Final Results

RNS Number : 0996R

Capital & Regional plc

24 April 2009

CAPITAL & REGIONAL PLC ANNUAL RESULTS 2008

Capital & Regional Plc, the co-investing property asset manager today announces its audited annual results for the year ended 30 December 2008.

Financial Highlights

	2006	2007	2008
Property under management	£6.5bn	£6.1bn	£4.0bn
Net Assets	£913m	£703m	£186m
Triple net diluted NAV per share	£12.72	£10.04	£2.67
Recurring pre-tax profit	£32.3m	£32.7m	£27.6m
Dividend per share	26p	27p	5p
IFRS profit/(loss) after tax	£222m	£(167m)	£(502)m

Highlights

Falling property values have had a significant impact on Triple Net Asset Value per share which at £2.67 is 73 per cent lower than at the end of 2007.
Resilient operating performance underpinned by recurring pre-tax profits of £27.6 million (£32.7 million in 2007).
Financial position improved through transactions totalling £800 million at Group and Fund level during the year. Statutory debt reduced from £625 million to £113 million at 30 December 2008.
Flexibility increased through the renegotiation of financial covenants with our principal Group lending bank; discussions on further amendment to core banking covenants well progressed.
The Mall's financial position substantially strengthened as a result of the £286 million sale of three shopping centres to Carlyle and the £286 million rights issue.
Establishment of joint venture with AREA Property Partners for the Group's German business.
Announcement on 8 April 2009 by X-Leisure Fund of disposal of O2 Centre, Finchley Road for £92.5 million, LTV waiver agreement to the end of May and plans to strengthen the Fund's financial position through an equity issue and changes to its banking covenants.
Announcement on 20 April 2009 by the Junction Fund of its intentions to raise £65 million in new equity in conjunction with the agreed renegotiation of banking covenants
Agreement to sell the Group's 50% equity interest in Cardiff Retail Park to our partner, PMG Estates for £1.2 million at a NIY of approximately 5.9 per cent on contracted rent.
Action taken to deliver cost savings of £3 million per annum in 2009 which will help offset the impact on recurring pre-tax profits of disposals, dilution and lower valuations
At 30 December 2008 we were in compliance with all our key banking covenants at Group and core fund level.

Commenting on the results Tom Chandos, Chairman said

"In a year of extreme financial and economic turbulence, Capital & Regional's performance in 2008 has been severely affected by the related fall in property valuations.

Throughout 2008, however, initiatives have been taken by management, under its new leadership, which have enabled the Company to keep its head above the rising floodwater; and, although this task is not yet complete while further transactions progress towards completion, the further action being taken promises to restore the Group's financial resilience.

In the light of the continuing uncertainty in the property market and the consequent desirability of the Group conserving its cash resources, the Board is not recommending the payment of a final dividend, leaving the total for the year at the 5p paid at the interim stage.

The Board is determined that, in the foreseeable future, shareholders should enjoy an improvement in returns, after a period of very poor performance. It continues, therefore, to review and explore a wide range of options, in addition to the transactions currently being pursued, which could accelerate the achievement of this objective."

Commenting on the results Hugh Scott-Barrett, Chief Executive said

"The last 12 months have seen some of the most difficult conditions for the property market in many years. Falling property values have had a very significant impact on the Group's performance in 2008. We have reported a pre-tax loss of £516 million, a result which I know is deeply disappointing not only for shareholders but also for all who work at Capital & Regional.

Execution is key. A number of transactions both at the Fund and Group level have yet to close. Although I believe we are well on the way to a successful outcome, uncertainty remains until completion. These risks are covered more fully in the Risks and Uncertainties section. We will therefore continue to focus on de-leveraging the Group balance sheet, to identify opportunities to recycle capital and to make selective investment where returns are compelling."

I strongly believe that our operating platform has unique characteristics which can be leveraged more effectively in the future. In particular, our specialist expertise and management skills in the retail and leisure sectors will give us clear advantages in this challenging market environment."

Financial information

The financial information set out below does not constitute the Group and Company's statutory accounts for the years ended 30 December 2008 or 2007, but is derived from those accounts.

Statutory accounts for 2008 will be delivered following the Company's annual general meeting. The auditors have reported on the 2008 accounts and their report was unqualified but modified to include an emphasis of matter paragraph on the uncertainty which may cast significant doubt on the Group and Company's ability to continue as a going concern as described in note 1. The audit report did not contain statements under section 237(2) or (3) of the Companies Act 1985.

A copy of the statutory accounts for the year ended 31 December 2007 has been delivered to the Registrar of Companies. The auditors' report on these accounts was not qualified, did not contain a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report and did not contain statements under section 237(2) or (3) of the Companies Act 1985.

Forward looking statements

This document contains certain statements that are neither reported financial results nor other historical information. These statements are forward-looking in nature and are subject to risks and uncertainties. Actual future results may differ materially from those expressed in or implied by these statements. Many of these risks and uncertainties relate to factors that are beyond the Group's ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behaviour of other market participants, the actions of government regulators and other risk factors such as the Group's ability to continue to obtain financing to meet its liquidity needs, changes in the political, social and regulatory framework in which the Company operates or in economic or technological trends or conditions, including inflation and consumer confidence, on a global, regional or national basis. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this document. The Group does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this document. Information contained in this document relating to the Group should not be relied upon as a guide to future performance.

Chairman's statement

Overview

In a year of extreme financial and economic turbulence, Capital & Regional's performance in 2008 has been severely affected by the related fall in property valuations. Nonetheless, however difficult market conditions have been and however widespread their impact on property investors, your Board regards the pre-tax loss of £516 million and the resulting 73% fall in triple net diluted net assets per share as a deeply unsatisfactory outcome.

Dividend

The Board

Hans Mautner has asked to retire from the Board following this year's Annual General Meeting, when he will have completed two three year terms. His knowledge of the worldwide property industry and his strong judgement have made him a highly valued Board member and we are very grateful for his significant contribution.

Responsible Business

Capital & Regional has continued to manage Responsible Business in the same way as it does other operating areas, by allowing operating divisions autonomy to develop an approach suitable for them, whilst providing broad strategic direction through a Responsible Business Committee. The statement on Responsible Business sets out the Group's achievements in 2008.

Our People

Our teams have worked tirelessly throughout the year, despite the severe headwinds the Group has encountered. The restructuring and refinancings undertaken or in train would not be possible without the recognised excellence of their core property asset management skills. I would like to thank them on your behalf for their efforts.

Outlook

Despite some improvement in sentiment around the property market in recent weeks, valuations have been generally declining in the first quarter albeit at a slower rate than at the end of 2008 and rental income is inevitably being affected to some extent by the economic conditions. In this environment it is therefore important for the Company to finalise the transactions currently in an advanced stage of negotiation.

The Company enjoys partnerships, some long established, others more recent, with a number of powerful financial institutions; and these have proved vital in securing both a more stable immediate position for the funds and joint ventures and the prospects of renewed success in the future.

Tom Chandos

Chairman

Chief Executive's statement

Results

The last 12 months have seen some of the most difficult conditions for the property market in many years. Falling property values have had a very significant impact on the Group's performance in 2008. We have reported a pre-tax loss of £516 million, a result which I know is deeply disappointing not only for shareholders but also for all who work at Capital & Regional.

Recurring profitability, which measures the underlying tenant-facing business, has been more resilient. We have reported recurring pre-tax profits of £27.6 million compared to £32.7 million in 2007, reflecting sound underlying operating performance. Our core skills are as a property asset manager of complex retail and leisure assets. These strengths have again proven themselves in challenging market conditions. As at 30 December 2008, we continue to manage a portfolio of just under £4 billion. Whilst the market environment remains uncertain, this franchise provides a solid platform to grow the business as market conditions stabilise.

Property values have fallen significantly further and faster than anticipated at the end of 2007, reflecting a lack of liquidity in investment markets. Valuations at a property level for each of the Mall, The Junction and X-Leisure funds have collectively fallen by over £1.5 billion during 2008 and the falls in unit prices have been proportionally still greater given the gearing levels in the funds. It is this combination that has led to a fall in Capital & Regional's NAV from £10.04 to £2.67 per share over the year.

Financial position

Against this background, management's focus has been on strengthening the financial position of the Group and each of the funds. We have made solid progress towards achieving this critical objective during the year:

Statutory debt (which has some recourse to the Group balance sheet) has fallen from £625 million at 30 December 2007 to £113 million as at 30 December 2008. This was largely achieved by the sales of 80% of the FIX UK portfolio and 50% of the German portfolio.
The Mall's financial position has been substantially strengthened as a result of the £286 million sale of three shopping centres to Carlyle and the £286 million rights issue.
We renegotiated our financial covenants with our principal lending bank to provide us with greater covenant headroom within our facilities.
Actions have been taken to deliver cost savings of £3 million per annum in 2009 which will help offset the impact on recurring pre-tax profits of disposals, dilution and lower valuations

These actions have ensured that as at 30 December 2008 we were in compliance with all our key banking covenants at Group and core fund level. Since the year end, we have continued to progress plans to strengthen the financial position of both The Junction and X-Leisure funds. X-Leisure has completed the sale of the O2 Centre, Finchley Road, for £92.5 million. Both X-Leisure and The Junction have also announced plans to raise new equity in transactions which, once approved, will also benefit from revised banking arrangements to ensure both funds have the necessary financial resilience.

In view of the wish to maintain financial flexibility, we are also in negotiations with our principal lending bank on further amendments to the Group's core revolving credit facility.

Operations

We believe that current market conditions will have a long lasting impact on the relationship between landlord and retailer which will inevitably have an impact on the structure of leases in the medium term. The direct management approach adopted by Capital & Regional's Property Asset Management teams is geared to being responsive to retailer needs which will be critical in attracting new retailers to the attractive and competitively priced space we offer.

Outlook

Market conditions remain fragile. It is therefore important that the Group is resilient enough to absorb further falls in property values in 2009. The actions which are under way to strengthen the financial position of The Junction, X-Leisure and the Group are indicative of our determination to ensure Capital & Regional is not only well positioned against further market weakness but can also begin to take advantage of opportunities as market conditions improve. I strongly believe that our operating platform has unique characteristics which can be leveraged more effectively in the future. In particular, our specialist expertise and management skills in the retail and leisure sectors will give us clear advantages in this challenging market environment.

I am realistic about the need for the Group to consider a wide range of financial and strategic options both to strengthen the Group's financial position and to begin the task of rebuilding shareholder value. We will therefore continue to focus on de-leveraging the Group balance sheet, to identify opportunities to recycle capital and to make selective investment where returns are compelling.

Hugh Scott-Barrett

Chief Executive

Operating review

Tenant markets

Despite well-publicised problems in the wider economy and a number of high-profile failures and administrations, our tenant-facing business has continued to deliver a satisfactory performance, though in the light of the continuing downturn, we closely monitor the financial position of our tenants. During the year, the part of the leisure sector in which we operate was hit less hard than the retail sector, with cinemas and restaurants at the value end of the spectrum continuing to trade reasonably well, and this appears to have remained the case in the first quarter of 2009. We therefore believe that the Group has the right mix of properties and management skills to work with our tenants through the recession.

The Group benefited from the diversification that its German joint venture brings, by providing exposure to a tenant market with a different cycle to the UK that has continued to perform strongly over the year.

The operating performance of our tenant markets has therefore shown resilience in the face of the economic downturn during 2008. The key aspects of this performance were as follows:

Occupancy levels

We continue to see satisfactory levels of occupancy across the three funds, notwithstanding the increased pressure that tenants are facing. Where possible we aim to work with tenants who are facing difficulties so they are able to continue trading. Across the three main UK funds, occupancy was 94.6% at the year end compared to 94.8% at the end of 2007. In the German joint venture, occupancy remained high at 98.2% at the year end compared to 98.7% at the end of 2007. Our German portfolio is defensive in nature with a tenant base comprising a majority of food retailers in established retail locations.

Passing rent

Rental growth is a key measure of demand for space and therefore an important driver of performance. Notwithstanding the pressures from the wider economy, passing rent fell by only 0.4% on a weighted average like-for-like basis in the three funds during 2008. This fall was driven largely by weakness in the retail market, as The Mall and The Junction saw passing rent falling by 1.7% and 0.5% respectively, in contrast to X-Leisure where a combination of stronger underlying tenant performance and a greater proportion of index-linked leases led to a 4.6% increase in passing rent over the course of the year. In Germany, where index-linked rents are common, passing rent increased by 0.6% in 2008.

Administrations

Administrations are one of the most important indicators by which the Group gauges the state of its tenants, and management of the administration process can be a driver of relative outperformance. During 2008, there were a number of significant tenant administrations, particularly in the last quarter of the year following the rapid decline in sentiment in the economy.

The Mall saw administrations in 114 units during the year, with passing rent of £11.0 million. This represented 7.2% of the rent roll at the start of 2008. Of this, 39 units with passing rent of £4.5 million entered administration in the last quarter of the year. A further 73 units went into administration in the first quarter of 2009, with passing rent of £5.0 million. 37 of these were still trading at the end of the quarter with passing rent of £2.9 million.
The Junction saw administrations in only four units during the year, but because these were predominantly large tenants this represented passing rent of £1.8 million or 3.8% of the rent roll at the start of 2008. Three of the units with passing rent of £1.7 million went into administration in the last quarter of the year. A further five units went into administration in the first quarter of 2009, with passing rent of £1.5 million. None of these were still trading at the end of the quarter.
X-Leisure saw administrations in 22 units during the year, with passing rent of £1.7 million or 3.5% of the rent roll at the start of 2008. The last quarter of the year accounted for 11 of these units, with passing rent of £0.9 million. A further five units went into administration in the first quarter of 2009, with passing rent of £0.4 million. One of these was still trading at the end of the quarter with passing rent of £0.1 million.
There were minimal administrations in the German portfolio in the year and in the first quarter of 2009.

Administrations are not necessarily an indication of tenant failure as many occupiers are able to continue trading through the process, but where units do close our ability to find replacement tenants quickly is a key driver of performance. As a result of the increased level of administrations in the last quarter of the year, 35% (by value of passing rent) of the 2008 administrations were either still trading or had been replaced by new lettings by the end of the first quarter of 2009.

Monthly rent payments

In Germany, monthly rent payments are standard but in the UK leases generally provide for quarterly payments. Requests to move to monthly rent payments are therefore an indicator of increasing tenant distress as occupiers seek to manage cashflow in challenging economic times. The Group considers such requests on a case-by-case basis. At the year end, 5.2% of passing rent was paid monthly under non-contractual concessions across the three funds, compared to 1.1% at the end of 2007. Contractual concessions (i.e. monthly payment plans as a term of the lease) are also increasingly common with 6.7% of passing rent now paid in this way, the majority of which relates to The Junction.

New lettings and rent reviews

Both The Mall and X-Leisure continue to make new lettings and settle many rent reviews above ERV, in contrast to The Junction where the difficulties in the retail warehouse market have led to settlements on average 3% to 3.5% under ERV. Across the three funds, 180 rent reviews were settled in the year at passing rent of £24.3m at 1.3% above ERV, and 255 new lettings were made at passing rent of £9.9m which was 0.9% above ERV. This excludes any temporary lettings in the funds. The Group's ability to attract new tenants and settle rent reviews above ERV in the period was encouraging.

Outlook

As indicated, since the year end, there have been a number of further administrations, particularly in The Mall and The Junction at the start of the quarter, and it is expected that tenants in these funds will continue to face a difficult trading environment for some time. We nevertheless believe that in these challenging conditions our asset and property management skills will stand us in good stead to generate relative outperformance. Our exposure to the leisure sector and the German market also helped to offset the problems faced by retailers during 2008, and this trend has continued in the first quarter of 2009.

The level of incentives that are required to attract new tenants is likely to increase as their bargaining position is improved. Nevertheless, with a good proportion of retail administrations and insolvencies continuing to trade, and the vast majority of tenants continuing to meet their obligations, we believe that the Group is well-placed to withstand the full impact of the recession that will undoubtedly continue to be felt throughout 2009.

Property investment markets

Significant yield shift was the key driver of property investment markets in 2008, affecting the Group's investments in the UK, and to a lesser extent, Germany. The availability of debt funding deteriorated through 2008 and essentially dried up at the start of the global financial crisis triggered by the collapse of Lehmans. Even where debt funding can be raised, this is only on margin terms which are markedly more costly than was previously available.

As a result, the yields on the Group's main investments moved outwards over the course of the year as follows:

Yield shift
			Yield shift
	2008	2007 1	in year
Initial yields
Mall	7.15%	4.81%	2.34%
Junction	6.20%	4.44%	1.76%
X-Leisure	6.68%	5.06%	1.62%
UK weighted average	6.74%	4.76%	1.98%
German joint venture	6.51%	5.99%	0.52%

Nominal equivalent yields2
Mall	8.44%	5.71%	2.73%
Junction	7.12%	5.39%	1.73%
X-Leisure	7.68%	5.78%	1.90%
UK weighted average	7.84%	5.64%	2.20%

1 adjusted to be like-for-like with 2008

2 nominal equivalent yields in Germany are equal to initial yields

These rising yields, magnified by gearing at the fund and German joint venture level, have resulted in significant negative performance in these investments in 2008.

Fund and German joint venture performance
	2005	2006	2007	2008
Mall
Property level returns	16.5%	17.6%	(3.3)%	(33.2)%
Geared returns	22.8%	26.3%	(13.2)%	(65.4)%
IPD shopping centre index	16.3%	12.7%	(4.3)%	(22.0)%

Junction
Property level returns	23.3%	15.0%	(16.8)%	(26.1)%
Geared returns	34.1%	18.3%	(34.0)%	(57.1)%
IPD retail parks index	22.1%	14.7%	(9.6)%	(25.6)%

X-Leisure
Property level returns	15.3%	19.7%	2.1%	(21.9)%
Geared returns	28.3%	30.4%	(3.0)%	(48.2)%

UK weighted average 1
Property level returns	18.9%	16.9%	(6.1)%	(28.2)%
Geared returns	27.3%	23.9%	(17.3)%	(58.5)%

German joint venture
Property level returns		15.2%	7.5%	(5.2)%
Geared returns		34.2%	16.2%	(32.4)%

1 based on Group exposure to the three funds

The Mall's underperformance against its benchmark was largely attributable to the prime centres included in IPD, where yield shift has been less pronounced. In 2007 the differential between prime and secondary stock was minimal but has widened considerably since, and this has had a negative impact on the relative performance of the mainly secondary centres held in the fund.

The Junction was much closer to its benchmark for the year following its underperformance in 2007. This year, the amount of yield shift was broadly in line with the wider market but the fund's estimates of falls in ERV have been more pessimistic than the market.

X-Leisure is not measured against a specific benchmark but has moved broadly in line with the IPD All Property return of (22.1)% for the year. It saw much lower falls in values than the other funds in 2007 and the first half of 2008 but declined significantly in the second half of the year.

Whilst the German portfolio has seen a smaller fall in value than the Group's other portfolios at a property level, the impact of the higher levels of debt in the portfolio on geared returns has been more dramatic. The German property market has historically been less volatile than the UK market and the returns for the German joint venture highlight the benefits of diversification for the Group.

Outlook

We have already seen further falls in value in 2009 due to further outward yield shift but also brought about by the impact of tenant failures and weaker occupational demand. Note 36 to the financial statements sets out the valuations of the properties in the three funds at 31 March 2009. This has been exacerbated by the continued stagnation of the debt markets. Given the experience to date, it is difficult to predict how far the market will fall but one of the key requirements for the stabilisation of values is an improvement in the availability of debt funding and the cost of borrowing.

Financial review

KPI summary

The key performance indicators the Group uses to monitor performance are summarised in the table below and explained in more detail in the following paragraphs.

Key performance indicators
	2006	2007	2008
Scale of business
Property under management	£6.5bn	£6.1bn	£4.0bn

Investment returns
Triple net diluted NAV per share	£12.72	£10.04	£2.67
Total return on equity	32%	(18)%	(72)%
Year end share price	£15.42	£3.92	£0.45
Total shareholder return	81%	(73)%	(77)%

Profitability
Recurring pre-tax profit	£32.3m	£32.7m	£27.6m
Dividend per share	26p	27p	5p
Profit/(loss) before tax	£251m	£(167)m	£(516)m

Debt
Group debt	£460m	£625m	£113m
Off-balance sheet debt	£678m	£709m	£723m
Total debt	£1,138m	£1,334m	£836m

Gearing
Group debt to equity ratio*	50%	89%	60%

* Group debt divided by shareholders' equity

Property under management

In line with the Group's strategy of reducing debt, there were no property acquisitions but a number of disposals during 2008. There were also reduced levels of capital expenditure on the underlying assets. The key movements in property under management in the year were as follows:

				German
	Mall	Junction	X-Leisure	portfolio	FIX UK	Other	Total
2007	3,016	1,223	947	490	170	289	6,135
Disposals	(359)	(204)	-	-	(170)	(28)	(761)
Capital expenditure	23	3	18	1	-	33	78
Revaluation	(988)	(288)	(244)	(43)	-	(51)	(1,614)
Exchange difference	-	-	-	147	-	-	147
2008	1,692	734	721	595	-	243	3,985

The Mall disposed of three properties in Chester, Edgware and Epsom in July 2008 for £286 million at a net initial yield of 6.0%. The proceeds of these property disposals and the £286 million open offer were used in part to repay in full the fund's banking facility which left the fund with no effective LTV covenant. The balance was maintained to cover committed future capital expenditure, mainly at Luton and Blackburn. The fund spent £23 million during the year on reconfigurations and redevelopments.
The Junction made three disposals during the year: Great Western Retail Park, Glasgow in March 2008 for £58.5 million at a net initial yield of 5.75%; Templars Retail Park, Oxford in August 2008 for £57 million at a net initial yield of 5.7%; and St George's Retail Park, Leicester in November 2008 for £32 million at a net initial yield of 8.2%. Since the year end it has also sold its non-core property at Victory Industrial Estate, Portsmouth for £1.65 million at a net initial yield of 9.3%. The proceeds in each case were used to reduce debt in the fund.
X-Leisure had no disposals in 2008, although in April 2009 the sale of the O2 Centre, Finchley Road completed for £92.5 million at a net initial yield of 7.8%. The proceeds were used to reduce the fund's debt.
There were no acquisitions or disposals in the German portfolio during the year. Although the Group sold 50% of its German interests to AREA in October 2008, the whole portfolio is still included in property under management as our German team continue to manage the portfolio.
The Group disposed of 80% of its FIX UK portfolio in March 2008 for £32.2 million at a net initial yield of 5.8%. The properties are no longer managed by the Group and are therefore no longer included in property under management.
The Group's joint venture in Cardiff disposed of the Costco Unit at the Capital Retail Park in December 2008 for £17 million at a net initial yield of 6.1%. The proceeds were used to pay down debt in the joint venture. In April 2009, the Group agreed to sell its remaining interest in the joint venture to its partner for £1.2 million at an estimated contracted net initial yield of 5.9%. This continues our strategy of de-gearing the Group and releases us from future capital commitments of approximately £2 million and a small bank guarantee.

Investment returns

All measures of investment returns saw a significant fall in 2008, reflecting the overall loss for the year which was broken down as follows:

	2006	2007	2008
	£m	£m	£m

Recurring pre-tax profit	32.3	32.7	27.6
Revaluation of investment and trading properties	166.7	(164.4)	(397.4)
Performance fees	62.6	(52.8)	(9.9)
Gain/(loss) on disposal	11.1	1.6	(42.3)
Deemed disposal	-	-	(28.8)
Revaluation of financial instruments	23.5	(7.0)	(47.8)
Other non-recurring items	(45.3)	22.9	(17.7)
Tax and reserves movements	(27.0)	1.9	13.6

Total returns	223.9	(165.1)	(502.7)

As % of opening equity	31.6%	(18.1)%	(71.5)%

The main factors behind the significant loss in the year were:

revaluation losses and losses on disposals across the Group's portfolio, reflecting valuation movements in the overall property investment market in both the UK and Germany. As described in the Operating Review the key driver behind the movements during the year was yield shift, in particular the sharp falls seen in the last three months of the year.
a deemed disposal that represented the dilution caused by the Group's decision not to participate in the Mall's capital raising. This decision has been supported by the fact that the value of fund units has since fallen below the open offer unit price.
losses on the Group's interest rate swaps, which have been driven by the sharp falls in interest rates towards the end of the year. As a result, the floating rates receivable under the swaps are now lower than the fixed rates payable, creating a balance sheet liability for accounting purposes.

The other non-recurring items include the Group's share of performance fees repaid as an investor in the funds, impairments, one-off expenses and the costs of the Group's various management incentive schemes. These items are described in more detail in note 2 to the financial statements.

Profitability

The Group's recurring profit is derived from its two segments, being:

Asset businesses: comprising our share of the net rent less net interest arising from interests in associates, joint ventures and wholly-owned entities, in both the UK and Germany
Earnings businesses: property management fees less fixed management expenses, and the profit from its SNO!zone operating business

Recurring pre-tax profit
	2006	2007	2008
	£m	£m	£m

Property investment UK	11.3	10.2	6.1
Property investment Germany	5.8	9.6	11.1
Managing property funds	13.4	10.8	8.9
SNO!zone	1.8	2.1	1.5

Recurring pre-tax profit	32.3	32.7	27.6

Property investment: the Group earns profits from its share of the net rental income less net interest payable in its investments. The cost of managing its wholly-owned investment and trading properties is allocated to the property investment business.

The fall in UK profit is largely the result of lower net rental income from The Mall, following the sale of three properties in the year and dilution of the Group's share in the fund following the rights issue; significant loan renegotiation costs incurred by The Junction; and the part disposal of FIX UK.

The increase in profit from the German portfolio is the result of favourable foreign exchange movements, which more than offset the fall in income in the last quarter that resulted from the part disposal in October 2008.

Managing property funds: a subsidiary of the Group, Capital & Regional Property Management Limited ("CRPM") earns fees from managing the funds and joint ventures and employs all the Group's staff. This property management business continued to be profitable at an operational level in 2008 as follows:

CRPM income statement
	2006	2007	2008
	£m	£m	£m

Asset management fees	17.0	18.6	14.9
Service charge fees	4.6	4.4	4.9
Other fees	5.8	3.0	3.0
Fixed management expenses *	(14.0)	(15.2)	(13.9)
CRPM recurring profit	13.4	10.8	8.9

Performance fees	62.6	(52.8)	(9.9)
Variable overheads	(18.3)	7.9	0.1
Impairment of goodwill	-	-	(8.0)
Other non-recurring items	(2.1)	-	(5.6)

Profit/(loss) before tax	55.6	(34.1)	(14.5)

* excluding overhead allocated to property investment business

The decline in CRPM recurring profit over the year was primarily the result of falling fund valuations and, to a lesser extent, disposals in The Mall and The Junction which reduced the base on which asset management fees are calculated. This was partially offset by a fall in fixed management expenses, which reflects part of the benefit of an ongoing programme of cost reduction to ensure that CRPM's property management business will continue to generate profits for the Group despite the falls in property under management.

CRPM's income statement also reflects performance fees which, as discussed in more detail below, were a net repayment to the funds in 2008. We have also impaired the carrying value of the goodwill associated with the X-Leisure fund, reflecting the fact that falling valuations will reduce the income stream we expect to receive from the fund over the remainder of its life and uncertainty as to whether the fund's life will be extended in 2018. Amounts shown under "Other non-recurring items" include costs relating to The Mall rights issue, to which CRPM contributed as the property manager; the change of Chief Executive during the year; and redundancies under the cost reduction programme mentioned above.

CRPM income arises principally from management contracts on The Mall, The Junction and X-Leisure funds. During 2008, as part of the negotiations around the capital restructuring of the fund, the contract for The Mall was amended to include an expiry date of 31 December 2012 if not extended by a continuation vote in June 2011, in line with the requirement to refinance the fund's bonds in 2012. The expiry dates of the contract for The Junction is also currently subject to renegotiation as part of the restructuring described in note 36 to the financial statements.

In addition to the amended expiry dates and in light of the funds' recent underperformance, the fee basis on each of the funds is also subject to further negotiation. While any new calculation for The Mall is expected to generate income for CRPM at a similar rate to the old, fees for The Junction will be lower as described in note 36 to the financial statements. We have already looked to reduce costs in line with this anticipated fall.

SNO!zone is the UK's premier real snow indoor ski slope operating business, based at three sites in Group properties at Milton Keynes, Castleford and Braehead. With virtually no requirement for capital from the Group, it has been generating strong cash flows since its inception in 2001.

SNO!zone income statement
	2006	2007	2008
	£m	£m	£m

Income	9.3	14.3	14.9
Cost of sales and operating expenses	(7.6)	(11.5)	(13.1)

Cash profit	1.7	2.8	1.8
Tenant incentives	-	(0.7)	(0.3)

Accounting profit	1.7	2.1	1.5

Despite a challenging trading environment, SNO!zone revenue increased over the year, driven by a strong performance at Milton Keynes, but this was offset by higher costs at all three sites. The largest increases were in salaries and marketing, where spending was increased in order to maintain revenue, and rent, following the commencement of a turnover rent in Milton Keynes and a rent increase in Castleford.

Performance fees

CRPM has historically received performance fees from the funds it manages, based on complex formulae designed to deliver a share of any outperformance over a three-year period compared to a defined IPD benchmark (in the case of The Mall and The Junction) and an absolute 12% hurdle return. Fees can be positive or negative, but negative fees are capped at the amount received over the previous two years.

Over the five years to 30 December 2006, the Group earned £161 million in performance fees. In 2007, however, falling property valuations caused negative geared returns and resulted in significant clawback of prior years' performance fees. Provisions were made in 2007 for the return of all of the performance fees earned from The Mall and The Junction in 2006 and no fees were accrued for X-Leisure due to the likelihood of clawback. As a consequence, the only fees that could potentially be clawed back in 2008 were the X-Leisure fees earned in 2006.

The continued negative performance of the funds in 2008 has meant that the Group has earned no performance fees this year. The 2008 performance of the X-Leisure fund has resulted in the clawback of £9.9 million of the 2006 performance fees. No further amounts can be clawed back but given the continuing falls in property values and the impact this has on fund performance, we are not anticipating that any performance fees will be earned in 2009.

A new basis for calculating performance fees is also expected to be agreed as part of the fee negotiations on The Junction and X-Leisure funds discussed above. The basis for calculating The Mall's performance fee may also change when discussions take place regarding management fees later in 2009.

Balance sheet summaries

The Group presents its balance sheet in three ways:

the enterprise balance sheet shows everything the Group manages;
the "see-through" balance sheet shows the Group's economic exposure to the different property portfolios; and
the statutory balance sheet follows the accounting and statutory rules

Three balance sheets at 30 December 2008

	Enterprise	See through	Statutory
	£m	£m	£m

Fund properties
Mall	1,800	301	86
Junction	712	194	58
X-Leisure	720	140	39

Joint venture properties
Germany	595	297	40
Other joint ventures	143	60	(5)

Wholly-owned properties
Great Northern, Hemel Hempstead and others	99	99	99

Total property	4,069	1,091	317

Working capital etc	(115)	(69)	(18)
Debt	(2,947)	(836)	(113)

Net assets	1,007	186	186

C&R shareholders	186	186	186
Fund and other joint venture investors	821

Total equity	1,007	186	186

NAV per share is £2.67 on a triple net basis, down from £10.04 at December 2007. As noted above under the commentary on Investment Returns, the major causes of this were:

the adverse shift in valuation yields which led to losses on revaluation and on disposal of investment properties;
the one-off impact of the Mall rights issue and the dilution following the Group's decision not to participate; and
the fall in interest rates which led to a loss on revaluation of interest rate swaps

Debt

During the year, Group debt fell from £625 million to £113 million, largely as a result of the disposals of 80% of FIX UK and 50% of the German portfolio. The Group's share of the FIX UK and German joint venture debt is now included in the value of its associates and joint ventures and in both cases is non-recourse to Capital & Regional plc. As a result, despite the net repayment of debt within existing associates and joint ventures, off balance sheet debt has increased slightly in the year. A summary of the movements in Group debt and off balance sheet debt is as follows:

		Off balance
	Group debt	sheet debt	Total debt
	£m	£m	£m
As at 30 December 2007	625	709	1,334
Net repayments *	(18)	(197)	(215)
Part sale of FIX UK	(120)	24	(96)
Part sale of German portfolio	(374)	187	(187)
As at 30 December 2008	113	723	836

* including foreign exchange movements and impairments

In the case of the German joint venture the Group has agreed to provide a €5 million loan facility if required for working capital. This facility was undrawn at 30 December 2008.

The breakdown of Group debt at the end of the year was as follows:

Group debt
	Debt at	Average
	30 December	interest		Duration	Duration to
	2008	rate	Fixed	of fixing	loan expiry
	£m	%	%	(months)	(months)
Core revolving credit facility	27	6.45	238	24	25
Great Northern debt	67	6.39	104	21	21
Hemel Hempstead debt	11	6.27	100	8	8
10 LGP debt	8	7.14	-	n/a	10
	113	6.45	128	21	20

In August 2008, the Group reached agreement with its principal lending bank in relation to the covenants on its core revolving credit facility. In return for a reduction in the amount of the facility from £175.5 million to £125.5 million and an increase in interest margin from 0.9% to 1.4%, the bank amended the see through gearing covenant so that only debt with recourse to the Group is included. This removed all fund, German and other non-recourse debt from the calculation as no Group guarantees have been given in respect of these facilities. The new covenant is set at 200%

The central facility is supported by the Group's investments in The Mall, The Junction and X-Leisure funds and the cashflows arising from SNO!zone and CRPM. In addition to the amended gearing covenant described above, interest cover must be greater than 150% and asset cover greater than 2:1, meaning that the carrying value of our investments, based on the fund unit prices at certain dates, cannot fall below 200% of the amount drawn.

The facility was £27.4 million drawn at 30 December 2008. The status of the covenants at the end of the year was as follows:

	Covenant	Actual
Gearing	Less than 200%	38%
Interest cover	Greater than 150%	462%
Asset cover	Greater than 200%	738%

Because of the restrictions of the asset cover covenant, only £101 million of the facility was actually available at the end of the year.

In view of the wish to maintain financial flexibility, we are also in negotiations with our principal lending bank on further amendments to the Group's core revolving credit facility.

Off balance sheet debt

The breakdown of off balance sheet debt at the end of the year was as follows:

Off balance sheet debt
	Debt at	Average
	30 December	interest		Duration	Duration to
	2008	rate	Fixed	of fixing	loan expiry
	£m	%	%	(months)	(months)
Mall (16.7% share)	208	5.01	100	40	40
Junction (27.3% share)	138	5.92	100	37	27
X-Leisure (19.4%)	94	5.88	91	29	39
German joint venture (48.8% share)	228	4.68	100	32	32
Other JVs and associates (20%-50% share)*	55	6.37	63	29	37
	723	5.29	96	35	35

* excluding FIX UK where the Group has conservatively written down its investment to £nil.

The Mall's financial stability was improved by raising new equity in June 2008 and selling three shopping centres as described above. At 30 December 2007 the fund had debt of £1,698 million made up of £1,435 million in bonds and £263 million of bank debt. At 30 December 2008 that debt had been reduced leaving £1,246 million of bond financing. The proceeds of the rights issue were used to pay off the entire outstanding balance on the RBS facility, so removing the 60% LTV covenant. The remaining £23 million was retained to fund committed capital expenditure. The proceeds of the Carlyle sale were used to pay down £189 million of The Mall's bonds and the remainder has also been set aside to cover future capital expenditure.

The only remaining LTV restriction is in the partnership deed and only operates on an "incurrence basis". This means that no remedy was required once falling valuations caused the LTV limit to be exceeded at the end of the year, although no additional borrowing can take place until the LTV falls back below 60%. At 30 December the LTV was 66.1%.

The Mall bonds contain an interest cover covenant set at 130%. For the year ended 30 December 2008, interest cover was 195%.

The Junction continued to pay down debt with the proceeds of disposals. At 30 December 2007 the fund had debt of £649 million from one bank facility. At 30 December 2008, this had reduced to £506 million following the receipt of £148 million from the three property sales described above under "Property under management".

The fund also reached agreement with its banks in October 2008 to extend the LTV covenant from 60% to 70% for a period of 12 months. At 30 December 2008, this covenant stood at 69.0% and in view of the limited headroom, investors agreed to move to quarterly valuations in January 2009 to allow time for a long-term financial solution to be found for the fund. An LTV waiver has now been agreed with the banks until 1 June 2009 and a refinancing package has been agreed which will put the fund on a secure financial footing. The refinancing is subject to new equity being injected as further discussed in note 36 to the financial statements.

The existing facility also has an interest cover covenant of 127.5%. For the year ended 30 December 2008, interest cover was 161%.

X-Leisure has three property level banking facilities and a £415 million central facility. At 30 December 2007 £485 million was drawn down under these facilities and since there were no acquisitions or disposals during the year, the amount drawn down at 30 December 2008 was virtually unchanged at £487 million.

There were a number of changes to the facilities in the year, with the refinancing of the Milton Keynes property and the addition of the previously uncharged property at Norwich to the asset pool for the main facility.

The LTV covenant on this main facility is 70% and at 30 December 2008 this stood at 69.7%. In view of the limited headroom, investors agreed to move to quarterly valuations in January 2009 to allow time for a long-term financial solution to be found for the fund. Discussions are ongoing with investors about a capital raise and the fund is seeking to amend the terms of its banking arrangements to create additional financial flexibility. An LTV waiver has now been agreed with the banks until 31 May 2009 in order to facilitate the implementation of this strategy.

The existing facility also has an interest cover covenant of 130%. For the year ended 30 December 2008, interest cover was 177%.

The German portfolio is financed by six facilities denominated in Euros. At 30 December 2008 the underlying debt was €484 million, which was virtually unchanged from the comparative figure of €485 million for 2007, but the treatment in the financial statements is now different. In 2007, the portfolio was majority-owned and the borrowings were included in Group debt. At the prevailing 2007 year end exchange rate this was equivalent to £355 million. Following the disposal of half the Group's interest, this debt is now shown off balance sheet and the Group's see through share is 48.8%. At the prevailing 2008 exchange rate, this was equivalent to £228 million. Since the investment in Germany is largely hedged, the significant difference arising from foreign exchange movements is predominantly shown through reserves.

All LTV and ICR covenants on the German debt were met at the year end.

FIX UK has debt of £135 million, of which the Group's share is 20%. The Group is not exposed to any further drawdowns that may be required if valuations threaten the LTV covenants on this debt. As explained in note 18b to the financial statements, at the end of the year the Group had conservatively written off the value of its remaining interest in FIX UK so the debt has been excluded from the figures above.

Other JVs include the investments in Braehead, Cardiff and the MEN Arena. The Group continued to provide cost overrun and interest guarantees on Cardiff in the year though, following the sale of the Costco unit, £16.4 million of the relevant loan was repaid. As described above, the sale of our remaining joint venture interest in Cardiff will release the Group from any further obligations under this loan.

The Braehead development is now complete and the relevant loan has been transferred into long-term investment finance, as a consequence of which the Group guarantee has expired.

Interest rate hedging

The Group has a number of interest rate swaps against loans on its wholly-owned properties and the core revolving credit facility. It is also exposed to a share of interest rate swaps held by its associates and joint ventures. The effect of these swaps is to fix the amount of interest payable on the loans but, as a result of the dramatic falls in interest rates in the latter part of 2008, the change in fair value of these swaps has led to an unrealised loss of £47.8 million for the year. The recognition of this loss is required by accounting standards but it should be noted that it will not be crystallised unless the underlying swaps are closed out.

Foreign exchange hedging

During the year, the Group entered into a forward currency contract for €115 million to be settled in April 2009 as a hedge of its net investment in its German portfolio. On the disposal of 50% of this portfolio, half of this hedge was closed out by an offsetting trade to purchase €57.5 million on the same maturity date. Owing to the strengthening of the euro against sterling in the latter part of 2008, the value of the net hedge at the year end was a liability of £14.2 million.

Since the year end, the Group has entered further forward contracts to fix the amount payable on the expiry of these initial contracts as protection against further changes in exchange rates, and to extend the life of the hedge to April 2010 but in the reduced amount of €47 million. The cash settlement on 30 April 2009 as a consequence of these transactions is £8.8 million.

To the extent the hedge is effective under accounting rules, valuation movements on the forward contracts are shown in reserves where they partially offset the gain in the value of the Group's German investments.

Tax

The Group tries to ensure that its corporate structure remains as tax efficient as possible under current legislation. During 2008 there was a current tax credit of £1.1 million and a deferred tax credit of £13.0 million, reflecting the reversal of previous deferred tax liabilities arising on financial instrument revaluations in 2008.

The Group has significant tax losses which may be available for offset against future profits and is carrying a small deferred tax asset in respect of these.

Dividends

Despite recurring pre-tax profit remaining strong, impairments caused by falls in the value of the Group's investment and trading properties have exhausted the Company's distributable reserves at the end of the year. The Company would therefore have been unable to pay a final dividend in any event.

Although a capital restructuring has been approved by shareholders to convert the Company's share premium account into distributable reserves, this will not become effective until approved by the Court. Before approving the reduction, the Court will look to see that the creditors of the Company have either consented to it or that protections have been put in place to safeguard their position. Court approval will be sought once the position of the Company's creditors can be satisfactorily agreed.

Charles Staveley

Group Finance Director

Risks and uncertainties

There are a number of principal risks and uncertainties which could have a material impact on the Group's future performance and could cause actual results to differ materially from expected and historical results. We have identified the following principal risk areas which the Group could face in the future. References to the Group include the funds and joint ventures in which Capital & Regional has an interest.

Funding and Treasury Risks

Funding risks

The Group has a significant amount of indebtedness that may limit its financial and operational flexibility. The Group's ability to generate sufficient cashflow and to refinance its indebtedness when due will depend on its future financial performance, which over the longer term will be affected by a range of economic, competitive and business factors, many of which are outside the Group's control. Given the existing level of indebtedness of the Group, and the significant deterioration in the credit markets, there can be no assurance that the Group will be able to refinance its existing debt when it matures or obtain additional debt financing on economic terms.

Covenant compliance

The various borrowings of the Group contain covenants. A breach of any of these restrictions or covenants, whether as a result of declining property values or otherwise, could cause a default with respect to the debt and, if unremedied, result in the accelerated maturity of some or all of the indebtedness of the Group. If over the longer term the Group is unable to dispose of sufficient assets to fund repayment of debt due in the event of an acceleration of maturity, the Group risks becoming insolvent or otherwise ceasing its operations.

Foreign exchange rate risks

The Group may incur losses as a result of fluctuations in the exchange rate between the pound and the euro in respect of its German joint venture for which it has not, or not effectively, hedged its risk. The underlying exposure on the euro value of its German joint venture properties is partially hedged by funding their purchase with euro denominated debt. The Group hedges part of the remaining exposure through the use of derivatives such as forward contracts, which may limit gains, result in losses or have other adverse consequences. There may be a timing difference on the cash settlement of a gain or loss on the derivative and the realisation of the equal and opposite gain on the investment being hedged, which will only arise when that asset is sold.

Interest rate hedging risks

The expiration of interest rate swaps, entering into certain transactions for which hedging is not available on commercially reasonable terms (if it all), or the inaccurate hedging of interest rate exposure, may expose the Group to market interest rate risk.

The hedging transactions used by the Group to minimise interest rate risk may limit gains, result in losses or have other adverse consequences. Where interest rate swaps are treated as liabilities because the contracted interest rate is above the current market rate, if the underlying asset is sold before the swap matures it can result in the realisation of significant losses. Because a significant proportion of the Group's indebtedness has been incurred at a fixed rate of interest, the Group will not fully benefit from the current low interest rate environment. In addition, the Group is potentially subject to credit risk in the current economic environment based on hedge counterparties' inability to perform their obligations.

Property Risks

Property investment market risks

The Group's business is dependent on economic conditions and commercial real estate markets, which have recently experienced significant distress. Small changes in property market yields can have a significant effect on the value of the properties owned by the Group. The effect of the significant levels of debt funding magnifies the impact of valuation movements. The real estate markets in the UK and, to a lesser extent Germany, have been adversely impacted by the ongoing global banking crisis, with property values demonstrating substantial and continuing declines. It is not clear for how long or the extent to which economic conditions will continue to impact these markets adversely, or to what degree economic conditions will deteriorate further.

Tenant risks

The Group is subject to the credit risks associated with tenants and is specifically dependent on the retail and leisure sectors, which are exposed to declining consumer spending in the current economic climate. A significant decline in overall retail and leisure tenant revenues, or the bankruptcy or insolvency of significant individual tenants, or of a substantial number of smaller tenants, would materially decrease revenues (including SNO!zone revenues) and available cash, and could also materially lower the value of the properties owned by the Group. Retail tenants are also facing increasing competition from major supermarkets and hypermarkets as they expand the range of products offered and from the increased penetration of online and discount retailers. Any resulting trade diversion from traditional retail outlets to the internet and major supermarkets could adversely affect the Group's tenants, with the risk that tenant defaults and voids could increase.

Property management fee risks

A significant part of the Group's income is derived from property and asset management fees, which its wholly-owned subsidiary CRPM earns as property and asset manager pursuant to management contracts with each of the three funds in which it has investments. This income is to a large extent based upon property valuations and as property values have fallen, so has the income derived from this activity. These long-term management contracts can be terminated under certain circumstances, including amongst other things, underperformance of the property portfolio over a period of time, failure to hold the minimum number of fund units required, change of control, or negligence.

Nature of investments

It may not be possible for the Group to realise its investments in associates and joint ventures at the net asset values carried in the Group's accounts. The Group's principal investments comprise units in the funds and the shares in its German joint venture. The market for these units and shares is illiquid. There may also be other restrictions on the ability to sell these investments in the joint venture agreements and fund management agreements, such as the requirement to hold a minimum number or value of the units in a given fund so long as the Group acts as property and asset manager for that fund.

Tax and regulation

The Group is exposed to changes in tax legislation or the interpretation of tax legislation, particularly changes in the basis of taxation or those directed at offshore structures. In addition, the Group is potentially exposed to tax liabilities in respect of previous transactions it has undertaken where the tax authorities disagree with the tax treatment adopted. One such exposure is the potential £19.5 million tax and interest liability resting upon the outcome of current litigation as described in note 10 to the financial statements which, whilst provided for, would need to be funded.

Changes in property-related regulations could also adversely affect the Group.

Loss of key management

The Group's business is dependent on the skills of a small number of key individuals. Whilst the Group has ongoing service agreements with each of these individuals, their retention cannot be guaranteed. Equally, the ability to attract new employees with the appropriate expertise and skills cannot be guaranteed.

The risks noted above do not comprise all those potentially faced by the Group and are not intended to be presented in any order of priority. Additional risks and uncertainties currently unknown to the Group, or which the Group currently deems immaterial, may also have an adverse effect on the financial condition or business of the Group in the future. These issues are kept under constant review to allow the Group to react in an appropriate and timely manner to help mitigate the impact of such risks.

Going concern

The statement of the directors in respect of going concern is included in the Corporate Governance report. The basis of preparation of the financial statements is explained in note 1 to the financial statements. Detailed disclosures regarding the liquidity risk of the Group are included in notes 23 and 24 to the financial statements.

Current economic conditions have created uncertainty across many business sectors including the property investment market. In particular the Group has suffered significant decreases in the value of its property assets. The availability of finance to the sector has become significantly restricted and the terms on which finance is made available have become markedly more stringent.

The Group prepares cash flow and covenant compliance forecasts to demonstrate that it has adequate resources available to continue in operation for the foreseeable future, being at least 12 months from the date of this report. In these forecasts the directors specifically consider anticipated future market conditions and the Group's principal risks and uncertainties.

The directors consider that a material uncertainty exists around the continuing availability of satisfactory levels of bank and other funding to the Group in the light of the current adverse conditions in the property market and the wider economy, and the possibility that these could deteriorate further. This material uncertainty reflects the potential for further falls in property valuations to cause breaches of various financing covenants, either at Group, fund or joint venture level. In particular the Group is dependent upon its core central facility which has asset cover and gearing covenants. This material uncertainty may cast significant doubt on the Group's ability to continue as a going concern, such that it may be unable to realise its assets and discharge its liabilities in the normal course of business.

As described in the Chairman's Statement, the Chief Executive's Statement and the Financial Review, the Group is working on plans to minimise the effects of further adverse market conditions and strengthen its financial position through:

the completion of fundraisings and renegotiation of banking facilities in The Junction and X-Leisure;
the refinance or sale of some or all of its wholly-owned properties; and
the completion of a satisfactory renegotiation of the Group's core revolving credit facility, including providing headroom in the facility should the potential tax liability described in note 10 to the financial statements become due for payment.

The directors are confident that the transactions described above can be successfully completed. However, if this were not to be the case then the directors believe the funding and covenants would need to be further renegotiated with the appropriate lenders in line with the changed circumstances of the Group and market environment.

Therefore, after making enquiries, and considering the likelihood of completion of the transactions set out above, the directors have a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. Accordingly the directors continue to adopt the going concern basis in preparing the annual report and accounts.

Statement of Directors' Responsibilities

The directors are required to prepare financial statements for the Group in accordance with International Financial Reporting Standards ('IFRS'). Company law requires the directors to prepare such financial statements in accordance with IFRS, the Companies Act 1985 and Article 4 of the IAS Regulation.

International Accounting Standard 1 requires that financial statements present fairly for each financial year the Group's financial position, financial performance and cash flows. This requires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expense set out in the International Accounting Standards Board's "Framework for the Preparation and Presentation of Financial Statements". In virtually all circumstances, a fair presentation will be achieved by compliance with all applicable International Financial Reporting Standards. Directors are also required to:

properly select and apply accounting policies;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and
prepare the accounts on a going concern basis unless, having assessed the ability of the Group to continue as a going concern, management either intends to liquidate the entity or to cease trading, or have no realistic alternative but to do so.

The directors have elected to prepare the parent company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The parent company financial statements are required by law to give a true and fair view of the state of affairs of the Company. In preparing these financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent; and
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements.

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company, for safeguarding the assets, for taking reasonable steps for the prevention and detection of fraud and other irregularities and for the preparation of a directors' report and directors' remuneration report which comply with the requirements of the Companies Act 1985. The directors, having prepared the financial statements, have permitted the auditors to take whatever steps and undertake whatever inspections they consider to be appropriate for the purpose of enabling them to give their audit opinion.

The directors are also responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' responsibility statement

The annual report and accounts complies with the Disclosure and Transparency Rules ('DTR') of the United Kingdom's Financial Services Authority in respect of the requirement to produce an annual financial report.

The annual report and financial statements is the responsibility of, and has been approved by, the directors.

We confirm that to the best of our knowledge:

the consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the EU;
the Company financial statements have been prepared in accordance with the applicable accounting standards;
the financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and
the annual report includes a review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

On behalf of the Board

H Scott-Barrett

Chief Executive

C Staveley

Group Finance Director

23 April 2009

Consolidated income statement

For the year ended 30 December 2008

		2008	2007
	Note	£m	£m
Rents, management fees and other revenue	4a	75.3	86.8
Performance fees	4a,4b	(9.9)	(52.8)
Revenue	4a	65.4	34.0
Cost of sales	5	(41.7)	(19.1)
Gross profit		23.7	14.9

Administrative costs		(23.1)	(13.7)
Share of loss in joint ventures and associates	18	(432.9)	(119.2)
Loss on revaluation of investment properties	13a	(31.7)	(14.8)
(Loss)/profit on sale of properties and investments	13c	(6.5)	1.8
Impairment of goodwill	14	(8.0)	-

Loss on ordinary activities before financing		(478.5)	(131.0)

Finance income	6	2.4	3.5
Finance costs	7	(40.2)	(39.5)

Loss before tax	8	(516.3)	(167.0)

Current tax	10a	1.1	3.9
Deferred tax	10a	13.0	(3.7)
Tax credit		14.1	0.2

Loss for the year		(502.2)	(166.8)


Basic loss per share	12	(715)p	(236)p
Diluted loss per share	12	(715)p	(236)p

All results derive from continuing activities. The loss for the current year and the preceding year is fully attributable to equity shareholders.

Consolidated balance sheet

As at 30 December 2008

		2008	2007
	Note	£m	£m
Non-current assets
Investment property	13a	15.3	678.5
Interest in long leasehold property	13a	10.8	15.6
Goodwill	14	4.2	12.2
Plant and equipment	15a	1.3	1.5
Available for sale investments	15b	0.2	0.3
Receivables	16	30.2	7.2
Investment in associates	18b	182.3	599.4
Investment in joint ventures	18c	34.4	12.0
Deferred tax asset		1.4	-
Total non-current assets		280.1	1,326.7

Current assets
Trading property	13a	72.8	95.9
Receivables	17	14.4	19.9
Current tax recoverable		1.6	1.6
Cash and cash equivalents	19	4.1	37.1
Total current assets		92.9	154.5

Total assets		373.0	1,481.2

Current liabilities
Bank loans	23a	(18.7)	(0.2)
Trade and other payables	20	(55.7)	(102.2)
Current tax liabilities		(15.9)	(18.4)
		(90.3)	(120.8)

Non-current liabilities
Bank loans	23a	(93.8)	(622.4)
Other payables	21	(2.8)	(17.5)
Deferred tax liabilities		-	(17.5)
Total non-current liabilities		(96.6)	(657.4)

Total liabilities		(186.9)	(778.2)

Net assets		186.1	703.0

Equity
Share capital	25	7.1	7.1
Share premium account	27	220.5	219.7
Revaluation reserve	27	-	2.4
Other reserves	28	13.8	10.9
Capital redemption reserve	27	4.4	4.4
Own shares held	27	(9.7)	(8.7)
Retained earnings	27	(50.0)	467.2
Equity shareholders' funds	24	186.1	703.0

Basic net assets per share	30	£2.61	£9.89
Triple net, fully diluted net assets per share	30	£2.67	£10.04
EPRA diluted net assets per share	30	£3.25	£10.08

These financial statements were approved by the Board of directors, authorised for issue and signed on their behalf on 23 April 2009 by:

Charles Staveley

Group Finance Director

Consolidated statement of recognised income and expense

For the year ended 30 December 2008

		2008	2007
	Note	£m	£m
Revaluation loss on owner occupied property	13a, 27	(2.4)	(0.3)
Foreign exchange translation differences		5.9	7.6
Net investment hedge		(4.0)	(5.6)
		(0.5)	1.7

Loss for the year		(502.2)	(166.8)

Total recognised income and expense		(502.7)	(165.1)

Attributable to:
Equity shareholders	31	(502.7)	(165.1)

Reconciliation of movement in equity shareholders' funds

For the year ended 30 December 2008

		2008	2007
	Note	£m	£m
Opening equity shareholders' funds	31	703.0	913.1
Issue of shares	27	0.8	0.2
Share buy back and cancellation		-	(17.2)
Purchase of own shares	27	(0.7)	-
Credit in respect of charge for share-based payments	27	1.2	0.2
Arising on conversion/repurchase of CULS		-	(9.0)
Amortisation of IFRS 1 reserve	28	(0.1)	(0.1)
		704.2	887.2

Total recognised income and expense		(502.7)	(165.1)
		201.5	722.1

Dividends paid	11	(15.4)	(19.1)
Closing equity shareholders' funds		186.1	703.0

Consolidated cash flow statement

For the year ended 30 December 2008

		2008	2007
	Note	£m	£m
Net cash from operations	29	(23.5)	62.6

Distributions received from joint ventures and associates		20.4	25.6
Interest paid		(25.6)	(30.7)
Interest received		1.5	2.7
Income taxes paid		(0.8)	(3.8)

Cash flows from operating activities		(28.0)	56.4

Investing activities
Acquisitions of investment properties		-	(62.8)
Capital expenditure on investment properties		(1.5)	(15.2)
Acquisitions and disposals of other fixed assets		(0.3)	(1.1)
Disposals/(acquisitions) of subsidiaries		75.1	(39.4)
Cash (disposed of)/acquired in business combinations		(19.1)	1.0
Proceeds from sale of investment and trading properties		-	1.0
Proceeds from sale of investments		-	0.2
Investment in joint ventures		(6.7)	(3.3)
Loans to joint ventures		(5.4)	(6.1)
Loans repaid by joint ventures		9.5	0.7

Cash flows from investing activities		51.6	(125.0)

Financing activities
Proceeds from the issue of ordinary share capital		0.8	0.1
Purchase of own shares		(0.7)	(1.3)
Share buy backs and cancellation		-	(17.2)
Repurchase of CULS		-	(10.5)
Bank loans drawn down		162.3	172.3
Bank loans repaid		(199.9)	(48.5)
Loan arrangement costs		(0.3)	(0.9)
Settlement of foreign exchange forward		(2.9)	(4.6)
Dividends paid to minority interests	22	(1.3)	(1.4)
Equity dividends paid	11	(15.4)	(19.1)

Cash flows from financing activities		(57.4)	68.9

Net (decrease)/increase in cash and cash equivalents		(33.8)	0.3

Cash and cash equivalents at the beginning of the year		37.1	35.5
Effect of foreign exchange rate changes		0.8	1.3

Cash and cash equivalents at the end of the year		4.1	37.1

Notes to the financial statements

For the year ended 30 December 2008

1 Significant Accounting Policies

General information

Capital & Regional plc is a company incorporated in the United Kingdom under the Companies Act 1985. The nature of the Group's operations and its principal activities are set out in note 2 and in the operating and financial reviews.

Adoption of new and revised standards

In the current year, the Group has adopted IFRS 7 "Financial Instruments: Disclosures" and the related amendment to IAS 1 "Presentation of Financial Statements". The impact of the adoption of IFRS 7 and the changes to IAS 1 has been to expand the disclosures provided in these financial statements regarding the Group's financial instruments and management of capital as shown in note 24.

One Interpretation issued by the International Financial Reporting Interpretations Committee was adopted by the Group in the current period:

IFRIC 11IFRS 2: Group and Treasury Share Transactions

The adoption of this Interpretation has not led to any material changes in the Group's accounting policies.

At the date of authorisation of these financial statements, the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective (and in some cases had not yet been adopted by the EU):

IFRS 1/IAS 27 (amended May 2008) Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate

IFRS 2 (amended 2008) Share-based payment - Vesting Conditions and Cancellations

IFRS 3 (revised 2008) Business Combinations

IFRS 8 Operating segments

IAS 1 (revised 2007) Presentation of Financial Statements

IAS 23 (revised 2007) Borrowing Costs

IAS 27 (revised 2008) Consolidated and Separate Financial Statements

IFRIC 12 Service Concession Agreements

IFRIC 14 IAS 19: The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

IFRIC 15 Agreements for the Construction of Real Estate

IFRIC 16 Hedges of a Net Investment in a Foreign Operation

IFRIC 17 Distributions of Non-cash Assets to Owners

IFRIC 18Transfers of Assets from Customers

Amendments to IFRIC 9 and IAS 39 (March 2009) Embedded Derivatives

Amendments to IFRS 7 (March 2009) Improving Disclosures about Financial Instruments

Amendments to IAS 32 and IAS 1 (February 2008) Puttable Financial Instruments and Obligations Arising on Liquidation

Amendments to IAS 39 (July 2008) Eligible Hedged Items

Amendments to IAS 39 and IFRS 7 (October 2008) Reclassification of Financial Assets

Amendments to IAS 39 and IFRS 7 (November 2008) Reclassification of Financial Assets - Effective Date and Transition

Improvements to IFRS (May 2008)

The directors are assessing the impact that the adoption of these Standards and Interpretations will have on the financial statements of the Group in future periods.

Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and therefore the Group financial statements comply with Article 4 of the EU IAS Regulation.

The financial statements are prepared on the historical cost basis except that investment and development properties, owner-occupied properties and derivative financial instruments are stated at fair value. The accounting policies have been applied consistently to the results, other gains and losses, assets, liabilities, income and expenses.

These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Group operates. Foreign operations are included in accordance with the accounting policies set out below.

Basis of preparation

Going concern

the completion of fundraisings and renegotiation of banking facilities in The Junction and X-Leisure;
the refinance or sale of some or all of its wholly-owned properties; and
the completion of a satisfactory renegotiation of the Group's core revolving credit facility, including providing headroom in the facility should the potential tax liability described in note 10 become due for payment.

The directors are confident that the transactions described above can be successfully completed. However, if this were not to be the case then the directors believe that the funding and covenants would need to be further renegotiated with the appropriate lenders in line with the changed circumstances of the Group and market environment.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of financial statements requires management to make judgements, estimates and assumptions that may affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses.

The critical judgements and estimations that the directors have made in the process of applying the Group's accounting policies that have the most significant effect on the amounts recognised in the financial statements, or that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The directors believe that the estimates and associated assumptions used in the preparation of the financial statements are reasonable. However, actual outcomes may differ from those anticipated.

The directors have assessed changes in recent legislation, case law and accounting standards, along with future projections for the Group, in determining the current and deferred tax assets and liabilities and credit to the income statement, as disclosed in note 10.
The directors have relied upon the work undertaken at 30 December 2008 by independent professional qualified valuers, as disclosed in note 13b, in assessing the fair value of certain of the Group's investment and owner occupied properties. In particular, this has included an assessment of the uncertainty surrounding those valuations described in that note.
The directors have also made judgements about future rental income and the likelihood of certain developments proceeding in arriving at the value of the investment and trading properties shown at directors' valuation as described in note 13b.
Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires estimates of the expected life of the X-Leisure fund, the future cash flows expected to arise from the management of it and a suitable discount rate in order to calculate present value. The carrying amount of goodwill at the balance sheet date was £4.2m after an impairment of £8.0m during the year as disclosed in note 14.
The directors have estimated the potential writedown in the valuation of properties owned by FIX UK in calculating the impairment of the Group's investment in the associate as disclosed in note 18b.
The directors have relied upon the work undertaken at 30 December 2008 by independent third party experts in assessing the fair values of the Group's derivative financial instruments, which are disclosed in notes 20 and 24f.
The directors have reviewed the non-market based vesting assumptions in relation to the LTIPs. Given the Group's performance over the last three years and the Group's estimated performance over the next two years, the directors have concluded that no shares will vest under the non-market conditions for 2006 and 2007. This leads to a credit to retained earnings of £0.3m as shown in note 27.

The judgements, estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The principal accounting policies adopted are set out below.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries), joint ventures and associates made up to 31 December each year.

Subsidiaries

Subsidiaries are those entities controlled by the Group. Control is assumed when the Group has the power to govern the financial and operating policies of an entity, or business, to benefit from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The reporting period for subsidiaries ends on 31 December and the financial statements of subsidiaries are consolidated from this date.

Joint ventures and associates

In accordance with IAS 28 "Investments in Associates" and IAS 31 "Interests in Joint Ventures", associates and joint ventures are accounted for under the equity method, whereby the consolidated balance sheet and income statement incorporate the Group's share of net assets and losses after tax. The losses include revaluation movements on investment properties. The reporting period for joint ventures and associates ends on 31 December and their financial statements are consolidated from this date. In accordance with IAS 39 "Financial Instruments: Recognition and Measurement", associates and joint ventures are reviewed to determine whether any impairment loss should be recognised at the end of the reporting period.

Goodwill

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the acquired entity over the Group's interest in the fair value of the assets, liabilities and contingent liabilities acquired. Goodwill which is recognised as an asset is reviewed for impairment at least annually. The impairment is calculated on the value in use of the goodwill. Any impairment is recognised immediately in the income statement and is not subsequently reversed. Where the fair value of the assets, liabilities and contingent liabilities acquired is greater than the cost, the excess, known as negative goodwill, is recognised immediately in the income statement.

Foreign currency

Foreign currency transactions

Transactions in foreign currencies are translated into sterling at exchange rates approximating to the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to sterling at the exchange rate ruling at that date and, unless they relate to the hedging of the net investment in foreign operations, differences arising on translation are recognised in the income statement.

Financial statements of foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated into sterling at the exchange rates ruling at the balance sheet date. The operating income and expenses of foreign operations are translated into sterling at the average exchange rates for the period. Significant transactions, such as property sales, are translated at the foreign exchange rate ruling at the date of each transaction. The principal exchange rate used to translate foreign currency denominated amounts in the balance sheet is the rate at the end of the year: £1 = €1.0344 (2007: £1 = €1.365). The principal exchange rate used for the income statement is the average rate for the year: £1 = €1.2558 (2007: £1 = €1.462).

Net investment in foreign operations

Exchange differences arising from the translation of the net investment in foreign operations are taken to the foreign currency reserve and the effective portions of related foreign currency hedges are taken to the net investment hedging reserve. The net investment in foreign operations includes the equity of the underlying entities and the portion of shareholder loans to those entities that is treated as equity where there is no intention of repayment in the foreseeable future. All exchange differences previously accumulated in equity are transferred to the income statement upon disposal or, where control is lost, part-disposal of the foreign operation.

Plant and equipment

Plant and equipment is stated at the lower of cost or valuation, net of depreciation and any provision for impairment. Depreciation is provided on all tangible fixed assets, other than investment properties and land, over their expected useful lives:

Fixtures and fittings - over three to five years, on a straight line basis.
Motor vehicles - over four years, on a straight line basis.

Property portfolio

Investment properties

Investment properties are stated at fair value, being the market value determined by professionally qualified external or director valuers, with changes in fair value being included in the income statement. In accordance with IAS 40 "Investment Property", no depreciation is provided in respect of investment properties.

Leasehold properties

Leasehold properties that are leased to tenants under operating leases are classified as investment properties or development properties, as appropriate, and included in the balance sheet at fair value.

Owner-occupied long leasehold properties

Owner-occupied long leasehold properties are included in the financial statements at fair value with changes in fair value recognised directly in equity except for falls below historic cost which are recognised in the income statement.

Properties under development

Attributable internal and external costs incurred during the period of development are capitalised. Interest is capitalised gross in the associates and joint ventures before deduction of related deferred tax relief. There is no interest capitalised in the Group. Interest is calculated on the development expenditure by reference to specific borrowings where relevant. A property ceases to be treated as being under development when substantially all activities that are necessary to make the property ready for use are complete.

Refurbishment expenditure

Refurbishment expenditure in respect of major works is capitalised. Renovation and refurbishment expenditure of a revenue nature is expensed as incurred.

Property transactions

Acquisitions and disposals are accounted for at the date of legal completion. Investment properties in the course of disposal are reclassified as held for sale once contracts have been exchanged. Properties are transferred between categories at the estimated market value on the transfer date.

Trading property assets

Properties held with the intention of disposal are valued at the lower of cost and net realisable value. Any impairment in the value of trading properties is shown under Cost of Sales.

Head leases

Where an investment property is held under a head lease, the head lease is initially recognised as an asset at the sum of the present value of the minimum lease ground rent payable. The corresponding rent liability to the leaseholder is included in the balance sheet as a finance lease obligation.

Tenant leases and incentives

Management has exercised judgement in considering the potential transfer of risks and rewards of ownership in accordance with IAS 17 "Leases" for all properties leased to tenants and has determined that all such leases are operating leases. Incentives and costs associated with entering into tenant leases are amortised over a straight-line basis over the term of the lease.

Operating leases

Annual rentals under operating leases are charged to the income statement as incurred.

Financial assets and financial liabilities

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Trade receivables and payables

Trade receivables and payables are stated at fair value, less any provision for impairment against trade receivables.

Borrowings

Borrowings are held at amortised cost. They are recognised initially at fair value, after taking into account any discount on issue and attributable transaction costs. Subsequently, such discounts and costs are charged to the income statement over the term of the borrowing at a constant return on the carrying amount of the liability.

Derivative financial instruments

Derivative financial instruments are designated as at fair value through profit or loss in accordance with IAS 39 "Financial Instruments: Recognition and Measurement". They are recognised initially at fair value, which equates to cost, and are subsequently remeasured at fair value. The fair value of forward foreign exchange contracts is calculated by reference to spot and forward exchange rates at the balance sheet date. The fair value of interest rate and basis swaps is calculated by reference to appropriate forecasts of yield curves between the balance sheet date and the maturity of the instrument. Changes in fair value are included as finance income or finance costs in the income statement, except for gains or losses on the portion of an instrument that is an effective hedge of the net investment in a foreign operation, which are recognised in the net investment hedging reserve.

Minority interest

The minority interest, arising from the Group's German operations, is classified as a liability and held at fair value in the balance sheet of the joint venture. Under the terms of the contract the minority has a put option to sell their share back to the joint venture typically after 5 years from acquisition. The minority interests' share of income and expenses while the German operations were wholly-owned is treated as a non-recurring finance charge in the income statement.

Tax

Tax is included in the Group income statement except to the extent that it relates to items recognised directly in equity, in which case the related tax is recognised in equity.

Current tax is based on the taxable profit for the year and is calculated using tax rates that have been enacted or substantively enacted. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are never taxable or tax deductible (permanent differences) or will be taxable at a later date (temporary differences). Temporary differences principally arise from using different balance sheet values for assets and liabilities from their respective tax base values.

Deferred tax is provided using the balance sheet liability method on these temporary differences with the exception of: goodwill not deductible for tax purposes; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit; and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates applicable at the balance sheet date. A deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying temporary differences can be deducted.

Employee benefits

Pension costs

Pension liabilities, all of which relate to defined contribution schemes, are charged to the income statement as incurred.

Share-based payments

The Group has applied the arrangements of IFRS 2 "Share-based Payment". Equity settled share-based payments are measured at fair value at the date of grant. The fair values of the COIP, CEO share match scheme and SAYE scheme are calculated using Monte Carlo simulations or the Black-Scholes model as appropriate. The fair values of the 2006 and 2007 LTIPs are calculated using a normal distribution model, which the directors consider not to be materially different from a binominal model.

The fair values are dependent on factors including the exercise price, expected volatility, period to exercise and risk free interest rate. Market related performance conditions are reflected in the fair values at the date of grant and are expensed on a straight-line basis over the vesting period. Where awards are cancelled, the remaining fair value is expensed immediately. Non-market related performance conditions are not reflected in the fair values at the date of grant. At each reporting date, the Group estimates the number of shares likely to vest under non-market related performance conditions so that the cumulative expense will ultimately reflect the number of shares that do vest.

Own shares

Own shares held by the Group are shown as a deduction from shareholders' funds, and included in other reserves. The cost of own shares is transferred from the own shares held reserve to the retained earnings reserve when shares in the underlying incentive schemes vest. The shares are held in an Employee Share Ownership Trust.

Revenue

Performance fees

Performance fees are recognised, in line with the property management contracts, at the end of the performance period to which they relate. The performance period is normally three years. CRPM earns performance fees for the Mall and Junction Funds on the outperformance relative to the greater of 12% and the appropriate IPD index. For the X-Leisure Fund the benchmark is only 12%. Where performance falls short of these benchmarks, fees are repayable, up to the amount received for the previous two years. Where there is a reasonable likelihood that part of a performance fee will be repaid the estimated repayment will not be recognised as income until the outcome can be reliably estimated.

Management fees

Management fees are recognised, in line with the property management contracts, in the period to which they relate. They include income in relation to services provided by CRPM to both joint ventures and associates for asset management, rent reviews, lettings, project co-ordination, procurement, service charges and directly recoverable expenditure.

Net rental income

Net rental income is equal to gross rental income, recognised in the period to which it relates and including tenant incentives, less expenses directly related to letting and holding the properties.

Interest and dividend income

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount. Dividend income from investments is recognised when the shareholders' right to receive payment has been established.

Finance costs

All borrowing costs are recognised under Finance costs in the income statement in the period in which they are incurred. Finance costs also include the amortisation of loan issue costs; the unwinding of the discounting of liabilities relating to CAP awards; the minority interests' share of income and expenses while the German portfolio was wholly-owned; any loss in the value of the Group's wholly-owned interest rate swaps; and any loss in the ineffective portion of the Group's hedge of its net investment in a foreign operation.

Segmental reporting

Segments

The Group operates in two main business segments, an assets business and an earnings business. The assets business consists of property investment activities and the earnings business consists of property management activities and the ski slope business of SNO!zone. The businesses are the basis on which the Group reports its primary business segments.

Inter segment transactions

All transactions between segments are accounted for on an arm's length basis.

2 Segmental analysis: non statutory information - see through basis

2a Segmental analysis

		Assets		Earnings		Total
		Property	Property	Property
		investment	investment	management
		UK	Germany	UK	SNO!zone
Year to 30 December 2008	Note	£m	£m	£m	£m	£m
Net rents	2b	56.7	29.4	-	-	86.1
Net interest	2b	(47.4)	(16.7)	-	-	(64.1)

Contribution	2b	9.3	12.7	-	-	22.0
Management fees	4a	-	-	22.8	-	22.8
SNO!zone income	4a	-	-	-	14.9	14.9
SNO!zone expenses	5	-	-	-	(13.4)	(13.4)
Management expenses		(3.2)	(1.6)	(13.9)	-	(18.7)
						-
Recurring pre-tax profit		6.1	11.1	8.9	1.5	27.6

Performance fees clawback	4a,4b	-	-	(9.9)	-	(9.9)
Benefit of performance fee clawback	18d	2.4	-	-	-	2.4
Variable overhead		-	-	0.1	-	0.1
Revaluation of investment properties		(339.9)	(34.0)	-	-	(373.9)
Deemed disposal from Mall rights issue and related costs	18a	(26.2)	-	(2.6)	-	(28.8)
Loss on disposals		(41.9)	(0.4)	-	-	(42.3)
Impairment of trading property	5, 13a	(23.5)	-	-	-	(23.5)
Impairment of goodwill	14	-	-	(8.0)	-	(8.0)
Impairment of associate	18b	(8.4)	-	-	-	(8.4)
Loss on financial instruments		(36.4)	(11.4)	-	-	(47.8)
Other non-recurring items		(2.8)	2.0	(3.0)	-	(3.8)

(Loss)/profit before tax		(470.6)	(32.7)	(14.5)	1.5	(516.3)
Tax						14.1

Loss after tax						(502.2)

Net assets/(liabilities)		152.1	39.9	(3.5)	(2.4)	186.1

2b Contribution

		Gross	Property	Void	Net	Net
		rent	costs	costs	rent	interest	Contribution
Year to 30 December 2008	Note	£m	£m	£m	£m	£m	£m
Non statutory information - see through basis

Mall (Group share: 20.4%)1	18d	35.4	(8.5)	(1.4)	25.5	(16.8)	8.7
Junction (Group share: 27.3%)1	18d	13.8	(2.4)	(0.3)	11.1	(9.9)	1.2
X-Leisure (Group share: 19.4%)1	18d	10.4	(2.3)	(0.3)	7.8	(5.7)	2.1
FIX UK (Group share: 20.0%)3		1.9	(0.1)	(0.1)	1.7	(1.9)	(0.2)

Total associates		61.5	(13.3)	(2.1)	46.1	(34.3)	11.8

Xscape Braehead (Group share: 50%)1		1.6	(0.5)	(0.1)	1.0	(2.2)	(1.2)
German portfolio (Group share: 50%)2		4.7	(0.6)	-	4.1	(1.7)	2.4
Manchester Arena (Group share: 30%)1		1.8	(0.2)	(0.1)	1.5	(1.0)	0.5
Others (Group share: 50%)1		0.6	-	-	0.6	(0.6)	-

Total joint ventures		8.7	(1.3)	(0.2)	7.2	(5.5)	1.7

Statutory information
German portfolio2		27.9	(2.6)	-	25.3	(15.0)	10.3
FIX UK3		1.7	(0.3)	-	1.4	(1.4)	-
Other UK		1.4	(0.4)	-	1.0	(3.9)	(2.9)

Total rental income from investment property		31.0	(3.3)	-	27.7	(20.3)	7.4
Great Northern4		6.6	(0.9)	(0.6)	5.1	(4.0)	1.1

Total rental income from wholly owned property	4a	37.6	(4.2)	(0.6)	32.8	(24.3)	8.5

Total on a see through basis	2a	107.8	(18.8)	(2.9)	86.1	(64.1)	22.0

With the exception of the German portfolio, all associates and joint ventures are held within the United Kingdom and Jersey.

1	The Group's average share during the year. As described in note 18b, following the rights issue on 27 June 2008, the Group's share in the Mall fell from 24.24% to 16.72%.
2	With the exception of Capital & Regional (Europe Holding 4) Limited, the German portfolio was treated as wholly owned until 6 October 2008 after which the sale of 50% of the Group's share of the relevant entities meant they were treated as joint ventures as described in note 32b. Capital & Regional (Europe Holding 4) Limited was treated as wholly owned until 30 December 2008.
3	FIX UK was wholly owned until 6 March 2008, after which the Group's share was reduced to 20% and it was treated as an associate as described in note 32a.
4	Great Northern is carried as a trading property in the balance sheet.

2a Segmental analysis

		Assets		Earnings		Total
		Property	Property	Property
		investment	investment	management
		UK	Germany	UK	SNO!zone
Year to 30 December 2007	Note	£m	£m	£m	£m	£m
Net rents	2b	70.0	24.9	-	-	94.9
Net interest	2b	(54.2)	(14.4)	-	-	(68.6)

Contribution	2b	15.8	10.5	-	-	26.3
Management fees	4a	-	-	26.0	-	26.0
SNO!zone income	4a	-	-	-	14.3	14.3
SNO!zone expenses		-	-	-	(12.2)	(12.2)
Management expenses		(5.6)	(0.9)	(15.2)	-	(21.7)
						-
Recurring pre-tax profit		10.2	9.6	10.8	2.1	32.7

Performance fees clawback	4a,4b	-	-	(52.8)	-	(52.8)
Benefit of performance fee clawback	18d	18.1	-	-	-	18.1
Variable overhead		-	-	7.9	-	7.9
Revaluation of investment properties		(174.0)	9.6	-	-	(164.4)
Profit on disposals		1.6	-	-	-	1.6
(Loss)/gain on interest rate swaps		(8.8)	1.8	-	-	(7.0)
Other non-recurring items		-	(3.1)	-	-	(3.1)

(Loss)/profit before tax		(152.9)	17.9	(34.1)	2.1	(167.0)
Tax						0.2

Loss after tax						(166.8)

Net assets/(liabilities)		613.3	123.8	(34.0)	(0.1)	703.0

2b Contribution

		Gross	Property	Void	Net	Net
		rent	costs	costs	rent	interest	Contribution
Year to 30 December 2007	Note	£m	£m	£m	£m	£m	£m
Non statutory information - see through basis

Mall (Group share: 24.2%)1		44.2	(10.1)	(1.8)	32.3	(19.6)	12.7
Junction (Group share: 27.3%)1		15.7	(2.9)	(0.3)	12.5	(9.5)	3.0
X-Leisure (Group share: 18.8%)1		9.9	(2.1)	(0.3)	7.5	(5.1)	2.4

Total associates	18d	69.8	(15.1)	(2.4)	52.3	(34.2)	18.1

Xscape Braehead (Group share: 50%)1		2.0	(0.4)	(0.1)	1.5	(1.9)	(0.4)
Manchester Arena (Group share: 30%)1		1.6	(0.3)	(0.1)	1.2	(0.9)	0.3
Others (Group share: 50% - 66.67%)2		0.9	(0.4)	(0.1)	0.4	(0.4)	-

Total joint ventures	18e	4.5	(1.1)	(0.3)	3.1	(3.2)	(0.1)

Statutory information

German portfolio		29.6	(4.6)	(0.1)	24.9	(14.4)	10.5
FIX UK		9.5	(1.2)	(0.4)	7.9	(6.7)	1.2
Other UK		1.0	-	-	1.0	(6.1)	(5.1)

Total rental income investment property		40.1	(5.8)	(0.5)	33.8	(27.2)	6.6
Great Northern3		6.4	(0.3)	(0.4)	5.7	(4.0)	1.7

Total wholly owned rental income	4a	46.5	(6.1)	(0.9)	39.5	(31.2)	8.3

Total	2a	120.8	(22.3)	(3.6)	94.9	(68.6)	26.3

Associates and joint ventures were all held within the United Kingdom and Jersey.

1	The Group's average share during the year.
2	Others include the share of results for Xscape Milton Keynes and Xscape Castleford up to the date of sale on 23 February 2007.
3	Great Northern is carried as a trading property in the balance sheet.

3 Segmental analysis: statutory basis

3a Primary business segments

		Assets		Earnings
		Property	Property	Property
		investment	investment	management
		UK	Germany	UK	SNO!zone	Total
Year to 30 December 2008	Note	£m	£m	£m	£m	£m
Revenue from external sources	3b,4a	9.7	27.9	12.9	14.9	65.4
Transactions with other segments		0.9	-	0.4	-	1.3

Total segment revenue		10.6	27.9	13.3	14.9	66.7
Cost of sales	5	(25.7)	(2.6)	-	(13.4)	(41.7)
Transactions with other segments		(0.3)	-	(0.9)	(0.1)	(1.3)
Administrative costs *		(3.2)	(1.6)	(18.3)	-	(23.1)
Impairment of goodwill	14	-	-	(8.0)	-	(8.0)
Loss on sale of properties and investments		(6.1)	(0.4)	-	-	(6.5)
Loss on revaluation of investment properties	13a	(7.0)	(24.7)	-	-	(31.7)

Segment result		(31.7)	(1.4)	(13.9)	1.4	(45.6)
Share of loss in joint ventures and associates *		(420.5)	(12.4)	-	-	(432.9)
Net finance costs		(20.5)	(16.6)	(0.7)	-	(37.8)

(Loss)/profit before tax		(472.7)	(30.4)	(14.6)	1.4	(516.3)

Segment assets		134.2	-	15.5	3.6	153.3
Interest in joint ventures and associates						216.7
Tax assets - current tax						1.6
Tax assets - deferred tax						1.4

Consolidated total assets						373.0

Segment liabilities		(31.9)	-	(20.5)	(6.1)	(58.5)
Interest bearing liabilities						(112.5)
Tax liabilities						(15.9)

Consolidated total liabilities						(186.9)

Capital expenditure		0.4	0.2	0.2	0.2	1.0
Depreciation		-	-	0.2	0.4	0.6
Significant other non cash expenses		-	-	1.1	-	1.1

Aggregate investment in joint ventures and associates		176.8	39.9	-	-	216.7

* including deemed disposal from Mall rights issue and related costs as appropriate

3b Secondary business segments

		United
		Kingdom	Germany	Total
	Note	£m	£m	£m
Revenue	4a	37.5	27.9	65.4
Segment gross assets		153.3	-	153.3
Capital expenditure		0.8	0.2	1.0

3a Primary business segments

		Assets		Earnings
		Property	Property	Property
		investment	investment	management
		UK	Germany	UK	SNO!zone	Total
Year to 30 December 2007	Note	£m	£m	£m	£m	£m
Revenue from external sources	3b,4a	16.9	29.6	(26.8)	14.3	34.0
Transactions with other segments		1.0	-	1.1	-	2.1

Total segment revenue		17.9	29.6	(25.7)	14.3	36.1
Cost of sales	5	(2.2)	(4.7)	-	(12.2)	(19.1)
Transactions with other segments		(1.0)	-	(1.0)	(0.1)	(2.1)
Administrative costs		(5.6)	(0.9)	(7.2)	-	(13.7)
Profit on sale of properties and investments		1.8	-	-	-	1.8
(Loss)/gain on revaluation of investment properties	13a	(24.4)	9.6	-	-	(14.8)

Segment result		(13.5)	33.6	(33.9)	2.0	(11.8)
Share of loss in joint ventures and associates		(119.2)	-	-	-	(119.2)
Net finance costs		(21.6)	(14.4)	-	-	(36.0)

(Loss)/profit before tax		(154.3)	19.2	(33.9)	2.0	(167.0)

Segment assets		323.6	510.0	28.8	5.8	868.2
Interest in joint ventures and associates						611.4
Tax assets						1.6

Consolidated total assets						1,481.2

Segment liabilities		(21.0)	(24.2)	(68.8)	(5.9)	(119.9)
Interest bearing liabilities						(622.4)
Tax liabilities						(35.9)

Consolidated total liabilities						(778.2)

Capital expenditure		86.2	63.0	0.1	0.8	150.1
Depreciation		0.1	-	0.2	0.3	0.6
Significant other non cash expenses		-	-	(10.3)	-	(10.3)

Aggregate investment in joint ventures and associates		611.4	-	-	-	611.4

3b Secondary business segments
		United
		Kingdom	Germany	Total
	Note	£m	£m	£m
Revenue	4a	4.4	29.6	34.0
Segment gross assets		358.2	510.0	868.2
Capital expenditure		87.1	63.0	150.1

4a Revenue

		Year to	Year to
		30 December	30 December
		2008	2007
		Total	Total
	Note	£m	£m
Assets business
Property investment - gross rents from wholly owned investment property	2b	31.0	40.1
Property investment - gross rents from wholly owned trading property	2b	6.6	6.4

Property investment -gross rents from wholly owned property	2b	37.6	46.5
Earnings business
Property management - management fees	2a	22.8	26.0
SNO!zone income	2a	14.9	14.3

Rents, management fees and other revenue		75.3	86.8
Property management - performance fee clawback	2a,4b	(9.9)	(52.8)

Revenue per consolidated income statement	3a,3b	65.4	34.0
Finance income	6	2.4	3.5

Total revenue		67.8	37.5

4b Performance fees

		Year to	Year to
		30 December	30 December
		2008	2007
		Total	Total
	Note	£m	£m
Property manager future repayment of performance fees		(9.9)	(54.2)
Fund manager future repayment of performance fees		(2.5)	(17.8)

Total performance fees included in associates adjusted accounts	18d	(12.4)	(72.0)
Property manager future repayment of performance fees to others		-	1.4

Total future repayment of performance fees		(12.4)	(70.6)

Group share of future estimated repayments of performance fees
Property manager future repayment of performance fees		(9.9)	(54.2)
Property manager future repayment of performance fees to others		-	1.4

Total Group share of future repayment of performance fees	4a	(9.9)	(52.8)

The overall effect of the repayment of performance fees is reduced as a result of the Group's share as an investor in the funds and a reduction in management incentive payments. Further disclosure relating to performance fees can be found in the financial review. All items in the current year relate to the X-Leisure fund.

5 Cost of sales

		Year to	Year to
		30 December	30 December
		2008	2007
	Note	£m	£m
Property and void costs		4.8	6.9
SNO!zone expenses	2a	13.4	12.2
Impairment of trading property	2a, 13a	23.5	-

Total cost of sales		41.7	19.1

6 Finance income

		Year to	Year to
		30 December	30 December
		2008	2007
	Note	£m	£m
Interest receivable		2.1	2.7
Foreign exchange gain on loans to German portfolio		0.2	0.8
Gain in fair value of financial instruments - unhedged element of forward contracts		0.1	-

Total finance income	4a	2.4	3.5

The analysis of finance income by category of financial assets and liabilities is as follows:

	Year to	Year to
	30 December	30 December
	2008	2007
	£m	£m
Derivatives in effective hedges	0.1	-
Fair value at profit or loss held for trading	(0.7)	-
Amortised cost	0.2	0.8
Loans and receivables	2.8	2.7

Total finance income	2.4	3.5

7 Finance costs

		Year to	Year to
		30 December	30 December
		2008	2007
	Note	£m	£m
Interest on bank loans and overdrafts		27.4	31.4
Interest receivable on swaps		(3.2)	(0.4)
Interest on other loans		-	0.4

Interest payable		24.2	31.4
Amortisation of loan issue costs		0.7	0.8
Unwinding of discounting of CAP awards		0.7	2.0
Share of income attributable to German minority interest classified as a liability	22	(0.3)	1.9
Other interest payable		1.7	1.9
Loss in fair value of financial instruments - interest rate swaps		12.7	1.6
Loss in fair value of financial instruments - forward contracts		0.5	-
Fair value gain on interest rate swaps transferred from equity		-	(0.1)

Total finance costs		40.2	39.5

The analysis of finance costs by category of financial assets and liabilities is as follows:

	Year to	Year to
	30 December	30 December
	2008	2007
	£m	£m
Derivatives in effective hedges	0.5	-
Fair value through profit or loss held for trading	9.5	1.1
Amortised cost	30.2	38.4

Total finance costs	40.2	39.5

8 Loss before tax

		Year to	Year to
		30 December	30 December
		2008	2007
	Note	£m	£m
This is arrived at after charging/(crediting):
Depreciation of owned assets		0.6	0.5
Depreciation of owner occupied property		-	0.1
Net exchange gains		(0.2)	(2.0)
Loss on revaluation of investment properties	13a	31.7	14.8
Impairment of trade receivables		0.5	0.4
Staff costs	9	19.1	7.8
Auditors' remuneration (see below)		0.6	0.6

Auditors' remuneration

Fees payable to the Company's auditors for the audit of the Company annual accounts	0.2	0.2
Fees payable to the Company's auditors and their associates for other services to the Group
- The audit of the Company's subsidiaries and joint ventures pursuant to legislation	0.1	0.3

Total audit fees	0.3	0.5
Non-audit fees (see below)	0.3	0.1

Total fees paid to auditors	0.6	0.6

Included in non-audit fees are amounts for services supplied pursuant to legislation of £76,000 (2007: £60,000), services relating to tax of £19,000 (2007: £13,000) and other corporate services of £200,000 (2007: £nil). Fees payable to Deloitte LLP and their associates for non-audit services to the Company are not required to be disclosed because the consolidated financial statements are required to disclose such fees on a consolidated basis.

9 Staff costs, including directors

All remuneration is paid by either Capital & Regional Property Management Limited (a subsidiary company of Capital and Regional plc) or the SNO!zone companies.

		Year to	Year to
		30 December	30 December
		2008	2007
	Note	£m	£m
Salaries		16.4	15.4
Ex-gratia payments		1.7	0.3
Discretionary bonuses		0.5	0.5
Capital Appreciation Plan1		(2.5)	(9.3)
Share-based payments	26	1.2	0.2

		17.3	7.1

Social security		1.7	0.6
Other pension costs		0.1	0.1

		19.1	7.8

1	The credit against the Capital Appreciation Plan relates to the effect of the clawback of performance fees

Except for the directors, Capital & Regional plc has no employees. The costs of the directors are borne by CRPM and shown in the Directors' Remuneration Report.

Staff numbers

The monthly average number of persons, including directors, employed by the Group during the year was as follows:

	2008	2007
	Number	Number
Central management	170	183
SNO!zone	286	300

Total staff numbers	456	483

10 Tax

10a Tax credit

	Year to	Year to
	30 December	30 December
	2008	2007
	£m	£m
Current tax credit
UK corporation tax	-	0.1
Adjustments in respect of prior years	(1.8)	(4.0)
Foreign tax	0.7	-

Total current tax	(1.1)	(3.9)

Deferred tax (credit)/charge
Origination and reversal of temporary timing differences	(13.0)	6.9
Adjustments in respect of prior years	-	(3.2)

Total deferred tax	(13.0)	3.7

Total tax credit	(14.1)	(0.2)

10b Tax credit/(charge) reconciliation

	Year to	Year to
	30 December	30 December
	2008	2007
	£m	£m
Loss before tax	(516.3)	(167.0)

Loss multiplied by the UK corporation tax rate of 28% (2007: 30%)	(144.6)	(50.1)
Non-allowable expenses and non-taxable items	(161.4)	8.6
Utilisation of tax losses	14.7	(4.2)
Tax on revaluation gains	179.5	0.1
Unrealised gains on investment property not taxable	101.9	52.6
Temporary timing differences	(2.4)	-
Prior year adjustments	(1.8)	(7.2)

Total tax credit	(14.1)	(0.2)

10c Deferred tax movements

	Capital gains		Other
	net of capital	Capital	timing
	losses	allowances	differences	Total
	£m	£m	£m	£m
UK
As at 30 December 2007	(0.2)	7.0	2.8	9.6
Recognised in income	0.2	(2.9)	(8.3)	(11.0)

As at 30 December 2008	-	4.1	(5.5)	(1.4)

Germany
As at 30 December 2007	5.1	2.8	-	7.9
Recognised in income to date of disposal	(3.6)	1.5	-	(2.1)
Recognised on disposal	(1.5)	(4.3)	-	(5.8)

As at 30 December 2008	-	-	-	-

Total deferred tax at 30 December 2008	-	4.1	(5.5)	(1.4)

German deferred tax is now included in investments in joint ventures.

At the balance sheet date, the Group has unused tax losses of £100.7 million (2007: £47.5 million) available for offset against certain future profits.

Unused tax losses	30 December	30 December
	2008	2007
	£m	£m
United Kingdom	94.7	42.1
Overseas	6.0	5.4

Total unused tax losses	100.7	47.5

A deferred tax asset has been recognised in respect of £5.0 million (2007: £nil) of such losses. The remaining tax losses have not been recognised due to there being insufficient probability that future taxable profit will arise in the relevant loss-making companies, or for other reasons restricting the losses.

The UK Government announced a reduction in the mainstream corporation tax rate from 30% to 28%, effective from 1 April 2008. The German Government announced a reduction in the corporate income tax rate from 26.375% to 15.825%, effective from 1 January 2008. Consequently, the rate at which deferred tax is provided on UK deferred tax items is now 28% and the rate provided on German deferred tax items is 15.825%.

The calculation of the Group's tax charge necessarily involves a degree of estimation and judgement in respect of certain items whose tax treatment cannot be finally determined until a formal resolution has been reached with the relevant tax authorities. The Group has provided for tax of £15.9 million (2007: £15.9 million) plus accrued interest of £3.6 million (2007: £2.4 million) in respect of potential tax liabilities on capital gains on the sales of certain properties in 2004 and 2005. The tax treatment of similar transactions by another taxpayer has been the subject of ongoing litigation. In the latest decision on 12 March 2009 the Court of Appeal found against the taxpayer and denied the taxpayer leave to appeal to the House of Lords. The taxpayer has sought leave to appeal direct to the House of Lords and the outcome of this request should be known in the next couple of months. If the House of Lords agrees to hear the appeal the final decision is unlikely to be known before the end of 2010. These provisions are treated as amounts payable in less than one year irrespective of when formal resolution is expected. The ultimate outcome of this litigation is likely to have an important bearing on whether the Group will have to pay the tax provided and interest to the date of payment.

A significant part of the Group's property interests is held offshore. The Group has also undertaken a restructuring of its activities to separate legally its income and earnings businesses, in line with its business model. The Group has been advised that no capital gains tax liability arises on these transactions and that certain tax deductions and losses will be available following the restructuring, although the relevant computations have yet to be agreed.

11 Dividends

		Year to	Year to
		30 December	30 December
		2008	2007
	Note	£m	£m
Amounts recognised as distributions to equity holders in the year:
Final dividend for the year ended 30 December 2007 of 17p per share (2006: 17p per share)		11.9	12.1
Interim dividend for the year ended 30 December 2008 of 5p per share (2007: 10p per share)		3.5	7.0

	27	15.4	19.1
Proposed final dividend for the year ended 30 December 2008 of nil p per share (2007: 17p per share)		-	11.9

		15.4	31.0

12 Earnings per share

12a Earnings per share calculation

The European Public Real Estate Association ("EPRA") has issued recommended bases for the calculation of certain earnings per share information as shown in the following tables:

			Weighted average
		Earnings	number of shares	Pence
Year to 30 December 2008	Note	£m	(m)	per share
Weighted average number of shares			71.3
Own shares held			(1.0)

Basic and diluted		(502.2)	70.3	(715)p

Revaluation movements on investment properties, development properties and other investments	12b	375.9		535p
Loss on disposal of investment properties (net of tax)	12b	30.5		44p
Movement in fair value of financial instruments	12b	47.8		68p
Impairment of goodwill		8.0		11p
Deferred tax credit		(14.1)		(20)p

EPRA diluted		(54.1)		(77)p
Performance fee clawback (net of back charge and management incentives)		5.1		7p

Adjusted EPRA diluted		(49.0)		(70)p

The Group has 637,257 share options that could potentially dilute basic earnings per share in the future, but have not been included in the calculation of diluted earnings per share because they are antidilutive for the period presented.

			Weighted average
		Earnings	number of shares	Pence
Year to 30 December 2007	Note	£m	(m)	per share
Weighted average number of shares			71.7
Own shares held			(0.9)

Basic and diluted		(166.8)	70.8	(236)p

Revaluation movements on investment properties, development properties and other investments	12b	164.4		232p
Profit on disposal of investment properties (net of tax)	12b	(1.1)		(1)p
Movement in fair value of financial instruments	12b	7.0		10p
Deferred tax credit		(3.0)		(4)p

EPRA diluted		0.5		1p
Performance fee clawback (net of back charge and management incentives)		26.8		38p

Adjusted EPRA diluted		27.3		39p

The Group had 439,970 share options that could potentially have diluted basic earnings per share in the future, but were not included in the calculation of diluted earnings per share for 2007 because they were antidilutive for the period presented.

12b Reconciliation of earnings figures included in EPS calculation to the income statement

		Year to 30 December 2008			Year to 30 December 2007
				Movement			Movement
		Revaluation		in fair value			in fair value
		movements	Loss on	of financial	Revaluation	(Loss)/profit	of financial
		and provisions	disposal	instruments	movements	on disposal	instruments
	Note	£m	£m	£m	£m	£m	£m
Share of loss of associates	18d	(325.6)	(29.6)	(27.5)	(146.5)	(2.7)	(5.1)
Share of loss of joint ventures	18e	(18.6)	(6.2)	(7.2)	(3.1)	2.4	(0.3)
Wholly owned		(31.7)	(6.5)	(13.1)	(14.8)	1.8	(1.6)
Tax effect		-	11.8	-	-	(0.4)	-

Total per EPS calculation	12a	(375.9)	(30.5)	(47.8)	(164.4)	1.1	(7.0)

13 Property assets

13a Wholly-owned property assets

					Long
		Freehold	Leasehold	Sub-total	leasehold	Freehold
		investment	investment	investment	owner	trading	Total
		property	property	property	occupied	property	property
		assets	assets	assets	property	asset	assets
	Note	£m	£m	£m	£m	£m	£m
Cost or valuation
As at 31 December 2006		494.0	17.4	511.4	16.0	94.4	621.8
Exchange adjustments		38.4	-	38.4	-	-	38.4
Acquisitions		70.6	-	70.6	-	-	70.6
Additions		13.0	-	13.0	-	1.5	14.5
Properties acquired in business combinations		60.9	-	60.9	-	-	60.9
Depreciation		-	-	-	(0.1)	-	(0.1)
Disposals		(1.0)	-	(1.0)	-	-	(1.0)
Revaluation movement recognised in income	8	(14.1)	(0.7)	(14.8)	-	-	(14.8)
Revaluation movement recognised in equity	27	-	-	-	(0.3)	-	(0.3)

As at 30 December 2007		661.8	16.7	678.5	15.6	95.9	790.0
Exchange adjustments		27.2	-	27.2	-	-	27.2
Additions		0.2	-	0.2	-	0.4	0.6
Disposals and transfers		(664.3)	2.4	(661.9)	-	-	(661.9)
Impairment of trading properties	2a, 5	-	-	-	-	(23.5)	(23.5)
Revaluation movement recognised in income	3a, 8	(24.7)	(4.2)	(28.9)	(2.8)	-	(31.7)
Revaluation movement recognised in equity	27	-	-	-	(2.4)	-	(2.4)
Head leases treated as finance leases		-	0.2	0.2	0.4	-	0.6

As at 30 December 2008		0.2	15.1	15.3	10.8	72.8	98.9

The owner occupied building represents the Group's head office, which was independently valued at 30 December 2008. The historical cost of the owner occupied property, which is held on a long leasehold, is £12.9 million (2007: £12.9 million). At 30 December 2008 the gross carrying value of the owner occupied property is £10.8 million (2007: £15.6 million) net of accumulated depreciation of £0.6 million (2007: £0.6 million). The lease has more than 50 years remaining.

The Group has pledged land and buildings with a carrying amount of £98.7 million (2007: £787.5 million) to secure banking facilities granted to the Group. This includes amounts relating to trading properties of £72.8 million (2007: £95.9 million).

13b Property assets

		2008	2007
		Valuation	Valuation
	Note	£m	£m
Group properties at fair value		15.1	679.1
Plus: head leases treated as finance leases		0.2	-
Less: unamortised tenant incentives		-	(0.6)

Total investment properties held by the Group		15.3	678.5

Owner occupied property at fair value		10.4	15.6
Plus: head leases treated as finance leases		0.4	-
Trading property assets at the lower of cost and net realisable value		72.8	95.9

Total wholly owned property assets		98.9	790.0

Properties held by joint ventures at fair value		749.5	172.5
Plus: head leases treated as finance leases		3.4	3.3
Less: unamortised tenant incentives		(14.8)	(8.2)

Total investment properties held by joint ventures	18e	738.1	167.6

Properties held by associates at fair value	36	3,147.3	5,185.8
Plus: head leases treated as finance leases		138.2	124.9
Less: unamortised tenant incentives		(53.6)	(57.7)

Total investment properties held by associates	18d	3,231.9	5,253.0

External valuations at 30 December 2008 were carried out on £3,830.3 million (2007: £6,053.0 million) of the Group's property assets.

The valuations were carried out by independent qualified professional valuers working for DTZ Debenham Tie Leung, Chartered Surveyors, CB Richard Ellis Limited, Chartered Surveyors, Jones Lang LaSalle, Chartered Surveyors and King Sturge, Chartered Surveyors. These external valuers are not connected with the Group. The valuations, which conform to International Valuation Standards, were arrived at by reference to market evidence of transaction prices for similar properties.

Each valuer has made reference in their reports to Guidance Note 5 of those Standards, noting that there was a dearth of comparable transactional evidence in the weeks before the balance sheet date, and those transactions which had been proceeding were doing so at a further significant discount to previously established levels, leading to further volatility in all property markets. Since such 'abnormal' market conditions prevailed there is therefore likely to be a greater than usual degree of uncertainty in respect of the valuation figures quoted. Until the number and consistency of comparable transactions increases, this situation is likely to remain. Further discussion of this issue is set out in the Risks and Uncertainties section and in note 1.

Directors' valuations at 30 December 2008 were carried out on £166.0 million (2007: £0.2m) of the Group's property assets. The valuations were carried out by Ken Ford FRICS. The valuations were arrived at by reference to market evidence of transaction prices for similar properties. The properties held by FIX UK have not been valued as the Group's investment in FIX UK has been written down to £nil.

13c (Loss)/profit on sale of properties and investments

		Year to	Year to
		30 December	30 December
		2008	2007
	Note	£m	£m
Loss on part sale of FIX UK	32a	(10.1)	-
Loss on part sale of German portfolio	32b	(0.4)	-
Profit on sale of units in joint ventures and associates		-	2.6
Other write-downs, impairments and release of provisions		4.0	(0.8)

		(6.5)	1.8

The analysis of (loss)/profit on sale of properties and investments by category of financial assets and liabilities is as follows:

	Year to	Year to
	30 December	30 December
	2008	2007
	£m	£m
Amortised cost	1.8	(0.8)
Loans and receivables	1.5	-
Non-financial assets and liabilities	(9.8)	2.6

	(6.5)	1.8

14 Goodwill

		30 December	30 December
		2008	2007
	Note	£m	£m
At the start of the year		12.2	12.2
Provision for impairment	2a, 3a	(8.0)	-

At the end of the year		4.2	12.2

The goodwill carried in the Group balance sheet relates to the acquisition of the MWB fund management business by CRPM in 2003, which included MWB's 13.29% interest in Leisure Fund 1, 5.72% interest in Leisure Fund IIa and 7.09% interest in Leisure Fund IIb. This goodwill is tested annually for impairment or more frequently if there are indications that it might be impaired.

Impairment is tested by discounting the expected cash flows generated by the X-Leisure fund over the life of the property management contract, which is coterminous with the life of the fund. The expected life of the property management contract is assumed to be until 31 December 2018. Cash flows are adjusted to take into consideration the likely outcomes of the scenarios modelled. The calculations are particularly sensitive to the assumptions around forecast asset management fees. The rate used to discount the expected cash flows is 8.3%. Management fees receivable, as well as both fixed and variable administration costs, are assumed to grow by 2.4% per annum beyond the period modelled in the Group's forecasts. No account is taken of any future payment or clawback of performance fees.

15 Other non-current assets

15a Plant and equipment

	30 December	30 December
	2008	2007
	£m	£m
Cost or valuation
At the start of the year	3.9	3.1
Additions	0.4	0.9
Disposals	-	(0.1)

At the end of the year	4.3	3.9

Depreciation
At the start of the year	2.4	2.1
Provided for the year	0.6	0.5
Released on disposal	-	(0.2)

At the end of the year	3.0	2.4

Carrying amounts:
At the end of the year	1.3	1.5

15b Available for sale investments

		30 December	30 December
		2008	2007
	Note	£m	£m
Fair value
At the start of the year		0.3	0.2
(Decrease)/increase in fair value		(0.1)	0.2
Disposals		-	(0.1)

At the end of the year	24a	0.2	0.3

Available for sale investments comprise the following:

£235,000 (2007: £241,200) representing the net asset value of units in the Paddington Central III Unit Trust.
£10,000 (2007: £10,000) representing a 49.99% interest in Best Park Investments Limited, which is treated as an investment as the Group does not exercise any significant influence or control over the entity.

16 Non-current receivables

		30 December	30 December
		2008	2007
	Note	£m	£m
Financial assets
Loans to joint ventures	24a	29.1	6.1

		29.1	6.1
Non-financial assets
Prepayments		1.1	1.1

		30.2	7.2

Interest is payable on loans to joint ventures at normal commercial rates.

17 Current receivables

		30 December	30 December
		2008	2007
	Note	£m	£m
Financial assets
Trade receivables		0.7	3.3
Amounts owed by joint ventures		1.7	0.1
Amounts owed by associates		2.6	6.2
Other receivables		1.2	1.8
Accrued income		0.4	1.0
Financial assets carried at fair value through profit or loss - interest rate swaps		-	1.9

	24a	6.6	14.3
Non-financial assets
Tax and social security receivables		6.0	-
Prepayments		1.8	5.6

		14.4	19.9

The Group's trade receivables largely comprise amounts payable by tenants of the Group's wholly-owned properties. Before accepting a new tenant, a review of its creditworthiness is carried out using an external credit scoring system and other publicly-available financial information. Included in the Group's trade receivable balance are debtors with a carrying amount of £0.7 million (2007: £3.0 million) which are past due at the reporting date for which the Group has not provided, as there has not been a significant change in credit quality and the amounts are still considered recoverable. The Group holds collateral of £0.1 million (2007: £0.6 million) over these balances as security deposits held in rent accounts. The average age of these receivables is 34 days (2007: 36 days).

	30 December	30 December
	2008	2007
	£m	£m
Analysis of current financial assets
Not past due	0.6	8.7
Past due but not individually impaired:
Less than 1 month	4.2	1.0
1-3 months	0.5	1.0
3-6 months	-	0.4
Over 6 months	1.3	3.2

	6.6	14.3

18 Investment in associates and joint ventures

18a Share of results

		Year to	Year to
		30 December	30 December
		2008	2007
	Note	£m	£m
Associates		(368.4)	(118.1)
Dilution effect of Mall rights issue	2a	(26.2)	-

		(394.6)	(118.1)
Impairment of FIX UK		(8.6)	-
Joint ventures		(29.7)	(1.1)

		(432.9)	(119.2)

18b Investment in associates

		30 December	30 December
		2008	2007
	Note	£m	£m
At the start of the year		599.4	685.4
Investment in X-Leisure fund		-	53.9
Share of net assets in FIX UK retained by the Group		8.6	-
Share of results of FIX UK	2b	(0.2)	-
Impairment of FIX UK	2a	(8.4)	-
Share of results of other associates	18d	(394.6)	(118.1)
Dividends and capital distributions received		(22.5)	(21.8)

At the end of the year	18d	182.3	599.4

The Group's investments in associates include The Mall LP, The Junction LP, X-Leisure LP and The FIX UK LP. Despite the fact that the Group holds less than 20% in the Mall LP and X-Leisure LP, they are accounted for as associates as the Group has significant influence arising from its membership of the General Partner boards.

The FIX UK LP has been treated as an associate from 6 March 2008 which was the date of disposal of 80% of the Group's interest as described in note 32a. The Group exercises significant influence through its representation on the GP board. The Group has made a provision for impairment to write down the carrying value of its investment in The FIX UK LP to £nil, to take into account the estimated fall in property and interest rate swap valuations since the date of disposal as FIX UK did not obtain independent valuations at the balance sheet date. The unrecognised share of losses was estimated to be £2.9 million.

On 27 June 2008, The Mall Fund completed a £286 million rights issue. The Group did not take up its rights and as a consequence its share in the fund fell from 24.24% to 16.72%.

C&R accounting policy adjustments have been made in the current year and the prior year to correctly reflect the treatment of performance fees repayable by the Group to the funds. The results of The Mall LP have been adjusted in the current year to reflect the Group's share of performance fees repayable at its percentage interest before the dilutive effects of the rights issue described above and the results of The Mall LP, The Junction LP and X-Leisure LP were adjusted in the prior year to ensure consistency of accounting in relation to the estimated repayments of performance fees.

18c Investment in joint ventures

		30 December	30 December
		2008	2007
	Note	£m	£m
At the start of the year		12.0	67.6
Share of net assets in German portfolio retained by the Group		44.9	-
Net assets disposed of on sale of Xscape Milton Keynes and Xscape Castleford to X-Leisure Fund		-	(51.3)
Investment in joint ventures		8.5	3.3
Dividends and capital distributions receivable		(2.3)	(6.5)
Share of results	18e	(29.7)	(1.1)
Foreign exchange differences		1.0	-

At the end of the year	18e	34.4	12.0

The Group's investments in joint ventures include its remaining share in the German portfolio and its investments in Xscape Braehead Partnership, Capital Retail Park Partnership, Manchester Evening News Arena Complex Limited and The Auchinlea Partnership.

The Auchinlea Partnership held the Group's interest in Glasgow Fort. Since the sale of this interest in 2004 the Group has received a total of £8.3 million further profit from its remaining interest in the joint venture. Further profits are potentially receivable, largely dependent on planning consent being obtained for future phases of the development and the letting of units at above target rents. The Group has also given certain rental guarantees for a five year period and has made provision for the amounts which are expected to be paid in respect of these. The estimate of the Group's share of the fair value of the right to receive these future profits at 30 December 2008 is £0.1 million (2007: £0.2 million). The value reflects an assessment of the considerable uncertainty surrounding the receipt of further amounts and the fact that there is no ready market for such assets. In accordance with accounting standards, this right has been recognised as a financial asset.

18d Analysis of investment in associates

					Year to	Year to
					30 December	30 December
		The Mall	The Junction	X-Leisure	2008	2007
		LP	LP	LP	Total	Total
	Note	£m	£m	£m	£m	£m
Income statement (100%)
Revenue		170.8	50.4	53.6	274.8	170.8
Property expenses		(34.7)	(1.8)	(7.3)	(43.8)	(34.7)
Management expenses		(13.2)	(8.2)	(5.8)	(27.2)	(13.2)

Net rents		122.9	40.4	40.5	203.8	122.9
Net interest payable		(80.8)	(35.9)	(29.7)	(146.4)	(80.8)

Contribution		42.1	4.5	10.8	57.4	42.1
Performance fees	4b	-	-	12.4	12.4	-
C&R accounting policy adjustment		-	-	-	-	-
Loss on revaluation of investment properties		(987.8)	(288.3)	(244.4)	(1,520.5)	(987.8)
Loss on sale of investment properties		(84.5)	(56.7)	-	(141.2)	(84.5)
Provision for onerous contract		-	-	(10.3)	(10.3)	-
Fair value of interest rate swaps		(91.5)	(40.6)	(23.0)	(155.1)	(91.5)

Loss before tax		(1,121.7)	(381.1)	(254.5)	(1,757.3)	(1,121.7)

Tax		-	(0.6)	-	(0.6)	-

Loss after tax		(1,121.7)	(381.7)	(254.5)	(1,757.9)	(1,121.7)

Balance sheet (100%)
Investment property	13b	1,800.3	711.5	720.1	3,231.9	1,800.3
Current assets		236.3	60.2	50.5	347.0	236.3
Current liabilities		(288.9)	(55.8)	(84.5)	(429.2)	(288.9)
Non-current liabilities		(1,242.2)	(504.6)	(485.1)	(2,231.9)	(1,242.2)

Net assets (100%)		505.5	211.3	201.0	917.8	505.5

Group interest at the end of the year		16.72%	27.32%	19.37%
Group interest at the start of the year		24.24%	27.32%	19.37%
Group average interest during the year		20.41%	27.32%	19.37%

Income statement (Group share)
Revenue	2b	35.4	13.8	10.4	59.6	35.4
Net rents	2b	25.5	11.1	7.8	44.4	25.5
Net interest payable	2b	(16.8)	(9.9)	(5.7)	(32.4)	(16.8)

Contribution	2b	8.7	1.2	2.1	12.0	8.7
Performance fees	2a	-	-	2.4	2.4	-
C&R accounting policy adjustment	2a	-	-	-	-	-
Deemed disposal from Mall rights issue		(26.2)	-	-	(26.2)	(26.2)
Loss on revaluation of investment properties	12b	(196.5)	(79.7)	(47.4)	(323.6)	(196.5)
Loss on sale of investment properties	12b	(14.1)	(15.5)	-	(29.6)	(14.1)
Provision for onerous contract	12b	-	-	(2.0)	(2.0)	-
Fair value of interest rate swaps	12b	(11.9)	(11.1)	(4.5)	(27.5)	(11.9)

Loss before tax	18b	(240.0)	(105.1)	(49.4)	(394.5)	(240.0)

Tax		-	(0.1)	-	(0.1)	-

Loss after tax		(240.0)	(105.2)	(49.4)	(394.6)	(240.0)

Balance sheet (Group share)
Investment property		301.0	194.4	139.5	634.9	301.0
Current assets		39.5	16.4	9.8	65.7	39.5
Current liabilities		(48.3)	(15.2)	(16.4)	(79.9)	(48.3)
Non-current liabilities		(207.7)	(137.9)	(94.0)	(439.6)	(207.7)

Associate net assets		84.5	57.7	38.9	181.1	84.5
C&R accounting policy adjustment		1.2	-	-	1.2	1.2

Net assets (Group share)	18b	85.7	57.7	38.9	182.3	85.7

18e Analysis of investment in joint ventures

				Year to	Year to
				30 December	30 December
		German		2008	2007
		portfolio	Others	Total	Total
	Note	£m	£m	£m	£m
Income statement (100%)
Revenue		9.5	10.2	19.7	10.8
Property expenses		(0.9)	(1.8)	(2.7)	(2.5)
Management expenses		(0.3)	(0.4)	(0.7)	(0.3)

Net rents		8.3	8.0	16.3	8.0
Net interest payable		(3.6)	(8.8)	(12.4)	(7.6)

Contribution		4.7	(0.8)	3.9	0.4
Loss on revaluation of investment properties		(18.7)	(22.7)	(41.4)	(8.1)
Loss on sale of investment properties and investments		(1.0)	(11.5)	(12.5)	-
Income and fair value movements on financial assets		-	(0.2)	(0.2)	4.8
Loss on fair value of interest rate swaps		(10.0)	(5.3)	(15.3)	(0.7)

Loss before tax		(25.0)	(40.5)	(65.5)	(3.6)

Tax		1.6	-	1.6	-

Loss after tax		(23.4)	(40.5)	(63.9)	(3.6)

Balance sheet (100%)
Investment property	13b	594.8	143.3	738.1	167.6
Current assets		13.7	33.3	47.0	27.5
Other financial assets		-	0.2	0.2	0.4
Current liabilities		(27.9)	(34.3)	(62.2)	(23.1)
Non-current liabilities		(500.8)	(150.3)	(651.1)	(140.9)

Net assets (100%)		79.8	(7.8)	72.0	31.5

Group interest at the end of the year		50.00% *	30%-50%
Group interest at the start of the year		0.00%	30%-50%
Group average interest during the year		50.00% *	30%-50%

Income statement (Group share)
Revenue	2b	4.7	4.0	8.7	4.5
Net rents	2b	4.1	3.1	7.2	3.1
Net interest payable	2b	(1.7)	(3.8)	(5.5)	(3.2)

Contribution	2b	2.4	(0.7)	1.7	(0.1)
Loss on revaluation of investment properties	12b	(9.3)	(9.3)	(18.6)	(3.1)
Loss on sale of investment properties and investments	12b	(0.5)	(5.7)	(6.2)	-
Income and movement in fair value of financial assets		-	(0.1)	(0.1)	2.4
Loss on fair value of interest rate swaps	12b	(5.0)	(2.2)	(7.2)	(0.3)

Loss before tax		(12.4)	(18.0)	(30.4)	(1.1)

Tax		0.7	-	0.7	-

Loss after tax		(11.7)	(18.0)	(29.7)	(1.1)

Balance sheet (Group share)
Investment property		297.4	60.2	357.6	70.3
Current assets		6.9	15.4	22.3	12.9
Other financial assets		-	0.1	0.1	0.2
Current liabilities		(14.0)	(15.5)	(29.5)	(10.5)
Non-current liabilities		(250.4)	(65.6)	(316.0)	(60.9)

Net assets (Group share)	18c	39.9	(5.5)	34.4	12.0

* after minority interests included in liabilities

19 Cash and cash equivalents

		30 December	30 December
		2008	2007
	Note	£m	£m
Cash at bank		4.0	36.5
Security deposits held in rent accounts		0.1	0.6

	24a	4.1	37.1

Analysis by currency		30 December	30 December
		2008	2007
		£m	£m
Sterling		3.7	22.0
Euro		0.4	15.1

		4.1	37.1

20 Current payables

	30 December	30 December
	2008	2007
	£m	£m
Financial liabilities
Trade payables	1.0	3.6
Accruals	7.4	27.7
Payable to associates	15.3	42.3
Financial liabilities carried at fair value through profit or loss - interest rate swaps	7.6	-
Financial liabilities carried at fair value through profit or loss - forward contracts	14.2	-
Other payables	5.9	14.9

	51.4	88.5
Non-financial liabilities
Deferred income	3.5	4.9
Other taxation and social security	0.8	8.8

	55.7	102.2

The average age of trade payables is 38 days (2007: 114 days).

21 Non-current payables

		30 December	30 December
		2008	2007
	Note	£m	£m
Financial liabilities
Accruals		-	2.5
Finance leases		0.6	-
Minority interest classified as a liability	22	-	13.0

	24a, 24e	0.6	15.5
Non-financial liabilities
Other payables		2.2	2.0

		2.8	17.5

22 Minority interest classified as a liability

The minority interest, arising from the Group's German operations, is classified as a liability. Under the terms of the contract the minority has a put option to sell their share back to the other investors in the portfolio typically after 5 years from acquisition. The Group's share of the liability representing these minority interests is now included in its investment in joint ventures following the part-disposal of its German investment property portfolio described in note 32b.

		30 December	30 December
		2008	2007
	Note	£m	£m
At the start of the year at closing rate		13.0	10.1
Exchange movement		0.8	(0.8)

At the start of the year		13.8	9.3
Financing income	7	(0.3)	1.9
Dividend received by minority interests		(1.3)	(1.4)
Arising on acquisition		-	3.2
Reduction resulting from part-disposal of German portfolio	32b	(12.2)	-

At the end of the year	21	-	13.0

23 Borrowings

23a Borrowings summary

The Group generally borrows on an unsecured basis on the strength of its covenant to maintain operational flexibility. Borrowings are arranged to ensure an appropriate maturity profile and to maintain short term liquidity. Short, medium and long term funding is raised principally through syndicated revolving credit facilities from a range of banks and financial institutions. There were no defaults or other breaches of financial covenants under any of the loans during the current year or the preceding year.

		30 December	30 December
		2008	2007
	Note	£m	£m
Unsecured borrowing at amortised cost
Fixed and swapped bank loans		27.4	60.8

Secured borrowing at amortised cost
Fixed and swapped bank loans		77.0	522.6
Variable rate bank loans		8.2	41.4

Total borrowings before costs	24f	112.6	624.8
Less unamortised issue costs		(0.1)	(2.2)

Total borrowings after costs		112.5	622.6

Analysis of total borrowings after costs
Current	24a	18.7	0.2
Non-current	24a	93.8	622.4

Total borrowings after costs		112.5	622.6

Security for secured borrowings as at 30 December 2008 is provided by charges on property of £98.7 million (2007: £787.5 million) as described in note 13a and guarantees by the Company.

23b Maturity

	30 December	30 December
	2008	2007
	£m	£m
After five years	-	159.8
From two to five years	27.4	444.6
From one to two years	66.5	20.2

Due after more than one year	93.9	624.6
Current	18.7	0.2

	112.6	624.8

23c Undrawn committed facilities

	30 December	30 December
	2008	2007
	£m	£m
Expiring after more than two years	98.2	135.2

The undrawn amount represents the balance on the Group's central revolving credit facility, though as described in note 24e, based on current covenants only a further £73.7 million (2007: £135.2 million) was actually available for drawdown at year end. The Articles of the Company also restrict borrowing to 250% of net assets but at year end this did not limit the amount available for drawdown on the facility.

23d Interest rate and currency profile

		Weighted	Fixed and	Floating	30 December
		average length	swapped rate	rate	2008
	Fixed	of fix	borrowings	borrowings	Total
2008	%	Years	£m	£m	£m
Sterling	93%	2	104.4	8.2	112.6

		Weighted	Fixed and	Floating	30 December
		average length	swapped rate	rate	2007
	Fixed	of fix	borrowings	borrowings	Total
2007	%	Years	£m	£m	£m
Sterling	85%	2	228.3	41.4	269.7
Euro	100%	5	355.1	-	355.1

	94%	4	583.4	41.4	624.8

23e Rates at which interest is charged on borrowings

		30 December	30 December
		2008	2007
	Note	£m	£m
Fixed or swapped rates
Up to 5%		-	213.4
5% to 6%		-	277.7
6% to 7%		104.4	92.3

	24e	104.4	583.4
Floating rates	24e	8.2	41.4

	24a	112.6	624.8

Floating rate borrowings bear interest based on three month LIBOR.

24 Financial instruments

24a Overview

Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the returns to shareholders through the optimisation of the debt and equity balance. The Group is not subject to externally imposed capital requirements. The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 23a, cash and cash equivalents as disclosed in note 19, and equity attributable to equity holders of the parent, comprising issued share capital, reserves and retained earnings disclosed in notes 25 and 27.

Gearing ratio

The Board reviews the capital structure on an annual basis but does not set specific targets for the Group's gearing ratios. The overall strategy in 2008 has been to reduce the Group's levels of balance sheet debt and so the gearing ratios at the year end were as follows:

		30 December	30 December
		2008	2007
Statutory	Note	£m	£m
Debt1	23a	112.6	624.8
Cash and cash equivalents	19	(4.1)	(37.1)

Net debt		108.5	587.7
Equity2		186.1	703.0
Debt to equity ratio		60%	89%
Net debt to equity ratio		58%	84%

		30 December	30 December
		2008	2007
See-through		£m	£m
Debt1		836.2	1,333.7
Cash and cash equivalents		(53.2)	(71.3)

Net debt		783.0	1,262.4
Equity2		186.1	703.0
Debt to equity ratio		449%	190%
Net debt to equity ratio		421%	180%

1	Before amortisation costs.
2	Equity includes all capital and reserves of the Group attributable to equity holders of the Company.

Significant accounting policies

Details of the significant accounting policies adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in the accounting policies in note 1.

Categories of financial assets/(liabilities)

		Derivatives in effective hedges	Fair value through profit or loss held for trading	Loans and receivables	Available for sale	Amortised cost	Total carrying value	Fair value
2008	Note	£m	£m	£m	£m	£m	£m	£m
Financial assets
Investments	15b	-	-	-	0.2	-	0.2	0.2
Non-current receivables	16	-	-	29.1	-	-	29.1	29.1
Current receivables	17	-	-	6.6	-	-	6.6	6.6
Cash and cash equivalents	19	-	-	4.1	-	-	4.1	4.1

		-	-	39.8	0.2	-	40.0	40.0
Financial liabilities
Current payables	20	(14.2)	(7.6)	-	-	(29.6)	(51.4)	(51.4)
Current borrowings	23a	-	-	-	-	(18.7)	(18.7)	(18.7)
Non-current payables	21	-	-	-	-	(0.6)	(0.6)	(0.6)
Non-current borrowings	23a	-	-	-	-	(93.8)	(93.8)	(93.8)

		(14.2)	(7.6)	-	-	(142.7)	(164.5)	(164.5)

		Derivatives in effective hedges	Fair value through profit or loss held for trading	Loans and receivables	Available for sale	Amortised cost	Total carrying value	Fair value
2007	Note	£m	£m	£m	£m	£m	£m	£m
Financial assets
Investments	15b	-	-	-	0.3	-	0.3	0.3
Non-current receivables	16	-	-	6.1	-	-	6.1	6.1
Current receivables	17	-	1.9	12.4	-	-	14.3	14.3
Cash and cash equivalents	19	-	-	37.1	-	-	37.1	37.1

		-	1.9	55.6	0.3	-	57.8	57.8
Financial liabilities
Current payables	20	-	-	-	-	(88.5)	(88.5)	(88.5)
Current borrowings	23a	-	-	-	-	(0.2)	(0.2)	(0.2)
Non-current payables	21	-	-	-	-	(15.5)	(15.5)	(15.5)
Non-current borrowings	23a	-	-	-	-	(622.4)	(622.4)	(620.4)

		-	-	-	-	(726.6)	(726.6)	(724.6)

Movements in finance income and finance costs by category of financial asset and financial liability are shown in notes 6 and 7 respectively.

Financial risk management objectives

Exposure to credit, interest rate and currency risks arise in the normal course of the Group's business. The Group seeks to minimise the effect of these risks by using derivative financial instruments to manage exposure to fluctuations in interest rates and foreign currency exchange rates. Such instruments are not employed for speculative purposes. The use of any derivatives is approved by the Board, which provides guidelines on the acceptable levels of interest rate risk, credit risk, foreign exchange risk and liquidity risk, and the ranges of hedging required against these risks.

24b Interest rate risk

The Group normally raises bank debt on a floating rate basis and fixes a substantial portion of the interest payments by entering into interest rate swaps. The Group's objective in managing its interest rate risk is to ensure that it always maintains sufficient headroom to cover interest payments from anticipated cash flows and management regularly reviews the ratio of fixed to floating rate debt to assist this process. The Group is exposed to fair value risk from its fixed rate debt and interest rate risk from its floating rate debt, loans to joint ventures, cash and the tax provision disclosed in note 10. The Group does not hedge account its interest rate swaps and states them at fair value with changes in fair value included in the income statement.

The following table shows the notional principals and remaining terms of the Group's interest rate swap contracts outstanding:

	Average contract fixed rate		Notional principal amount		Fair value
	30 December	30 December	30 December	30 December	30 December	30 December
	2008	2007	2008	2007	2008	2007
	%	%	£m	£m	£m	£m
Less than 1 year	6.27	5.36	10.5	119.0	(0.3)	1.2
1 to 2 years	6.51	-	109.0	-	(6.0)	-
2 to 5 years	6.28	5.32	25.0	288.0	(1.3)	2.6
Greater than 5 years	-	6.12	-	52.6	-	(0.4)

			144.5	459.6	(7.6)	3.4

Interest rate risk sensitivity analysis is determined by applying a change in interest rates to financial assets and financial liabilities at the balance sheet date. In order to be representative of the Group's exposure to interest risk, financial liabilities include interest rate swaps held in associates and joint ventures. For floating rate liabilities, the analysis is prepared assuming the amount of liability outstanding at the balance sheet date was outstanding for the whole year. An increase/decrease of 1% in LIBOR would have decreased/increased the Group's annual loss before tax by £20.1 million (2007: £27.0 million) with no impact on other equity reserves (2007: £nil). The Group's sensitivity to interest rates has decreased during the current year following the part disposals of FIX UK and the German portfolio, which reduced the Group's exposure to floating rate loans and interest rate swaps.

24c Credit risk

The Group's principal financial assets are bank and cash balances, short term deposits, trade and other receivables and investments. Credit risk, being the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group, is primarily attributable to its trade and other receivables, which are principally amounts due from its associates and joint ventures. As a result there is a concentration of credit risk arising from the Group's exposure to these funds but the Group does not consider this risk to be material as it is mitigated by the significant influence that the Group is able to exercise through its holdings in the funds and membership of the General Partner boards.

The credit risk on short term deposits and derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies. The Group is not exposed to significant credit risk on its other financial assets.

24d Foreign exchange risk

The Group has investments in and loans to a number of joint ventures with property investments in Germany which have the Euro as their functional currency, and is therefore exposed to exchange rate fluctuations. The Group has designated two forward contracts as a hedge of its net investment in these German joint ventures. Since the year end, the Group has entered further forward contracts as disclosed in note 36.

The net position of the contracts is for the sale of €57.5 million (2007: sale of €115.0 million) at a fixed exchange rate of 0.7259. In 2008 the ineffective portion of the hedge resulted in a charge of £0.5 million (2007: charge of £1.5 million) to the income statement.

Only the spot element of the forward contracts is designated as the hedging instrument, determined as the undiscounted difference between the spot rate on the trade date and the spot rate on the revaluation date applied to the notional. The unhedged forward element of the fair value is determined as the total fair value less the spot element. Changes in the forward element of the fair value are reported through the income statement as finance income or finance costs as appropriate. During the year, this change in the unhedged element of the fair value was a gain of £0.1 million (2007: £nil) as disclosed in note 6.

Foreign currency risk sensitivity analysis is determined by applying a change in foreign currency rates to outstanding foreign currency denominated items at the reporting date. The following table details the Group's sensitivity to a 10% change in foreign currency rates, where a positive number indicates a decrease in loss before tax or increase in other equity reserves. The Group's sensitivity to foreign currency has decreased during the current year following the part-disposal of the German portfolio.

	Year to	Year to
	30 December	30 December
	2008	2007
	£m	£m
10% strengthening in Sterling against the Euro
Decrease/(increase) in loss before tax	0.6	6.2
Increase/(decrease) in other equity reserves	3.3	34.6
10% strengthening in the Euro against Sterling
Increase/(decrease) in loss before tax	(0.7)	(5.7)
Decrease/(increase)in other equity reserves	(3.1)	(42.3)

24e Liquidity risk

Liquidity risk reflects the risk that the Group will have insufficient resources to meet its financial liabilities as they fall due. The day-to-day operations of the Group are largely funded through the items included in the breakdown of recurring profit included in note 2. The majority of income within recurring profit is received quarterly, since the inflows and outflows from net rental income and net interest payable generally coincide with English quarter days, and property management fees are billed to the funds quarterly. As a result, the Group normally has sufficient funds to cover recurring administrative expenses which occur throughout the year.

Liquidity risk therefore arises principally from the need to make payments for non-recurring items, which may include performance fee clawbacks, management incentive schemes, and the close out of derivative financial instruments. Payments may also be necessary against bank debt facilities to prevent covenant breaches on loans related to the Group's wholly owned properties or to cover losses in the Group's joint ventures, or to repay loans when they fall due.

The Group's objective in managing liquidity risk is to ensure that it has sufficient funds to meet all its potential liabilities as they fall due, both in normal market conditions and when considering negative projections against expected outcomes, so as to avoid the risk of incurring contractual penalties or damaging the Group's reputation. The Group's treasury department maintains a rolling two-year forecast of anticipated recurring and non-recurring cash flows under different scenarios. This is compared to the forecast amounts available for drawdown on the Group's core revolving credit facility to ensure that any potential shortfalls in funding are identified and managed.

The Group's primary means of managing liquidity risk is this £125.5 million (2007: £175.5 million) core revolving credit facility, expiring on 10 February 2011, of which £98.2 million (2007: £135.2 million) was undrawn at the end of the year as shown in note 23c. As at the balance sheet date, however, only £73.7 million (2007: £135.2 million) of this undrawn amount was actually available for drawdown because of the restrictions of the asset cover covenant under the facility.

During the year, the terms of this facility were renegotiated to relax certain covenants and hence provide more flexibility to the Group when managing its liquidity risk. The terms of this facility are being further renegotiated as at the date of this report as mentioned in note 1.

The following table shows the maturity analysis of non-derivative financial (assets)/liabilities at the balance sheet date and, where applicable, their effective interest rates.

		Effective interest rate	Less than 1 year	1-2 years	2-5 years	5+ years	Total
2008	Note	%	£m	£m	£m	£m	£m
Financial assets
Available for sale investments	15b		(0.2)	-	-	-	(0.2)
Non-current receivables	16	5.84	-	-	(12.1)	(17.0)	(29.1)
Current receivables	17		(6.6)	-	-	-	(6.6)
Cash and cash equivalents	19		(4.1)	-	-	-	(4.1)

			(10.9)	-	(12.1)	(17.0)	(40.0)
Financial liabilities
Borrowings - fixed and swapped bank loans	23e	6.40	10.5	66.5	27.4	-	104.4
Borrowings - variable rate bank loans	23e	7.14	8.2	-	-	-	8.2
Current payables			29.6	-	-	-	29.6
Non-current payables	21		-	-	-	0.6	0.6

			48.3	66.5	27.4	0.6	142.8

		Effective interest rate	Less than 1 year	1-2 years	2-5 years	5+ years	Total
2007	Note	%	£m	£m	£m	£m	£m
Financial assets
Available for sale investments	15b		(0.3)	-	-	-	(0.3)
Non-current receivables	16	6.00	-	-	(6.1)	-	(6.1)
Current receivables	17		(14.3)	-	-	-	(14.3)
Cash and cash equivalents	19		(37.1)	-	-	-	(37.1)

			(51.7)	-	(6.1)	-	(57.8)
Financial liabilities
Fixed and swapped bank loans	23e	4.76	-	12.0	444.6	126.8	583.4
Variable rate bank loans	23e	5.94	0.2	8.2	-	33.0	41.4
Current payables			88.5	-	-	-	88.5
Non-current payables	21		-	15.5	-	-	15.5

			88.7	35.7	444.6	159.8	728.8

The following table indicates the dates of contractual repricing of the Group's fixed and swapped bank loans:

		Total	Less than 1 year	1-2 years	2-5 years	5+ years
Fixed and swapped bank loans	Note	£m	£m	£m	£m	£m
2008	23e	104.4	10.5	66.5	27.4	-
2007	23e	583.4	-	12.0	444.6	126.8

The bank loans, except for £27.4 million (2007: £60.8 million) drawn on the core revolving credit facility, are secured on specific properties owned by the Group.

The following tables detail the Group's remaining contractual maturity for its non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash inflows/(outflows) of financial liabilities based on the earliest date on which the Group can be required to pay, including both interest and principal cash flows.

	Less than 1 year	1-2 years	2-3 years	3-4 years	4-5 years	5+ years	Total
2008	£m	£m	£m	£m	£m	£m	£m
Non-interest bearing	(29.6)	-	-	-	-	-	(29.6)
Finance lease liability	-	-	-	-	-	(0.6)	(0.6)
Variable interest rate instruments	(22.5)	(69.5)	(27.6)	-	-	-	(119.6)

	(52.1)	(69.5)	(27.6)	-	-	(0.6)	(149.8)

	Less than 1 year	1-2 years	2-3 years	3-4 years	4-5 years	5+ years	Total
2007	£m	£m	£m	£m	£m	£m	£m
Non-interest bearing	(88.5)	-	-	-	-	-	(88.5)
Variable interest rate instruments	(30.7)	(49.7)	(202.6)	(141.8)	(63.0)	(134.6)	(622.4)
Fixed interest rate instruments	(6.3)	(6.3)	(80.3)	(20.5)	(1.6)	(36.6)	(151.6)

	(125.5)	(56.0)	(282.9)	(162.3)	(64.6)	(171.2)	(862.5)

The following tables detail the Group's remaining contractual maturity for its derivative financial liabilities, all of which are net settled, based on the undiscounted net cash inflows/(outflows). When the amount payable or receivable is not fixed, it has been determined by reference to the projected interest and foreign currency rates as illustrated by the yield curves existing at the reporting date.

	Less than 1 year	1-2 years	2-3 years	3-4 years	4-5 years	5+ years	Total
2008	£m	£m	£m	£m	£m	£m	£m
Net settled
Interest rate swaps	(4.1)	(3.4)	(0.1)	-	-	-	(7.6)
Foreign exchange forward contracts	(14.2)	-	-	-	-	-	(14.2)

	(18.3)	(3.4)	(0.1)	-	-	-	(21.8)

	Less than 1 year	1-2 years	2-3 years	3-4 years	4-5 years	5+ years	Total
2007	£m	£m	£m	£m	£m	£m	£m
Net settled
Interest rate swaps	2.7	0.9	0.4	0.2	(0.1)	(0.1)	4.0
Foreign exchange forward contracts	-	2.4	-	-	-	-	2.4

	2.7	3.3	0.4	0.2	(0.1)	(0.1)	6.4

24f Fair values of financial instruments

The fair values of financial instruments together with their carrying amounts in the balance sheet are as follows:

		Notional	2008	2008	2007	2007
		Principal	Book value	Fair value	Book value	Fair value
	Note	£m	£m	£m	£m	£m
Financial liabilities not at fair value through income statement
Euro denominated fixed rate loans		-	-	-	129.0	124.6
Sterling denominated loans	23a	112.6	112.6	112.6	269.7	269.7
Euro denominated swaps		-	-	-	226.1	226.1

Total on balance sheet borrowings			112.6	112.6	624.8	620.4
Minority interest share of borrowings			-	-	(29.0)	(28.6)
Group share of associate borrowings*			441.0	441.0	683.1	683.1
Group share of joint venture borrowings			282.6	284.1	54.8	54.8

Total borrowings			836.2	837.7	1,333.7	1,329.7

Derivative assets/(liabilities) at fair value through income statement
Sterling interest rate swaps		144.5	(7.6)	(7.6)	0.2	0.2
Euro interest rate swaps		-	-	-	3.2	3.2
Forward contracts		55.6	(14.2)	(14.2)	(1.5)	(1.5)

Total on balance sheet derivatives			(21.8)	(21.8)	1.9	1.9
Group share of Sterling interest rate swaps in associates and joint ventures*		466.7	(27.1)	(27.1)	8.4	8.4
Group share of Euro interest rate swaps in joint ventures		146.0	(5.0)	(5.0)	-	-
Group share of Sterling basis swaps in associates		187.9	0.1	0.1	-	-

Total derivatives			(53.8)	(53.8)	10.3	10.3

* excluding FIX UK where the Group has written down its investment to £nil.

The fair value of borrowings has been estimated on the basis of quoted market prices. The fair value of the interest rate and basis swaps has been estimated by calculating the present value of future cash flows, using market discount rates. The fair value of the foreign exchange contract has been estimated by applying the quoted forward foreign exchange rate to the undiscounted cash flows at maturity.

Details of the Group's cash and deposits are set out in note 19. Their fair values and those of all other financial assets and liabilities equate to their book values.

25 Share capital

	Number of shares			Nominal value of shares
	issued and fully paid			issued and fully paid
	2008	2007		2008		2007
	Number	Number		£000		£000
Ordinary shares of 10p each
At the start of the year	71,048,963	72,388,723		7,105		7,239
Repurchase and cancellation of shares	-	(1,442,598)		-		(144)
Issued on exercise of share options	299,970	50,000		30		5
Issued on conversion of CULS	-	52,838		-		5

At the end of the year	71,348,933	71,048,963		7,135		7,105

			Authorised
			2008		2007
			Number		Number
Ordinary shares of 10p each			150,000,000		150,000,000

26 Share-based payments

The Group's share based payments comprise the SAYE scheme, the 1998 share option schemes, various LTIP schemes, the COIP and the Matching Share Agreement. In accordance with IFRS 2, the fair value of equity-settled share-based payments to employees is determined at the date of grant, calculated using either a Black-Scholes option pricing model or a Monte Carlo simulation, except for the 2005-2007 LTIPs which are calculated using a normal distribution model. Any Employers' National Insurance payable on these awards is treated as a cash-settled share-based payment. The total expense recognised under these share-based payment transactions in the year was as follows:

		Year to	Year to
		30 December	30 December
		2008	2007
	Note	£m	£m
Equity-settled share-based payment	9, 27	1.2	0.2
National Insurance on share-based payments		(0.1)	(0.6)

Share options - SAYE scheme

In November 2008, shareholders approved the introduction of a share option scheme open to all employees, who may save between £5 and £250 per month over a period of either 3 or 5 years in order to purchase Company shares at a price set at the date of grant. The first payments by employees into the scheme were made in January 2009 subject to a cap of £67 per month. Options are normally forfeited if an employee leaves the Group before they vest and the charge to the Income Statement assumes this lapse rate is 30%, based on historic staff turnover and future expectations. Details of the share options outstanding at the end of the year, none of which were exercisable, are as follows:

	Year to 30 December 2008
		Weighted
		average
	Number of	exercise
	share options	price
Granted during the year	497,257	46.0p

Outstanding at the end of the year	497,257	46.0p

In 2008, options were granted on 18 December 2008 with a total estimated fair value of £0.1 million. The options outstanding at 30 December 2008 had a weighted average remaining contractual life of 3.59 years.

Share options - 1998 schemes

Details of the share options outstanding at the end of the year are as follows:

	Year to 30 December 2008		Year to 30 December 2007
		Weighted		Weighted
	Number of	average	Number of	average
	share	exercise	share	exercise
	options	price	options	price
Outstanding at the start of the year	439,970	256.2p	489,970	251.6p
Exercised during the year	(299,970)	279.7p	(50,000)	211.5p

Outstanding at the end of the year	140,000	205.8p	439,970	256.2p

Exercisable at the end of the year	140,000	205.8p	439,970	256.2p

The weighted average share price at the date of exercise for share options exercised during the year was £4.45 (2007: £15.34). The options outstanding at 30 December 2008 had a weighted average remaining contractual life of 1.26 years (2007: 0.98 years) and a fair value of £2.06 (2007: £2.56) each.

2005-2007 Long-Term Incentive Plans

Details of the shares outstanding at the end of the year under these schemes are as follows:

	Number of shares
		Opening	Exercised	Cancelled	Lapsed	Closing
2005 awards		333,854	(139,805)	-	(194,049)	-
2006 awards		267,785	-	(10,930)	-	256,855
2007 awards		200,794	-	(8,713)	-	192,081

		802,433	(139,805)	(19,643)	(194,049)	448,936

The weighted average fair value of the above LTIP awards at grant was £13.06 (2007: £10.98).

In calculating the charge for these LTIP awards in the Income Statement the following key assumptions were used:

50% Total return, none of which will vest based on expected performance
50% Total shareholder return which was derived by using the normal distribution of performance relative to the FTSE Real Estate Index. Calculation inputs are shown in the following table:

	Probability	Vesting	Value
	%	%	%
1st quartile	11	-	-
2nd quartile	39	-	-
3rd quartile	39	0 - 50	12.0
4th quartile	11	50	5.0

Total			17.0

2008 Long-Term Incentive Plan

In November 2008, shareholders approved the introduction of a new LTIP for senior employees, details of which are described in the Directors' Remuneration Report. The first awards under this scheme will be made in 2009.

2008 Co-investment plan/Matching Share Agreement

In November 2008, shareholders approved the introduction of a new co-investment plan ('COIP') for senior employees. Participants may purchase shares using their annual bonus and receive matching shares subject to certain performance conditions. In addition, in March 2008 H Scott-Barrett was granted awards under a separate Matching Share Agreement. Details of the shares outstanding under these schemes at the end of the year are as follows:

	Number of shares
	Opening	Awarded	Exercised	Cancelled	Lapsed	Closing
Matching Share Agreement	-	450,000	-	(300,000)	-	150,000
COIP	-	596,951	-	-	-	596,951

	-	1,046,951	-	(300,000)	-	746,951

Shares were granted under the Matching Share Agreement on 11 March 2008 with a total estimated fair value of £1.5 million. A number of these shares were subsequently cancelled, following H Scott-Barrett's decision to waive his right to any awards under certain performance conditions, resulting in a charge to the income statement in the current year of £0.6 million. Shares were granted under the COIP on 15 December 2008 with a total estimated fair value of £0.1 million.

Fair values of the relevant schemes above are calculated using the following inputs into the Black-Scholes option pricing model:

	SAYE	COIP	CEO share
	scheme		match
			scheme
Share price at grant date	45.5p	44.75p	553.0p
Exercise price	46.0p	0.0p	0.0p
Expected volatility	84%	84%	37%
Expected life (years)	3.12	3.04	2.99
Risk free rate	2.28%	2.58%	3.78%
Expected dividend yield	11.0%	11.2%	4.9%
Correlation	n/a	29%	30%

Expected volatility is based on the historic volatility of the Group's share price over the 3 years to the date of grant. The risk free rate is the yield at the date of grant on a gilt-edged stock with a redemption date equivalent to the expected life of the option or the performance period of the relevant scheme. Options are assumed to be exercised at the earliest possible date.

ESOT shareholding

At 30 December 2008, an Employee Share Ownership Trust ('ESOT') held 1,991,760 (2007: 904,905) shares, to enable the Group to meet the outstanding share awards under the schemes described above. The right to receive dividends on these shares has been waived. The market value of these shares at 30 December 2008 was £0.9 million (2007: £3.5 million).

		Number of	Number of
		shares	shares
	Note	2008	2007
At the start of the year		904,905	1,322,240
Purchased in the year		1,226,660	-
Exercised/vested in year		(139,805)	(417,335)

At the end of the year		1,991,760	904,905

27 Reserves

		Share			Capital	Own
		premium	Revaluation	Other	redemption	shares	Retained
		account	reserve	reserves	reserve	held	earnings	Total
	Note	£m	£m	£m	£m	£m	£m	£m
As at 31 December 2006		219.5	2.7	9.6	4.3	(6.9)	676.7	905.9
Shares issued at premium		0.2	-	-	-	-	-	0.2
Revaluation of owner-occupied property	13a	-	(0.3)	-	-	-	-	(0.3)
Exchange differences	28	-	-	2.0	-	-	-	2.0
Arising on CULS conversion	28	-	-	(0.6)	-	-	(8.4)	(9.0)
Amortisation of IFRS reserve	28	-	-	(0.1)	-	-	-	(0.1)
Share buy back and cancellation		-	-	-	0.1	-	(17.2)	(17.1)
Amortisation of own shares		-	-	-	-	(1.8)	1.8	-
Credit in respect of share-based payments	26	-	-	-	-	-	0.2	0.2
Dividends paid	11	-	-	-	-	-	(19.1)	(19.1)
Loss for the year		-	-	-	-	-	(166.8)	(166.8)

As at 30 December 2007		219.7	2.4	10.9	4.4	(8.7)	467.2	695.9
Shares issued at premium		0.8	-	-	-	-	-	0.8
Revaluation of owner-occupied property	13a	-	(2.4)	-	-	-	-	(2.4)
Exchange differences		-	-	1.9	-	-	-	1.9
Amortisation of IFRS 1 reserve	28	-	-	(0.1)	-	-	-	(0.1)
Other transfers between reserves	28	-	-	1.1	-	-	(1.1)	-
Amortisation and vesting of own shares		-	-	-	-	(0.3)	0.3	-
Purchase of own shares		-	-	-	-	(0.7)	-	(0.7)
Credit in respect of share-based payments	26	-	-		-	-	1.2	1.2
Dividends paid	11	-	-	-	-	-	(15.4)	(15.4)
Loss for the year		-	-	-	-	-	(502.2)	(502.2)

As at 30 December 2008		220.5	-	13.8	4.4	(9.7)	(50.0)	179.0

28 Other reserves

		CULS equity reserve1	Acquisition reserve2	IFRS reserve3	Foreign currency reserve	Net investment hedging reserve	Total
	Note	£m	£m	£m	£m	£m	£m
As at 31 December 2006		0.6	9.5	0.2	(0.7)	-	9.6
Exchange differences	27	-	-	-	7.6	(5.6)	2.0
Arising on CULS conversion	27	(0.6)	-	-	-	-	(0.6)
Amortisation of IFRS reserve	27	-	-	(0.1)	-	-	(0.1)

As at 30 December 2007		-	9.5	0.1	6.9	(5.6)	10.9
Exchange differences		-	-	-	19.6	(14.3)	5.3
Transfer to income statement on part-sale of German portfolio	32b	-	-	-	(13.7)	9.8	(3.9)
Ineffective portion of hedge		-	-	-	-	0.5	0.5
Amortisation of IFRS reserve	27	-	-	(0.1)	-	-	(0.1)
Other transfers between reserves	27	-	-	-	1.1	-	1.1

As at 30 December 2008		-	9.5	-	13.9	(9.6)	13.8

1	CULS equity reserve - CULS are regarded as compound instruments, consisting of a liability component and an equity component. At the date of issue the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible debt. The difference between the proceeds of the issue of the convertible loan notes and the fair value assigned to the liability component, representing the option to convert the liability into equity of the Group, is included in equity.
2	The acquisition reserve relates to the acquisition of the remaining 50% of Morrison Merlin in 2005. Prior to this Morrison Merlin was a joint venture in which Capital & Regional had a 50% interest. The acquisition reserve arose from the difference between the fair value of the Company's existing 50% interest and the carrying value of that interest at the date of acquisition of the outstanding 50%. The reserve will remain in the balance sheet until Morrison Merlin is sold.
3	The IFRS reserve relates to the requirements of IFRS 1. Where cash flow hedge accounting was being applied under a previous GAAP, IFRS 1 requires reserves are debited with the fair value of hedging derivatives at the date of transition for the Group to IFRS (31 December 2004). The entire gain or loss has been taken to equity and recycled to the income statement when the hedged transaction impacts profit or loss or as soon as the hedged transaction is no longer expected to occur.

29 Reconciliation of net cash from operations

	Year to	Year to
	30 December	30 December
	2008	2007
	£m	£m
Loss on ordinary activities before financing	(478.5)	(131.0)
Adjusted for:
Share of loss in joint ventures and associates	432.9	119.2
Loss on revaluation of investment properties	31.7	14.8
Loss/(profit) on sale of properties and investments	6.5	(1.8)
Impairment of goodwill	8.0	-
Impairment of trading property	23.5
Depreciation of other fixed assets	0.6	0.5
Amortisation of short leasehold properties	-	0.1
Amortisation of tenant incentives	-	0.7
Decrease in receivables	2.7	58.5
(Decrease)/increase in payables	(52.1)	2.6
Unrealised loss on exchange	-	(1.2)
Non-cash movement relating to the LTIP	1.2	0.2

Net cash generated from operations	(23.5)	62.6

30 Net assets per share

EPRA has issued recommended bases for the calculation of certain net asset per share information as shown in the following table:


	30 December 2008		30 December 2007
	Net assets	Number of	Net assets	Net assets
	£m	shares (m)	per share (£)	per share (£)
Basic	186.1	71.3	2.61	9.89
Own shares held	-	(2.0)
Fair value of fixed rate loans (net of tax)	(1.1)

Triple net diluted net assets per share	185.0	69.3	2.67	10.04
Exclude fair value of fixed rate loans (net of tax)	1.1
Exclude fair value of derivatives not designated as financial instruments (net of tax)	35.1
Exclude deferred tax on unrealised gains and capital allowances	4.1

EPRA diluted net assets per share	225.3	69.3	3.25	10.08

31 Return on equity

	30 December	30 December
	2008	2007
	£m	£m
Total recognised income and expense attributable to equity shareholders	(502.7)	(165.1)
Opening equity shareholders' funds	703.0	913.1
Return on equity	(71.5)%	(18.1)%

32 Disposals

32a Disposal - FIX UK

On 6 March 2008 the Group disposed of 80% of its interest in FIX UK, held through the T3 Trade Park Unit Trust. The net assets at the date of disposal and at 30 December 2007 were as follows:

		6 March	30 December
		2008	2007
	Note	£m	£m
Investment property		169.8	169.2
Current assets		1.0	2.1
Bank balance and cash		4.0	6.4
Current liabilities		(5.4)	(6.3)
Non-current liabilities		(119.6)	(118.9)

		49.8	52.5
Units redeemed on disposal		(2.1)
Loss on disposal	13c	(10.1)
Provisions released on disposal		3.4
Share of net assets retained by the Group through an associate		(8.6)
Deferred consideration		(0.2)

Total cash consideration		32.2

Net inflow arising on disposal:
Cash consideration		32.2
Cash and cash equivalents disposed of		(4.0)

		28.2

The deferred consideration was received after the year end.

32b Disposal - German investment property portfolio

On 6 October 2008 the Group disposed of 50% of its German investment property portfolio, through the sale of 50% of its interests in Capital & Regional (Europe LP) Limited, Capital & Regional (Europe LP 2) Limited, Capital & Regional (Europe LP 3) Limited, Capital & Regional (Europe LP 5) Limited and Capital & Regional (Europe LP 6) Limited, and 49.9% of its interest in Capital & Regional (Europe Holding 4) Limited to Apollo Real Estate Advisors Property Partners ("AREA"). On 30 December 2008, the articles of association and voting rights of Capital & Regional (Europe Holding 4) Limited were amended so that the Group's effective interest in this entity also became 50%. As a result, the Group's holdings in all the entities noted above have been treated as joint ventures from 6 October 2008, with the exception of Capital & Regional (Europe Holding 4) Limited, which continued to be treated as a subsidiary until 30 December 2008 with AREA's 49.9% share shown as a minority interest. The Group has retained a 100% interest in Capital & Regional (Europe Holding 5) Limited, the parent company of Capital & Regional (Europe LP 5) Limited, and so continues to treat it as a subsidiary. The net assets of these entities at the date of effective disposal and at 30 December 2007 were as follows:

		6 October	30 December
		2008	2007
	Note	£m	£m
Investment property		492.7	490.0
Current assets		2.5	4.9
Bank balance and cash		14.6	15.1
Current liabilities		(9.1)	(9.4)
Bank loans		(373.6)	(353.9)
Minority interests	22	(12.2)	(13.0)
Other non-current liabilities		(24.1)	(26.8)

		90.8	106.9
Share of net assets retained by the Group through joint ventures *		(44.9)
Share of net assets retained by the Group through a subsidiary		(0.8)
Transfer from foreign currency reserve on disposal	28	(13.7)
Transfer from net investment hedging reserve on disposal	28	9.8
Disposal costs		4.1
Loss on disposal	13c	(0.4)
Non-cash consideration		(2.0)

Total cash consideration		42.9

Net inflow arising on disposal:
Cash consideration		42.9
Cash and cash equivalents disposed of as at 6 October 2008		(14.6)
Cash and cash equivalents disposed of as at 30 December 2008		(0.5)

		27.8

* including Capital & Regional (Europe Holding 4) Limited as this was the date it effectively became a joint venture

33 Operating lease arrangements

The Group as lessee

At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

	Land and buildings		Other operating leases
	2008	2007	2008	2007
	£m	£m	£m	£m
Within one year	0.1	0.1	0.3	0.4
Between one and five years	0.2	0.2	0.1	0.3
After five years	4.8	6.0	-	-

	5.1	6.3	0.4	0.7

There were no contingent rents (2007: £nil). During the year the Group made sublease payments of £54,000 (2007:£42,000) and incurred lease payments recognised as an expense of £0.2 million (2007: £0.5 million).

Operating lease payments represent rentals payable by the Group for certain of its office properties and equipment. Leases are negotiated for an average of 110 years (2007: 119 years) and rentals are fixed for an average of 3 years (2007: 4 years).

The Group as lessor

The Group leases out all of its investment properties under operating leases for average lease terms of 12 years (2007: 12 years) to expiry. The future aggregate minimum rentals receivable under non-cancellable operating leases are as follows:

	Unexpired							30	30
	average	Less					More	December	December
	lease	than 1	2 - 5	6 - 10	11 - 15	16 - 20	than 20	2008	2007
	term	year	years	years	years	years	years	Total	Total
100% figures	Years	£m	£m	£m	£m	£m	£m	£m	£m
Mall	9.9	149.9	459.8	304.0	112.2	63.8	369.9	1,459.6	1,793.0
Junction	12.6	53.8	188.0	192.3	130.9	42.1	4.4	611.5	757.9
X-Leisure	17.0	51.3	200.0	240.0	207.5	84.5	42.4	825.7	840.7

Total associates *		255.0	847.8	736.3	450.6	190.4	416.7	2,896.5	3,391.6

German portfolio	7.7	43.5	149.9	94.4	35.7	8.4	-	331.9	-
Other joint ventures	16.2	9.4	37.1	40.3	29.7	19.4	8.5	144.4	98.2

Total joint ventures		52.9	187.0	134.7	65.4	27.8	8.5	476.3	98.2

German portfolio		-	-	-	-	-	-	-	262.2
FIX UK		-	-	-	-	-	-	-	86.7
Other wholly owned	14.0	7.2	28.2	32.7	19.2	3.2	1.2	91.7	99.5

Total wholly owned		7.2	28.2	32.7	19.2	3.2	1.2	91.7	448.4

Total		315.1	1,063.0	903.7	535.2	221.4	426.4	3,464.8	3,938.2

* excluding FIX UK where the Group has written down its investment to £nil.

34 Capital commitments

As at 30 December 2008 the Group's share of capital commitments of joint ventures and associates was £14.9 million (2007: £17.9 million). This comprised £10.2 million (2007: £3.6 million) relating to The Mall, £3.8 million (2007: £11.8 million) relating to the joint venture at Cardiff and £0.9 million (2007: £2.5 million) relating to The Junction.

35 Contingent liabilities

During the year the Group received an expert determination in relation to the limit on negative performance fees for the previous two years and has concluded there is no longer a contingent liability in relation to the amounts potentially repayable.

The Group has given certain guarantees relating to interest shortfalls and cost overruns in connection with the joint ventures at Cardiff and Manchester Arena. The fair value of these guarantees is £0.2 million (2007: £0.3 million). The Group's guarantee in respect of its Braehead joint venture expired during the year.

36 Events after the balance sheet date

Junction fundraising

On 20 April 2009 we announced that The Junction fund was raising around £65 million of new equity. AREA Property Partners is proposing to invest £50 million, with the balance to be subscribed by a number of existing unit holders. The proceeds from the fundraising will principally be applied to pay down debt as part of the refinancing package agreed with the fund's lending banks.

Under the proposals the fund's life will be extended to 31 December 2013 and a new governance structure will be introduced in which AREA will take an active management role. CRPM will continue to provide property management services for the remainder of the life of the fund. The basis for calculating property management fees will be changed to a fixed fee which will provide a positive contribution over and above the cost of providing the services. We will also be entitled to a performance fee based on an IRR over the remaining life of the fund. Unit holders will vote on the proposals on 29 April 2009 and if approved the transaction should complete by the end of May 2009.

Units are expected to be issued at a price of around 18p subject to certain net asset adjustments. This represents a discount of around 40% to the March unit price net of the interest rate swap mark-to-market adjustment of 29.7p. The March unit price before adjusting for the mark-to-market was 40.2p.

The equity issue will, on completion, be accompanied by changes in the fund's banking arrangements designed to increase financial flexibility. These include an increase in the LTV covenant to 90 per cent in the period to 30 September 2010, reducing thereafter, together with a tiered coupon based on LTV and an extension of the facility to April 2014.

The Junction's banks have agreed to waive the LTV covenant conditions until 1 June 2009 to allow the equity issue and restructuring to proceed.

The Group is likely to participate in the fundraising but probably in a relatively modest amount of around £600,000. The Group's pro rata entitlement would be just under £18 million. Whilst the Group is strongly supportive of the equity raise and changes in structure of the fund, in the light of the Group's current need to conserve cash and continuing uncertainty in the property market it has decided that only a small subscription should be made. A consideration in the amount chosen is that a shareholder vote would be required to allow the Group to subscribe for new units with a value of more than 5% of the Company's market capitalisation at the time of subscription. The reason for this is that AREA is considered to be a related party of the Group as a consequence of its acquisition of 49.9% of Capital & Regional (Europe Holding 4) Limited as part of the part-disposal of its German operations. As a consequence AREA's participation in the equity issue would mean that the Group's subscription would therefore be treated as a related party transaction under chapter 11 of the Listing Rules.

In acknowledgement of this restriction, it has been agreed to grant the Group an option allowing it, within a 3-month period of the subscription date, to increase its participation in the fundraising by up to £2 million at the same exercise price as other subscribers. The level of participation at the initial amount of £600,000 would result in the Group's share in The Junction being diluted from 27.3% to around 13.1%.

X-Leisure

On 7 April 2009 the X-Leisure fund completed on the sale of the O2 Centre, Finchley Road for £92.5 million. The proceeds were used to pay down fund debt.

The sale is part of a broader strategy to strengthen the financial base of the X-Leisure fund. The fund is in discussions with investors about a capital increase and is seeking to amend the terms of its banking arrangements to create additional financial flexibility. The fund has separately agreed with the syndicate of banks on its central facility a waiver of the loan to value covenant until the end of May 2009 in order to facilitate implementation of this strategy.

Other events after the balance sheet date

On 10 February 2009, the Group entered a forward contract to buy €57.5 million on 30 April 2009 at a fixed exchange rate of 0.87820, which had the effect of fixing the amount of the liability payable under its existing hedge, and entered into a further forward contract to sell €47.0 million on 30 April 2010 at a fixed exchange rate of 0.87505 as a further hedge for its net investment in its German joint venture.

On 26 March 2009, the Company's shareholders agreed to a reduction of capital to create additional distributable reserves through the cancellation of the Company's share premium account, which is now subject to Court approval once the position of the Company's creditors can be satisfactorily agreed.

On 3 April 2009, settlement was reached regarding an outstanding claim in relation to the Braehead joint venture, which was reimbursed for the costs of certain repair works to the cinema ceiling and other resulting loss of income.

On 9 April 2009, The Junction fund completed on the sale of Victory Industrial Park, Portsmouth for £1.65 million.

On 23 April 2009, the Group agreed to sell its share in its Cardiff joint venture to its joint venture partner for £1.2 million. This will release the Group from future capital commitments of approximately £2 million and its guarantees in respect of the joint venture.

Fund valuations

As at 31 March 2009 the property valuations and unit prices (under UK GAAP) for The Mall, The Junction and X-Leisure funds were as follows:

	Valuation of properties £m *	Unit Value £ +	Value of Group units £m
The Mall	1,482.9	0.3651	57.6
The Junction	618.8	0.4020	34.2
X-Leisure	631.9	0.4643	24.1

*excluding adjustments to property valuations for tenant incentives and head leases treated as finance leases

+ excluding interest rate swap mark-to-market adjustments

37 Related party transactions

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. Transactions between the Group and its joint ventures and associates, all of which occurred at normal market rates, are disclosed below.

	Interest receivable from/(payable to) related parties		Amounts owed by/(to) related parties
Capital & Regional plc	2008	2007	2008	2007
	£m	£m	£m	£m
Joint ventures
Xscape Braehead Partnership	0.6	0.1	12.1	6.1
Capital Retail Park Partnership	-	-	-	1.5
Capital & Regional (Europe LP) Limited	0.1	-	3.3	-
Capital & Regional (Europe LP 2) Limited	-	-	1.8	-
Capital & Regional (Europe LP 3) Limited	0.1	-	8.8	-
Capital & Regional (Europe LP 5) Limited	-	-	1.1	-
Capital & Regional (Europe LP 6) Limited	-	-	1.9	-

	Management and performance fees receivable from/(payable to) related parties		Amounts owed by/(to) related parties
CRPM	2008	2007	2008	2007
	£m	£m	£m	£m
Associates
The Mall Limited Partnership	11.6	(22.5)	(3.8)	(34.4)
The Junction Limited Partnership	4.2	(10.9)	0.4	(0.2)
X-Leisure Limited Partnership	(3.9)	7.0	(9.3)	2.1
The FIX UK Limited Partnership	0.1	-	0.5	-
Joint ventures
German portfolio	0.1	-	-	-
Xscape Braehead Partnership	0.2	0.1	0.1	-

	Rents payable to related parties		Amounts owed by/(to) related parties
Snozone Limited and Snozone Braehead Limited	2008	2007	2008	2007
	£m	£m	£m	£m
Associates
Xscape Milton Keynes Partnership	0.7	0.7	-	-
Xscape Castleford Partnership	0.7	0.6	-	-
Joint ventures
Xscape Braehead Partnership	0.7	0.7	(2.2)	-

All rents payable by SNO!zone companies are due to the relevant Xscape Partnerships, which in the case of Snozone Limited (operator of the ski slopes at Milton Keynes and Castleford) are wholly-owned by X-Leisure Limited Partnership.

During 2008 the Group purchased IT and communication equipment from Redstone plc and Sage plc, on normal commercial terms. Alan Coppin is a director of Redstone plc and Paul Stobart is a director of Sage plc.

As per IAS 24 key personnel are considered to be the executive directors as they are the persons having the authority and responsibility for planning, directing and controlling the activities of the Group. Their remuneration in the income statement is detailed below.

	Year to	Year to
	30 December	30 December
	2008	2007
	£m	£m
Short term employment benefits	1.6	1.5
Post employment benefits	0.2	0.2
Other long term benefits 1	(1.1)	(0.9)
Termination benefits	0.7	0.2
Share-based payments 2	1.1	0.1

	2.5	1.1

1	Other long term benefits relate to the CAP, including the effect of those amounts awarded to the directors in 2006 that are expected to be reversed in line with the clawback of the relevant performance fees (as described in note 4b)
2	Share-based payments include amounts awarded to the directors relating to the LTIP, COIP and Matching Share Agreement

Fund portfolio information (100% figures)

As at 30 December 2008

	The Mall	The Junction	X-Leisure	German Portfolio

Physical data
Number of core properties	21	11	19	50
Number of lettable units	2,200	196	360	193
Lettable space (sq feet - '000s)	7,529	2,876	3,681	5,081

Valuation data
Properties at market value (£m)*	1,692	734	721	595
Revaluation in the year (£m)*	(988)	(288)	(244)	(43)
Initial yield (%)	7.15%	6.20%	6.68%	6.51%
Equivalent yield (%)	8.44%	7.12%	7.68%	n/a
Geared return (%)	(65.41)%	(57.05)%	(48.20)%	(32.44)%
Property level return (%)	(33.18)%	(26.10)%	(21.90)%	(5.16)%
Reversionary %	17.1%	7.4%	3.1%	n/a
Loan to value ratio (%)	66.1%	68.9%	69.7%	78.7%

Lease Data	Years	Years	Years	Years
Average lease length to Break	9.24	13.23	15.97	7.66
Average lease length to Expiry	9.87	12.63	16.98	7.66

Passing rent of leases expiring in:	£m	£m	£m	£m
2009	14.04	0.84	1.61	1.22
2010	6.04	0.10	0.65	0.81
2011-2013	34.66	2.02	0.92	13.74

ERV of leases expiring in:
2009	17.69	0.93	2.02	n/a
2010	6.47	0.49	0.67	n/a
2011-2013	36.77	2.26	0.92	n/a

Passing rent subject to review in:
2009	21.70	11.07	8.47	n/a
2010	19.72	9.44	12.05	n/a
2011-2013	32.66	23.55	28.50	n/a

ERV of passing rent subject to review in:
2009	21.92	12.83	8.95	n/a
2010	22.17	9.61	12.32	n/a
2011-2013	35.49	25.19	30.63	n/a

Rental Data
Passing rent (£m)	148.93	47.01	53.00	36.00
Estimated rental value (£m per annum)	174.33	54.35	58.97	n/a
Rental increase (ERV) %	(0.85%)	(3.73%)	1.73%	n/a
Vacancy rate (%)	5.61%	6.58%	3.84%	1.80%

Like for like net rental income (100%)
Current year net rental income	£m	£m	£m	£m
Properties owned throughout 2007/2008	120.2	39.9	36.8	30.8
Acquisitions	2.1	1.1	10.2	5.1
Disposals	8.7	3.9	-	-

Total net rental income	130.9	44.9	47.0	35.9

Prior year net rental income
Properties owned throughout 2007/2008	127.4	39.2	37.2	30.6
Acquisitions	0.8	0.6	7.8	2.5
Disposals	17.9	7.1	0.2	-

Total net rental income	146.1	46.9	45.2	33.1

Other Data
Unit Price (£1.00 at inception)	£0.5892	£0.7750	£0.8303	n/a
Group Share	16.72%	27.32%	19.37%	48.79%

* Excluding adjustments to property valuations for tenant incentives and head leases treated as finance leases

This information is provided by RNS

The company news service from the London Stock Exchange

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