Final Results

Caledonian Trust PLC
19 December 2000


CHAIRMAN'S STATEMENT

YEAR ENDED 30 JUNE 2000


Introduction

The Group made a profit of £1,138,806 in the year to 30 June 2000 compared to
£1,305,971 last year.  This year's profit includes £385,616 from the sale of
trading properties and £126,346 from the sale of an investment property
whereas last year one investment property sold for a profit of £205,000.

Rents and service charges were similar to last year but property outgoings
increased from £93,284 to £847,342, due to the current property repairs at St
Magnus, Aberdeen.  Administrative expenses increased by £125,116 due primarily
to the professional fees for the two new major lettings at St Magnus, but net
interest payable fell to £1,156,216 from £1,570,421 last year.  Earnings per
share were 9.27p compared with 10.63p last year but the value of the Group's
investment portfolio, excluding the investments sold during the year,
increased by a net £4.192m.  The Group's NAV increased by (£5.241m), and the
NAV per share increased by 43.3p to 132.9p.

During the financial year the weighted average base rate was 5.58% compared
with 6.33% last year, and weighted average three month LIBOR was 5.83%
compared with 6.28%.  These reduced rates together with reduced net
borrowings, because of continuing amortisation and property sales, reduced
interest charged by £414,205.  If base rate remains unchanged until a 0.25%
point drop on 10 May 2001, as predicted by Royal Bank of Scotland then base
rates will average 6.0% in the first half of the current financial year and
5.9% for the full year.

On 30 June 2000 the Group's portfolio comprised by value 68.5% office
investment property (of which 85.3% is open plan) 19.5% industrial investment
property,

1.8% retail investment property and 10.2% property held for development.


Review of Activities

The most important changes over the year have occurred in St Magnus House, our
80,137ft(2) modern open plan office in Aberdeen city centre.  Last year I
reported that Abbey National PLC's lease of 7,535ft(2) there determined in
September 1999, that National Oilwell's lease of the 11,400ft(2) top floor was
to end in February 2000, and that Baroid Limited had negotiated an early
surrender of their lease of  the 13,391ft(2) fifth floor.  I said we hoped to
lease the top floor to a blue chip tenant, and we did agree a new 15 year
lease of that floor with the Scottish Ministers commencing on 13 March 2000
for occupation by the newly created Food Standards Agency.  This floor was
entirely refurbished and the specification now includes raised floors and
comfort cooling.  Shortly afterwards we entered into negotiations with
Enterprise Oil PLC for a new 15 year lease with a 10 year break for floors 2 -
5 inclusive (55,352ft(2)).  At this time specialist survey reports on the
building revealed a fundamental flaw in the curtain walling which necessitated
its replacement at a cost of about £2.25m, of which a substantial amount is
recoverable from the tenants.  This work was undertaken by the Company at the
same time as the upgrading and refurbishment of floors 2 - 5 which
incorporated the provision of raised floors and comfort cooling, and the main
electricity supply had to be substantially upgraded.  This contract, which ran
from early June until late November, also included the internal fit out of all
Enterprise's floors to an exceptionally high standard and was completed to
enable Enterprise to take occupation and operate from St Magnus from
mid-November.  The contract sum totalled approximately £5.5million and was
completed in five months - a demanding timetable.  As one occupier said 'I
think we have witnessed that rare thing of a team coming together and
surprising themselves with the outstanding nature of their creation.'  This
very considerable upgrading, together with the quality of the fit out, the new
long term leases to excellent covenants and the position of St Magnus in the
centre of the city confirm the outstanding investment quality of this
property.

The investment value is likely to be further enhanced as two suites on the
first floor totalling 4,740ft(2) will be upgraded to the same standard and
offered for lease at a rent reflecting the new premium quality of the
building.  Also, the 10 acre site immediately south of St Magnus comprising
mainly redundant railway sheds, goods yard and bus and rail terminals has
received planning permission for a comprehensive retail and leisure
redevelopment by Stannifer Properties and Railtrack PLC.  When this
development proceeds St Magnus' prime position will be further enhanced.

Stoneywood Business Centre, our office and industrial property at Dyce,
Aberdeen, comprises 14 separate premises, many of them let on short leases.
As I reported last year, Royal Bridge Leisure, who operated a 61,000ft(2) twin
indoor go-kart track and leisure centre, went into liquidation in February
1999.  By repossessing the premises and protecting most of the fixed
specialised equipment associated with the karting operation we were able to
relet the premises to another operator, Kartstart, in December 1999.  Four
other smaller units have been let there over the last few months: Unit 4 to FN
Partnership in September 2000; Unit 6 to Welbourn Engineering in October 2000,
Unit 7 to Consafe in August 2000 and Unit 9 in December 2000.  The rent was
reviewed on Unit 11 earlier in the year where a nominal increase was obtained.
All the industrial units are currently let.  The 11,000ft(2) of offices
associated with Stoneywood are vacant although we have active interests in
them.  We continue to make small improvements that enhance the prominence and
amenity at Stoneywood.  In order to protect the long-term development
prospects for the site, and in keeping with the improving amenity and the
extended leisure use, we are continuing our appeal against the current
industrial designation in the draft local plan.

The main change in our Edinburgh investment portfolio has been the sale of
Albany Street for £637,000, approximately £126,000 above the 30 June 1999
valuation.  This property had been available to let for some considerable time
and the sale reflects the growing interest by owner-occupiers for Edinburgh
Georgian townhouses.  Our townhouse property, 9 South Charlotte Street, which
has planning permission for restaurant use is now under offer subject to
planning permission being obtained for the tenants' proposed signage.  This
site has proved very attractive to many operators but their signage
requirements, which were much more comprehensive than the current proposal,
have never proved acceptable to Historic Scotland.  The lease on 57 North
Castle Street has recently determined and the dilapidations have been paid.
This property will be refurbished early in 2001 when, due to its excellent
quality and location, we expect considerable interest in the improving market.

Our largest investment property in Edinburgh, St Margaret's House, a 92,845ft
(2) open- plan office let to Secretary of State for the Environment until
November 2002, is being appraised for many different uses.  Detailed
discussions continue with the existing occupant who has been offered a wide
range of proposals, but the uncertainty of both their operational requirements
and of political considerations inhibits forward planning.  Refurbishments to
varying standards of finish are being considered and appear an increasingly
attractive option in the current market.  We are also considering an extensive
remodelling and redevelopment of the existing building together with an
extension, and the possibility of a demolition and redevelopment of the site.
A more comprehensive redevelopment incorporating the adjacent property, which
could provide up to 400,000ft(2) on the combined sites, is a more radical
proposal but given the government ownership of the adjacent site and the
administrative, financial and political difficulties associated with such a
comprehensive plan would be difficult to achieve.  Outline plans are being
considered for residential use and for conversion to student accommodation for
which there is reported to be a growing demand.

One option being considered is to convert the building so it is suitable for a
large number of tenants, possibly on flexible lease terms where they will
benefit from modern open-plan space, near the city centre, at moderate,
affordable cost without the trappings and responsibility of long leases, with
varying degrees of services added.  Unlike most other UK cities, there is no
such similar provision in Edinburgh at present and as the number and type of
users of open-plan space widen beyond banks, insurance companies and
professional firms who have taken traditionally 'head office' or prime space,
there should be a growing requirement in Edinburgh for 'commercial' property
at rents of say 60% - 70% of prime.

There have also been several changes in our development property portfolio.  I
reported last year that the Brechin Arms and the Carrochan Inn at Balloch had
been sold in September and realised a combined profit of about £85,000.
Unfortunately in January 2000 the tenant of our other two licensed premises
went into liquidation and we continue to trade them.

We are currently negotiating a lease renewal of our property at Baylis Road
near Waterloo, SE1.  Due to the improved infrastructural arrangements at
Waterloo and the amazing growth of the residential and office market nearby
and in the West End both the residential and commercial values of Baylis Road
have improved very considerably.  Proposals are being prepared for a
residential development, for an office conversion based on the existing
Victorian warehouse, and for a complete redevelopment of offices on the site.
Our agents report strong interest in the area, which they now regard as '
central London' and indeed it is with the heart of Mayfair and St James six
minutes away by the new Jubilee connection.

Our office development in Belford Road Edinburgh, only a few minutes from
Charlotte Square, has at long last received an additional planning consent for
21,000ft(2) and eleven parking spaces.  This consent is for a building of
considerably better design and higher specification and amenity than
previously, and one which should also be significantly cheaper to build as
excavations and structural retention are considerably reduced and there are no
liabilities to third parties.  Negotiations are currently in train to appoint
the main professional advisers and to proceed to tender stage.

Residential prices have continued to rise in the Edinburgh area.  In the early
summer we eventually obtained detailed planning consent for five detached
houses on our development site at Eskbank, which borders an attractive
residential area less than one mile from the city bypass.  We expect to
receive tenders shortly and to commence construction early next year for
completion six months later.  Since the year end we acquired two further
development residential sites.  The first site, for about 8 houses, borders
Musselburgh, formerly a primarily industrial and mining town, now rapidly
being converted to a commuting suburb of Edinburgh.  The second site lies just
east of Dunbar, in an area zoned for housing and should accommodate about 17
houses.  Dunbar is currently experiencing a boom in residential development,
which will be reinforced by the extension of the A1 dual carriageway to just
beyond the town.  We expect these two residential sites to be suitable for
development in the medium term and we are currently attempting to secure other
sites, especially those more suitable for early residential development.


Economic Prospects

In September 1999 the Monetary Policy Committee of the Bank of England
reversed the interest rate trend and raised rates by 0.25% to 5.25% followed
by similar increases in November, January and February to 6.0% and most
forecasters expected rates to continue to rise with forward projected LIBOR
rates until 2003 over 7%.   However Base Rate has remained steady at 6% but
now the market sentiment has changed quite abruptly with forward projected
LIBOR rates of under 6% until December 2003. Many forecasters now expect a
rapid fall in base rate to 5.5% by the middle of next year.  Interest rate
prospects therefore seem favourable.

The Bank of England's quarterly inflation report expects inflation to be below
the 2.5% target throughout 2001 before edging up to the target level at the
end of 2002.   Current forecasts of interest rates and inflation have probably
been strongly influenced by recent figures which show that price inflation,
including mortgage interest payments, fell from 3.3% in the year to September
to 3.1% in October while underlying inflation (RPIX) fell from 2.2% to 2%
primarily as a result of the large drop in the service component of inflation
which early this year had been at over 4% but is now just under 3%.   Goods
inflation has been less than 1% for over a year.

There are two main factors which could jeopardise the continuation of low
inflation.   Generous pay rises are likely next year in the public services
given the shortages in some areas, the money available from the Government's
spending review and the forthcoming general election.    However, average
earnings growth at 4.1%, and much less in the private sector, are comfortably
below the 4.5% rate that is considered consistent with meeting inflationary
targets.

A second major threat would be deterioration in the exchange rate with a
consequent rise in some import prices.   Over the last two years Sterling has
appreciated against the Euro by approximately 18% although it has deteriorated
12% against the US Dollar.    The Royal Bank of Scotland project a fall of 9%
over the next two years against the Euro but an increase of 12% against the
Dollar.   On this basis the inflationary aspects of a depreciation against the
Euro would be partially or wholly offset by the deflationary rise against the
Dollar.

Given falling interest rates and stable inflation it is not surprising that
estimates for GNP growth in the UK are high.   The Economist's average poll of
forecasts estimates UK growth this year as 3% but falling to 2.6% next year.
These figures are above the current trend of 21/2% per year and without an
improvement in British productivity similar to that which may have been
experienced in the United States over the recent years represents the limit of
non-inflationary UK growth.   Economic growth should increase demand for
property and hence prices although the change in demand will vary between
sectors and areas.


Property Prospects

Since August 1999 the CB Hillier Parker All Property Yield, which has recently
been rebased, has risen 0.2% points to 6.7%, but the 10 year Gilt yield has
fallen by 0.1% points to 5.3% giving a yield gap of 1.4% points.  However, on
the 'old' basis that gap is about 2.8%, similar to the gap reported for the
last two years in which I reported that the All Property yield had exceeded
the Gilt yield only once previously, and then for only a brief period after
sterling was ejected from the ERM in September 1992.

Property traditionally was lower yielding than Gilts as investors obtained or
expected to obtain higher long-term returns from rental growth in property
without erosion of the asset value.  However this expectation has not been met
as property has performed poorly compared to other asset classes.  Over the 10
years to December 1999 property has given an annualised return of only 7.1%
compared with 14.6% for equities, 12.1% for Gilts and even 8.1% for cash.
Over the three years to 1999 property yielded 14.4% compared to 20.3% for
equities but 1.5% points more than Gilts. Another illustration of the malaise
that has affected the property sector is that rental levels, allowing for
inflation, are now still below the peak achieved about 10 years ago.  All
Property rents are 17% below that level and offices and industrials are 25%
lower, although shops are only 5% lower.  Some of the largest 'real' falls
have been in office properties in London.  Low rental growth has combined with
a much higher rate of obsolescence both in terms of property location and
property technical specification, giving increased depreciation costs to the
holding of some property assets and reduced returns.

The effect of years of poor performance in the property sector and good
performance in the equity and Gilt sector is now manifesting itself in several
important ways.  The market rating of listed property companies has
deteriorated greatly with most companies trading at very substantial discounts
to NAV, even after adjusting for the effects of marking debt to market and
allowing for capital gains tax on disposals.  This in turn is leading to
consolidation in the sector and a large number of buy-outs and take-overs.
These changes have occurred throughout the sector.  The fourth largest listed
company MEPC was bought out by GE Capital and Hermes for £1.96bn while other
notable disappearances include Bilton, Prestbury, Evans of Leeds, Greycoat,
and in Scotland Scottish Metropolitan and City Site Estates. In the midst of
this rapid contraction there has been one notable newcomer - Canary Wharf PLC,
whose investments are in Docklands where rentals have been rising rapidly.

The poor recent returns on property investment have not been restricted to the
property sector.  Consequently, many large organisations are reducing, or
attempting to reduce, their investment in property primarily to achieve higher
returns on capital.  Notable examples include banks, oil companies and
Government departments, often using PFI or other property partnership
techniques.    For example Trillium has recently bought the 700 property
department of the Social Security Estate and is the preferred bidder for most
of the Inland Revenue Estate.

However, widespread current disillusionment with property and the property
sector is no indication that such a view will continue to be correct.  Indeed,
it is not many months since the financial sector embraced fully the 'dotcom'
world and all measure of specious technology stocks, only to see their value
collapse.    I said last year that the recent dramatic gains on the Gilt and
equity markets over the previous few years were unlikely to be repeated and
this is proving correct.  Over the past 12 months Gilts have returned about 8%
but equities have returned about -2% compared to 11% for property.

The very substantial gains from Gilts over the last few years have been
achieved as a result of the spectacular reduction in inflation and in nominal
interest rates, which was a one-off event.  However, in the future, with an
inflation rate of say 2.5%, long-term Gilts are unlikely to exceed 5%.  In the
UK equities have outperformed bonds by a long-term average of 4.6%, the '
equity risk premium.'  Over the last 10 years this premium has fallen and is
now 2% less than half the long-term average, and this fall in yield is a major
component of the recent rise in equity prices.  Unless the premium falls
further, which is extremely unlikely in the long term, given the inherent risk
in equities, then total equity returns are unlikely to exceed 7% or 8% over
the long term.  As prospective returns from both Gilts and equities will
continue to be lower than have been experienced over the last few years, the
relative attraction of property may improve.

In the 12 months to August 2000 Hillier Parker report that rents have risen
over 10% with the largest increases being retail warehouses (20.4%) and
offices (13.6%) whereas industrials and retail shops had lower increases of
6.9% and 5.6% respectively.  In the office sector, the largest increases,
nearly 25%, have been in the mid town and fringe London areas where real rents
are amongst the lowest compared to the peak in 1990 - a catch up. In the three
months to August annualised retail rental growth rates fell to 1.2% for shops
and 13.2% for  retail warehouses but offices rose to 19.2% with all areas in
central London rising even more quickly.   Scotland's office rentals rose at
an annualised rate of 18.8%.  Richard Ellis expect rental growth to fall
slightly in 2001 and again in 2002 in line with slower economic growth.
Retail rents will continue to be affected by e-commerce which Verdict expect
will account for 3.3% of consumer spending in 2004, and The Henley Centre
expect this to increase to around 13% by 2009.   In consequence retail rentals
are expected to rise in 2003 and 2004 by 1% to 3% points less than otherwise.
Investors surveyed by the Estates Gazette expect rental growth of over 5%
for offices and business parks, but only 2% for retail shops.

Thus prospects for continued rental growth are reasonably encouraging,
although expected increases are below recent levels.  Overall property yields
will rise in 2001 and 2002 due to the rise in shop yields and overall returns,
which should be about 11% this year, are likely to drop to about 9% p.a. over
the next two years.  These returns are significantly higher than are likely
from Gilts and higher than sustainable long-term equity returns, and should
increase demand for property investments.

In Scotland differences between cities continue to be as marked as previously,
emphasised by the continuing and prospective strength of the Edinburgh market.
In Aberdeen the market remains depressed although Ryden report that take-up
in the six months to 30 September 2000 was over double the previous depressed
six months and exceeded any figure over the last 20 years.   Supply, however,
continues at a level just below the all-time peak in March 2000.   The
increased take-up has been due to a few large transactions exceeding 10,000 ft
(2) as the take-up of smaller areas was lower in the period to 1 September
2000 than previously.   Thus apart from larger or 'head office' type buildings
the demand for office property continues at a low level.

Brent crude oil prices have remained high this year and are forecast to
average $26 per barrel in 2000 and at least $20 per barrel in 2001 and the
increase in price is generating greatly increased investment.   For example
BP Amoco recently announced a $4 billion programme of investments in the North
Sea over the next four years including £500m to assist the consolidation of
the oil activity in the newer province west of Shetland.   Increased
investment will lead to an expansion of operations, employment and profits
into the Aberdeen economy leading in turn to an increased demand for property.
Demand for property as evidenced by rental growth lags GDP growth in the
economy by 9 months.  Due to the capital intensive nature of the oil industry
and its long lead times I estimate that the full effect of the current upturn
will occur up to 2-3 years from the recovery of the average oil price to $20
in the third quarter of 1999.

In Edinburgh office take-up in the 6 months to September 2000 was 567,109 ft
(2), 25% up on the previous six months but 10% less than in the same period
last year.   Current supply, of which only 87,000 ft(2) is immediately
available high-quality open-plan space in the city centre, is only 818,763 ft
(2), almost 10% less than the same time last year and historically very low in
relation to take-up.

Office take up has now averaged over 1m ft(2) a year for the last 31/2 years,
an increase of 42% on Edinburgh's average uptake.  Whereas last year I
reported that there had been relatively modest growth in office rents in most
sectors of the city, the prediction then of larger future rises is being
realised.  The smallest rental increase has been for the traditional new town
property where the best quality town houses are achieving about £1 more than
last year, or £16.50 - £17.50 per ft(2), although vacant possession prices
have risen sharply.  Ryden report that 'it is fair to state that prime
Edinburgh office rentals have now reached £30/ft(2)' as opposed to the £22 - £
24 I reported for the last two years.  At Edinburgh Park rents are now quoted
at £25, approximately £5 higher than I reported last year, and refurbished
central buildings at £23 are also considerably higher.  These high rents in
the city centre and in Edinburgh Park, and the reported shortage of space, has
had a ripple effect on outlying areas where rents are also increasing.

A recent report by the Economic Development Committee of the City of Edinburgh
estimated that over the next 15 years sufficient additional jobs would be
created in the office sector to require another 5 million ft(2) of office
space, equivalent to a combined Exchange District and Edinburgh Park.
Further expansion is expected in the Scottish Banks, insurance and pension
business, in fund management and in professional firms, notably legal
services.  Additionally some smaller businesses are likely to transfer from
traditional offices to open plan space.

Until relatively recently Edinburgh had attracted relatively few incoming
businesses, but recently several large organisations have located in
Edinburgh.  Factors that influenced these decisions will include price and
quality of accommodation, availability of trained staff and new graduates,
quality of life, communications, proximity of compatible businesses and
probably a 'band wagon' effect.  Most of these factors still favour location
in Edinburgh.  Rents have risen recently, especially centrally and in
Edinburgh Park, but levels are still well below London and other financial
centres and less expensive space is available near the city centre or in
peripheral areas.

Unemployment levels appear low but each year large numbers of graduates enter
the workforce from the three universities and many other colleges in the area,
and increasing numbers of staff commute, including from more distant
locations.   The scale and variety of the service sector in Edinburgh,
particularly the financial service sector, is such that some commentators
suggest that it has now reached a 'critical mass' and is probably at a size
where specialist institutions can now achieve external economies.

Thus demand for Edinburgh office space seems likely to continue to grow.
Indeed, Ryden report that their current research indicates 34 unsatisfied
Edinburgh requirements for units of 10,000ft(2) or above, amounting to
1.3million ft(2).   The extension of the office sector reinforces and
complements the 'capital' and 'Parliament' effect,  and will lead to a further
expansion of the leisure, tourist and entertainment industries which will grow
and reinforce the attractiveness of Edinburgh, particularly for talented
staff, as an exciting and vibrant community in which to live and to work.
Truly, a transformation is taking place in Edinburgh from a small, self
contained, inward looking, professional community to a metropolitan,
internationally dependent, outward looking commercial society with great
opportunities for personal and career development, a condition that is often
self reinforcing.  The prospects for Edinburgh appear excellent.


Future Progress

The Group seems likely to continue to trade profitably and to produce a cash
surplus after interest and operating costs, although the effect of the
refurbishment and repair costs, the vacancies during refurbishment and the
rent-free periods at St Magnus House will affect the current year
unfavourably. The outcome for the current financial year will again depend
primarily on the extent of any net change in the valuation of the investment
portfolio, although in subsequent years this will be increasingly influenced
by the development opportunities that we have created or are becoming
available.

We have started our small residential development in Eskbank and during next
year we expect to commence development of our 21,000ft(2) office development
in Belford Road, Edinburgh.    We are planning the future development of
Baylis Road, Waterloo and St Margaret's House, Edinburgh and a possible
non-industrial use for our 15 acre Stoneywood site.

We also continue to search for corporate opportunities, which until recently
have been made difficult by the low share price and the outside perceptions of
the company, which we believe will change to reflect the recent success of,
and prospects for the Group.  The Board possesses many of the necessary
professional skills for take-overs and have had considerable experience of
these, allowing us to undertake corporate activity at a relatively low cost.

The mid market share price is currently 51.0p, only a slight improvement to
the 48.5p price in December 1999 and a discount of  45% to the NAV 92.3p
reported in the interims.  Growth in NAV is the Group's principal target as
growth enhances shareholder value, not only by increasing NAV but by reducing
the discount.  A higher price together with prospects of growth should
facilitate purchases funded by share issues.

Over the year we have purchased a small number of shares for cancellation and
we intend to continue this policy more actively in the coming year.  The Board
recommend the payment of 0.5p final dividend, the first to be paid since 1986.
We intend to consider increasing the dividend at a sustainable pace
consistent with consideration for other investment opportunities and prudent
cash management.

At the beginning of this year we had agreed tax losses of £2.8m, of which £
1.1m related to development and trading and about £1m of capital allowances
available within two years.  These losses and allowances, which can be carried
forward, should allow us to enjoy a nil or low tax rate for at least another
two years.  In addition our investment portfolio continues to be subject to
indexation.


Conclusion

The UK economic growth is likely to be steady but I expect Edinburgh's economy
to grow more rapidly because of the expansion of the services sector and the
long term benefits of the 'capital' and 'Parliament' effects.  In Aberdeen the
recent rapid rise in oil prices, if sustained at or above $20 per barrel,
should provide considerable recovery there in the longer term.  In the 1990's
inflation rates and interest rates were falling and in consequence bonds and
equity markets enjoyed a huge one-off benefit.  Unless the economy is able to
sustain a higher growth rate without increased inflation, or the equity risk
premium is further reduced, returns from equities similar to those of the
1990's seem unlikely.  In these circumstances the current returns from
property, which overall is still recovering from a long bear market, appear
attractive.

For many years the Group has been in a straightjacket, being fully invested
and unable to raise additional funds at reasonable prices either for further
investment or for additional corporate activity.  Moreover, over a long period
of time our major investments could only have been realised at prices well
below that which could be expected at maturity or under more favourable market
conditions.  Now many of our investments are maturing, particularly those with
development prospects.  This together with our strong emphasis in the high
growth Edinburgh market and the recovering Aberdeen market render it likely
that further advances in NAV can be achieved, which in turn will unlock other
opportunities for expansion.



Consolidated profit and loss account
for the year ended 30 June 2000


                                                      2000         1999
                                                      (Audited)    (Audited)
                                                      £            £

Income - continuing operations
Rents and service charges                             3,346,150    3,340,811
Trading property sales                                1,790,799    -
Other trading sales                                   136,871      -
                                                      _______      _______


                                                      5,273,820    3,340,811
Operating costs
Property rental outgoings                             (847,343)    (93,284)
Cost of trading properties sold                       (1,405,183)  -
Cost of other sales                                   (134,197)    -
Administrative expenses                               (718,421)    (593,305)
                                                      _______      _______


                                                      (3,105,144)  (686,589)
                                                      _______      _______


Operating profit                                      2,168,676    2,654,222

Profit on disposal of investment property             126,346      205,000
Discount on redemption of 10% unsecured loan          -            17,170
stock
Interest receivable                                   56,347       42,991
Interest payable                                      (1,212,563)  (1,613,412)
                                                      _______      _______

Profit on ordinary activities before taxation         1,138,806    1,305,971

Taxation                                              -            -
                                                      _______      _______

Profit on ordinary activities after taxation          1,138,806    1,305,971

Dividends                                             61,147       -
                                                      _______      _______

Profit for the financial year                         1,077,659    1,305,971



Earnings per ordinary share                           9.27p        10.63p




Diluted earnings per ordinary share                   8.85p        9.73p




Profit for the financial year is retained as
follows:

In holding company                                    862,321      938,771

In subsidiaries                                       215,338      367,200
                                                      _______      _______

                                                      1,077,659    1,305,971



All activities of the group are ongoing. 
Statement of total recognised gains and losses
for the year ended 30 June 2000


                                                   2000          1999
                                                   (Audited)     (Audited)
                                                   £             £

Profit for the financial year                      1,138,806     1,305,971

Unrealised surplus/(deficit) on revaluation of     4,192,202     (513,700)
properties
                                                   _______       _______

Total gains and losses recognised since the last   5,331,008     792,271
annual report



Note of historical cost profits and losses
for the year ended 30 June 2000


                                                      2000         1999
                                                      (Audited)    (Audited)
                                                      £            £

Reported profit on ordinary activities before         1,138,806    1,305,971
taxation

Realised (deficit)/surplus on previously revalued     (99,843)     860,698
property
                                                      ______       ______

Historical cost profit on ordinary activities before  1,038,963    2,166,669
taxation


Historical cost profit for the year retained after
taxation and minority interests                       1,038,963    2,166,669




Consolidated balance sheet
at 30 June2000

                                             2000        1999
                                        (Audited)    (Audited)
                             £         £               £        £
Fixed assets
Tangible assets:
Investment properties                  30,626,397               27,159,487
Other assets                           192,777                  202,361
                                       __________               __________

                                       30,819,174               27,361,848
Investments                            34,360                   20
                                       __________               __________

                                       30,853,534               27,361,868
Current assets
Stock and work in            -                         985,000
progress
Debtors                      907,960                   69,132
Cash at bank and in          2,037,563                 453,448
hand
                             _________                 _________

                             2,945,523                 1,507,580
Creditors: amounts
falling due within one year(10,368,681)                (6,233,063)
  

                             _________                 _________
Net current                            (7,423,158)              (4,725,483)
liabilities
                                       __________               __________

                                       23,430,376               22,636,385

Creditors: amounts
falling due after more than one year  (7,178,720)              (11,625,319)
  

                                       __________               __________

Net assets                             16,251,656               11,011,066



Capital and reserves
Called up share                        2,445,899                2,457,899
capital
Share premium account                  2,530,753                2,530,753
Capital redemption                     12,000                   -
reserve
Revaluation reserve                    6,566,114                2,274,068
Profit and loss                        4,696,890                3,748,346
account
                                       _________                _________

Shareholders' funds -                  16,251,656               11,011,066
equity




Consolidated cash flow statement
for the year ended 30 June 2000

                                                 2000           1999
                                             (Audited)            (Audited)
                                             £                    £
Net cash inflow from operating               4,380,831            2,787,864
activities
Returns on investments and servicing         (1,166,704)          (1,656,068)
of finance
Corporation tax                                       -                    -
Capital expenditure and financial               868,882            1,534,712
investment
                                             __________           __________

Cash inflow before management of
liquid resources and financing
                                              4,083,009            2,666,508

Financing                                    (1,763,420)          (3,019,264)
                                             __________           __________
Increase/(decrease) in cash in               2,319,589            (352,756)
period



Reconciliation of net cash flow to
movement in net debt

                                     £                     £
Increase/(decrease) in cash in the   2,319,589               (352,756)
period

Cash outflow from decrease in debt                         3,019,264
                                     1,734,149
                                     _________               __________
Change in net debt resulting from            4,053,738            2,666,508
cash flows

Discount on redemption of loan stock         -                    17,170
                                             __ _ ______          __ _ ______

Movement in net debt in the period           4,053,738            2,683,678
Net debt at the start of the period          (16,627,021)         (19,310,699)
                                             ___   ______         ___   ______
Net debt at the end of the period            (12,573,283)         (16,627,021)



These financial statements were approved by the Board of Directors on 18
December 2000 and were signed on its behalf by:



ID Lowe

Director



Notes:



1.   The above financial information represents an extract taken from the 
     audited accounts for the year to 30 June 1999 and does not contain the
     full accounts within the meaning of Section 240 of the Companies Act 1985  
     (as amended).  The full accounts for the year ended 30 June 1999 were 
     reported on by the auditors and received an unqualified report and 
     contained no statement under section 237 (2) or (3) of the Companies Act 
     1985 (as amended).  Full accounts will be delivered to the Registrar of 
     Companies.

2.   All activities of the group are ongoing.  The Board recommends the payment 
     of a 0.5p per share final dividend (1999: no dividend declared), which will

     be payable, subject to shareholders approval, on 22 January 2001 to all
     shareholders on the register on 3 January 2001.

3.   Earnings per ordinary share

     The calculation of earnings per ordinary share is based on the reported 
     profit of £1,138,806 (1999:  £1,305,971) and on the weighted average number

     of ordinary shares in issue in the year, as detailed below. The calculation

     of diluted earnings per ordinary share is calculated adjusting the profit 
     for the period in respect of interest on loan stock deemed to have been 
     converted. The weighted average number of shares has been adjusted for 
     deemed conversion of loan stock and deemed exercise of share options
     outstanding.


                                                              2000         1999
Weighted average no. of ordinary shares in issue during 12,279,076   12,289,493
year - undiluted
Weighted average of ordinary shares in issue during     14,850,694   15,307,464
year- fully diluted



4.   Copies of the Annual Report and Accounts are being posted to shareholders  
     on 22 December 2000 and will be available free of charge for fourteen days 
     from the Company's head office.


END