep
soundly they should be aware our Chancellor probably lies awake at night trying
to devise ways of taxing this great tsunami of capital wealth. His problem is
not how to tax, that's easy, but how to do it in such a way as to be able to
disguise it under another name and justify the new imposition by saying
something such as 'this charge is an environmentally sound and economically
advantageous way to produce a fair and prudent allocation of national resources
towards those less advantaged in our society' whereas this is a euphemism for
'rob the careful and prudent to buy votes from the foolish, the feckless and
the fiddlers' as we already have sufficiently high tax rates to support the
genuinely disadvantaged members of society.

Finance

Due to the increased value of our investment portfolio we have recently agreed
to draw down the balance of our loan facility with HSBC and will thus have a
total sum of £11 million cash available for further investment.

Dividends

 

On 20th June 2003 we paid a special 30th anniversary dividend of 5p per share.
Additionally on 31st October 2003 we paid a 3.5p interim dividend and it is
your Board's intention to recommend a final dividend of 4p per share.

 

Outlook

 

Most major developed countries run monumental Government budget deficits and
consequently rely on borrowing untold billions of dollars, pounds, yen or euros
from the private sector. This probably exacerbates currency instability and
volatility. With oil and commodity prices at extreme highs, although thankfully
currently cushioned by a dollar depreciation, is there not a strong possibility
that some major upset will cause interest rates to rise much higher than
anticipated? If this happens it will cause problems for many companies,
particularly property companies who are very highly geared or indeed the many
private residential owners and investors who have taken the view that
residential property only ever increases in value and have geared up
accordingly.

Because of these concerns we have adopted a cautious approach to expansion but
with our finance arrangements at fixed rates, substantial liquidity and
positive cash flow from our wide mixed property portfolio spread throughout the
country, we believe our company will continue to prosper.

Finally I would like to thank all our staff, professional advisors and the
numerous firms we deal with and of course our tenants who have helped to make
this another successful year.

A.S. Perloff

Chairman

28 April 2004

Consolidated Profit and Loss Account

for the year ended 31 December 2003

                                                   2003        2002
                                                                   
                                                  £'000       £'000
                                                                   
Turnover                                          9,791       8,240
                                                                   
Cost of sales                                   (1,654)     (1,389)
                                                                   
Gross Profit                                      8,137       6,851
                                                                   
Administrative expenses                         (1,336)     (1,194)
                                                                   
Operating profit                                  6,801       5,657
                                                                   
Income from current asset investments               426           -
                                                                   
(Loss)/Income from participating interests         (67)           9
                                                                   
Profit on disposal of property                        -         342
                                                                   
Loss on disposal of investments                    (20)           -
                                                                   
Profit on ordinary activities before              7,140       6,008
interest                                                           
                                                                   
Interest receivable                                 293         327
                                                                   
Interest payable                                (4,020)     (3,379)
                                                                   
Profit on ordinary activities before              3,413       2,956
taxation                                                           
                                                                   
Taxation                                          (880)       (951)
                                                                   
Profit on ordinary activities after               2,533       2,005
taxation                                                           
                                                                   
Minority interests                                    9        (11)
                                                                   
Profit attributable to members of the             2,542       1,994
parent undertaking                                                 
                                                                   
Dividends                                       (2,125)     (1,183)
                                                                   
Retained profit for the year                        417         811
                                                                   
Transferred from revaluation reserve                  -         151
                                                                   
Purchase of own shares                                -        (67)
                                                                   
Transfer from negative goodwill reserve               -         911
                                                                   
Retained profit brought forward                  12,297      10,491
                                                                   
Retained profit carried forward                  12,714      12,297
                                                                   
Earnings per share                                15.0p       11.8p

Consolidated Balance Sheet

as at 31 December 2003

                                                   2003        2002
                                                                   
                                                  £'000       £'000
                                                                   
Fixed assets                                                       
                                                                   
Tangible assets                                  93,996      79,769
                                                                   
Intangible asset - negative goodwill              (793)       (893)
                                                                   
Investments                                         223         290
                                                                   
                                                 93,426      79,166
                                                                   
Current assets                                                     
                                                                   
Stock                                             8,790       7,147
                                                                   
Current asset investments                         1,297       1,015
                                                                   
Debtors: due within one year                      5,580       1,999
                                                                   
Cash at bank and in hand                          2,444       9,690
                                                                   
                                                 18,111      19,851
                                                                   
Creditors: amounts falling due within one       (5,767)     (7,258)
year                                                               
                                                                   
Net current assets                               12,344      12,593
                                                                   
Total assets less current liabilities           105,770      91,759
                                                                   
Creditors: amounts falling due after more      (55,576)    (53,253)
than one year                                                      
                                                                   
Minority interests                                 (90)       (266)
                                                                   
Net assets                                       50,104      38,240
                                                                   
Capital and reserves                                               
                                                                   
Called up share capital                           4,250       4,226
                                                                   
Share premium account                             2,886       2,862
                                                                   
Revaluation reserve                              29,471      18,072
                                                                   
Capital redemption reserve                          571         571
                                                                   
Negative goodwill reserve                           212         212
                                                                   
Profit and loss account                          12,714      12,297
                                                                   
Equity shareholders' funds                       50,104      38,240
                                                                   
Net assets per share                             294.8p      226.2p

Consolidated Cash Flow Statement

for the year ended 31st December 2003

                                                2003                2002       
                                                                               
                                             £'000     £'000    £'000     £'000
                                                                               
Cash flow from operating activities                    2,242              3,651
                                                                               
Returns on investments and servicing of              (3,727)            (3,052)
finance                                                                        
                                                                               
Taxation                                             (1,097)              (864)
                                                                               
Investing activities                                 (3,388)            (7,464)
                                                                               
Acquisitions and disposals                                 -              (507)
                                                                               
Equity dividends paid                                (2,036)            (1,524)
                                                                               
Cash outflow before financing                        (8,006)            (9,760)
                                                                               
Financing                                                                      
                                                                               
Net proceeds of share issue                     48                  -          
                                                                               
Increase in debt                               750             10,289          
                                                                               
Purchase of own shares                           -               (67)          
                                                                               
                                                         798             10,222
                                                                               
(Reduction)/Increase in cash in the                  (7,208)                462
period                                                                         
                                                                               
Reconciliation of net cash flow to                                             
movement in net debt                                                           
                                                                               
(Reduction)/Increase in cash in the        (7,208)                462          
period                                                                         
                                                                               
Cash inflow from increase in debt            (750)           (10,289)          
                                                                               
Loans acquired on acquisition                    -            (8,094)          
                                                                               
Change in net debt resulting from cash               (7,958)           (17,921)
flows                                                                          
                                                                               
Movement in net debt in the period                   (7,958)           (17,921)
                                                                               
Net debt at 1st January 2003                        (46,019)           (28,098)
                                                                               
Net debt at 31st December 2003                      (53,977)           (46,019)

                                                 At 1st        Cash     At 31st
                                                                               
                                                January        Cash    December
                                                                               
                                                   2003        Flow        2003
                                                                               
                                                  £'000        2002       £'000
                                                                               
                                                              £'000            
                                                                               
Analysis of net debt                                                           
                                                                               
Cash at bank                                      9,690     (7,246)       2,444
                                                                               
Overdrafts                                         (39)          39           -
                                                                               
                                                  9,651     (7,207)       2,444
                                                                               
Net debt due after 1 year                      (53,252)     (2,325)    (55,577)
                                                                               
Net debt due within 1 year                      (2,418)       1,574       (844)
                                                                               
                                               (55,670)       (751)    (56,421)
                                                                               
Total                                          (46,019)     (7,958)    (53,977)

Consolidated statement of total recognised gains and losses

For the year ended 31st December 2003

                                                   2003        2002
                                                                   
                                                  £'000       £'000
                                                                   
Profit for the financial year after               2,533       2,005
taxation                                                           
                                                                   
Unrealised surplus on revaluation of             11,399         310
properties and investments                                         
                                                                   
Total gains and losses relating to the           13,932       2,315
year                                                               

Note of consolidated historical cost profits and losses

For the year ended 31st December 2003

                                                   2003        2002
                                                                   
                                                  £'000       £'000
                                                                   
Reported profit on ordinary activities            3,413       2,956
before taxation                                                    
                                                                   
Realisation of property revaluation gains             -         151
                                                                   
Historical cost profit before taxation            3,413       3,107
                                                                   
Historical cost retained profit                     417       1,806

Notes to the Results

Notes

1. Dividends

The Company has already paid a special dividend of 5p (2002: nil) and interim
dividend of 3.5p per share (net) (2002: 3.5p (net)) and the Directors now
recommend payment of a final dividend of 4p per share (net) (2002: 3.5p (net)).
The final dividend will be payable on 25th June 2004 to shareholders on the
register at the close of business on 28th May 2004.

2. Earnings per ordinary share

The calculation of earnings per ordinary share is based on earnings, after
minority interests, of £2,542,000 (2002 - £1,994,000) and on 16,992,408
ordinary shares being the weighted average number of ordinary shares in issue
during the year (2002 - 16,926,761).

3. Report and Accounts

The financial information for the year ended 31st December 2002 is extracted
from the group's financial statements to that date which received an
unqualified auditor's report and have been filed with the Registrar of
Companies.

The financial information presented does not constitute statutory accounts as
defined in Section 240 of the Companies Act 1985. The results for the year
ended 31st December 2003 have been extracted from the group's financial
statements to that date which received an unqualified auditor's report and will
be filed with the Registrar of Companies in due course.

4. Annual General Meeting

The Annual General Meeting will be held on 16th June 2004.

5. Copies of the Report and Accounts will be posted to shareholders shortly and
will be available from the Company's registered office at Panther House, 38
Mount Pleasant, London WC1X 0AP.

Further Enquiries:

Panther Securities P.L.C

Peter Rowson 020 7278 8011

John East & Partners

David Worlidge 020 7628 2200