Interim Results

Capital & Regional PLC 11 September 2001 11th September 2001 2001 INTERIM RESULTS Capital & Regional plc, the specialist retail and leisure property company, today announces its interim results for the six months ended 24th June 2001. Highlights * Fully diluted net assets per share 362p (December 2000: 361p). * Pre-tax profit of £4.8m compares to £3.8m in the previous six months. * Earnings per share on revenue activities increased by 56% from 3.4p in the previous six months to 5.3p. * Dividend per share increased by 11% to 2.5p (June 2000: 2.25p). * Property sales realised £190m (historical cost gain of £25m). * Capital & Regional's management approach led to its shopping centre portfolio achieving a 2.8% increase in income and 1.4% estimated rental growth, with footfall increasing by 7.4%. * Continued progress on implementation of retail park strategy and related financing to transform secondary schemes into prime destination parks. * Following the successful first year's trading of Xscape in Milton Keynes, this new and unique leisure and retail concept is proving its formidable potential. Our goal is to create an exciting and innovative international brand. Commenting on the results, Martin Barber, Chief Executive said: 'The work undertaken by Capital & Regional over the past two years to create a strong, focused portfolio of shopping centres, dominant retail parks and leisure destinations, leaves the Company well positioned to benefit from an improvement in sentiment towards these sectors. The specialist skills developed within the Company should lead to out-performance of our assets and attract new financial partners with whom to develop the business further.' - ends - For further information please contact Capital & Regional on 020 7932 8000: Martin Barber, Chief Executive Lynda Coral, Financial Director Sarah Carrell, Head of Corporate Communications A copy of this statement and the presentation will be available on our corporate website - www.capreg.com. CHAIRMAN AND CHIEF EXECUTIVE'S STATEMENT RESULTS AND FINANCIAL POSITION Fully diluted net assets per share rose to 362p from 361p in December 2000. In the six months to 24th June 2001, profit before tax was £4.8m. Earnings per share on revenue activities increased by 56% from 3.4p in the previous six months to 5.3p (June 2000: 6.1p). In the six months ended 24th June 2000, the £10.4m profit before tax reported included a £4.2m profit on investment sales against prior year end valuation. Furthermore the effect of new accounting requirements reduces profit in the current six month period by £1.2m compared to last year. The Directors have resolved to pay an interim dividend of 2.5p, an increase of 11% (June 2000: 2.25p). The dividend will be paid on 19th October 2001 to shareholders on the register at the close of business on 21st September 2001. Our facility for dividend reinvestment by shareholders continues. In the first half, property sales of £190m were completed at December 2000 values realising historic cost gains of £25m. The Company's borrowings at 24th June 2001 were £477.4m against £615.6m at December 2000. Net cash balances were £0.9m (December 2000: £6.1m) and the Company had approximately £30m (December 2000: £10.3m) of undrawn secured facilities. Fully diluted gearing at 137% has been reduced by disposals from 159% at December 2000 and reflects the cost of share buy-backs totalling £23.3m. Since the year end, the Company has acquired a further 9.9 million ordinary shares bringing the total purchases to date to almost 20% of the issued share capital a year ago. Shareholder consent has been given to purchase a further 14.3% of the remaining shares, representing 11.2 million ordinary shares. The Board will continue to review the Company's share purchases in light of the share price and level of gearing for the long-term interests of shareholders. The weighted average interest rate cost of total borrowings at 24th June 2001 was 6.8% compared to 7.2% at the end of 2000. Rental income as a ratio to net interest payable including capitalised interest was maintained at 1.5 times. STRATEGY Capital & Regional is focused on the retail and leisure sectors within three operational divisions. The first is shopping centres, all of which are located in town centres and are covered properties to provide a controlled environment. They are either dominant in a good catchment or a good second centre in a major city conurbation. Our energies are aimed at increasing relevant footfall, whereby retailers may take advantage of increased sales. Typically, we acquire older centres, which have not previously benefited from Capital & Regional's management style and our innovative approach to marketing and promotion. Increase in retailer trade is also a result of our reconfiguration and renovation exercises. One example is our recently completed Shopping City in Wood Green, North London where, following significant works carried out last year and recently completed, footfalls this year are running some 17% above last year. We expect increased profits for our tenants and a positive effect on rental values. All of our shopping centres are focused on the 'value retail' sector, and in an uncertain economic environment, it is our belief that these centres will prove to be the most resilient to any overall reduction in the rate of retail spending growth. In the first half, despite rental values increasing and interest rates reducing, there has been a continuing negative movement in investment yields for this type of property. Recent indications demonstrate that institutions are again beginning to look favourably at this form of investment. Retail parks are our second area of operation. At the year end, we reported that our existing portfolio of 1.4m sq ft is in a transitional phase to transform secondary schemes into prime destination parks anchored by Big Box retailers. We expect the benefits of these initiatives to show through over the next eighteen months. Capital & Regional has made significant progress in the implementation of a financing strategy for both the transformation of our existing portfolio and for the substantial developments at Oldbury and Auchinlea. We hope to provide further information to shareholders by the year end. Xscape is our third business area. Our first project in Milton Keynes is proving to be a great attraction with the longest 'real snow' indoor ski slope in Europe. We strongly believe that there is more to this building than just a property transaction and this retailing and leisure concept can be developed as an international brand. OPERATING REVIEW Shopping Centres The first half of the year has shown a continued increase in the level of activity by our management team producing a net income of £37.0m, an increase of 2.8% since the year end and 14.2% from June 2000. Estimated rental value increased by a further 1.4% to £43.8m. In the first six months, excluding rent reviews, there were 119 transactions across the portfolio of 453 units. This compares to 176 transactions across the portfolio over the whole of last year. The void level has fallen from 3.8% at the year end to 3%. Our total footfalls increased by 7.4% to 24 million over the corresponding period last year, net of The Pallasades in Birmingham and Liberty 2 in Romford, where temporary reductions due to redevelopment would distort the trend. The increase in footfall and rent levels, coupled with low vacancy is evidence of the continued success of Capital & Regional's management approach. At The Pallasades, we continue to explore re-development opportunities with Railtrack and to actively manage the existing centre. During the first half, we have introduced American Express, Mobile Styles and Bodycare as new tenants. As the major refurbishment programme at Shopping City, Wood Green completes, the centre's popularity improves considerably with footfall up 17% to 4.75 million visitors in the last six months. The centre now offers shoppers popular high street retailing, an in-door market plus leisure and entertainment in the form of a 12 screen multiplex cinema and a choice of cafes and restaurants. Since the year end, we have introduced further new retailers including Woolworths, All Sports and a new store for fashion retailer Blue Inc, who have also taken a unit at Selborne Walk in Walthamstow. At the Ashley Centre in Epsom, we continue to improve the mall environment through a re-modelling to the West Square of the centre. New retailers, Game, McDonalds, Starbucks and Vision Express have all taken representation as well as extending stores for Next, Hammicks, Body Shop and Cafe la Mocha. During the first half, footfall has increased by 17% to 3.3 million shoppers. During the first half, we have introduced a new tenant Quiz to the Howgate Centre in Falkirk and doubled the size of the Clinton Cards unit. At Selborne Walk, Walthamstow, we have relocated First Sport into a larger unit and let the space to Millets. The Trinity Centre in Aberdeen remains fully let and the success of our marketing initiatives has increased footfall by 9% to 4.4 million visitors over the first half. At Liberty 2 in Romford, we have introduced The Post Office and local retailer Junior. We are also finalising the planning consent for the extension of the centre to the adjacent 'Dolphin' site, providing a mixed use development incorporating retail, a hotel and residential. Footfall has been adversely effected by the closure of Sainsburys, however is expected to recover when Wilkinsons opens from the same space during this month. The success story at The Alhambra Centre in Barnsley continues with footfall increasing by 10.4% to 4 million visits during the first half. The introduction of major occupiers Primark and TK Maxx has been the catalyst for further letting interest and new tenants in the first half are The Perfume Shop, Bodycare and Adam. An agreement has also been reached with Massarella Catering for a new Nova Cafe offer in the mall. Our joint venture with Stannifer to redevelop the Sauchiehall Centre in Glasgow continues well. The construction phase is on programme with TK Maxx, WH Smith and Superdrug established in their new store formats. Major occupier Primark will take possession in October and hopes to commence trading from Easter 2002. Despite this positive activity within our shopping centre portfolio, there was a valuation decrease in the first half of 2.8%. Retail Parks Our retail park strategy continues to focus on destination retail parks of over 150,000 sq ft by either transforming our existing portfolio or through new development. In the first half, steady progress has been made on the implementation of this strategy on a number of our parks. There was no net valuation movement in the six month period on the portfolio. At Aylesbury, a detailed planning application has been submitted for a 190,000 sq ft scheme and pre-lets have been agreed for half of this floor space including a Big Box anchor tenant. Planning consent is anticipated during the first half of 2002. At Beckton, detailed planning consent has now been obtained to redevelop and refurbish this secondary park into a 190,000 sq ft destination park. The latest letting has been achieved at £20.00 per sq ft, compared to the highest previous rent of £18.25 per sq ft. Completion of the new 100,000 sq ft B&Q unit at Hull is on programme for October, when the refurbishment of the balance of the existing retail park will commence. The latest letting of £20.00 per sq ft, compared to £8.00 per sq ft upon acquisition in December 1999, illustrates the extremely positive effect on rental values as a direct result of the inclusion of destination retailers, B&Q, DFS and Comet. Plans are well advanced for the next phase totalling a further 100,000 sq ft. An agreement to lease has been exchanged with Matalan at the 155,000 sq ft retail park at Stratford upon Avon, which we own in partnership with Hermes, to extend their existing 30,000 sq ft store to 44,000 sq ft. A detailed planning application has been submitted. Terms have also been agreed for a new 45,000 sq ft destination store. At Auchinlea/Junction 10 in Glasgow, significant progress has been made in the financing of this 600,000 sq ft shopping park and we anticipate announcing details during the fourth quarter. A detailed planning application is being prepared for submission by the year end to commence the first phase of our park at Oldbury. Xscape Our first Xscape in Milton Keynes is fully let and continues to exceed our expectations with over four million visitors since opening last year. The 16 screen cinema is in the top 25 in the country, there are numerous and innovative retailing concepts, which one would not expect to find outside London, together with many bars and restaurants. We are currently reviewing marketing initiatives to significantly improve fooftall for the benefit of our occupiers. We have now received full planning permission for our second Xscape at Castleford on the M62, adjacent to the Freeport factory outlet centre. To date, 27% of the floor space is now pre-let with a further 41% in solicitor's hands. We hope to commence construction during the early part of 2002. Alongside our joint venture partner, Capital Shopping Centres, we have submitted a planning application for our third Xscape at Braehead in Glasgow. Planning zoning approval for our major Xscape at Castrop-Rauxel in the Ruhr, Germany, is anticipated during the first half of 2002. With this successful start and our substantial expansion plans, we now believe the time has come to add further senior management expertise, to move the unique Xscape concept to a new level and establish it as a standalone business and create a successful international brand. We expect to make an announcement in the near future. OUTLOOK Within our shopping centre portfolio, we have seen improved confidence from a number of our major tenants in the last twelve months, with many reporting increased performance as they reposition themselves in the retail market. We strongly believe that this type of property should be viewed as an operating business as well as a property investment, a belief increasingly being shared by financial institutions and other investors. Retailers continue to expand their latest formats on retail parks with new development activity being at an all time low due to planning restrictions. We are already seeing significant rental growth on the destination parks which we are creating and are confident that this will continue. Within our Xscape operation, we are seeing increased interest from leisure and lifestyle retailers wanting to participate in this exciting and new leisure destination. We are confident of rental and capital growth in the years to come from existing and new opportunities to exploit this brand. Therefore, Capital & Regional faces the future with optimism. The Company is well positioned to take advantage of its strong portfolio and management expertise. Tom Chandos Martin Barber Chairman Chief Executive CONSOLIDATED PROFIT AND LOSS ACCOUNT (Restated) (Restated) (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year to 24 June 24 June 25 December Notes 2001 2000 2000 £000 £000 £000 Turnover: group rental income and 31,680 34,766 79,495 share of joint ventures' turnover Less: share of joint ventures' (2,091) (1,866) (11,877) turnover Group rental income 29,589 32,900 67,618 Net property costs (4,296) (4,877) (9,687) Net rental income 25,293 28,023 57,931 Profit on the sale of trading and 4 35 1,006 306 development properties 25,328 29,029 58,237 Administrative expenses (3,321) (3,520) (7,955) 22,007 25,509 50,282 Other operating income 581 577 502 Group operating profit 22,588 26,086 50,784 Share of operating profit / (loss) in 331 (396) 476 joint ventures and associates 22,919 25,690 51,260 Profit on sale of investment 4 370 4,196 4,092 properties and investments Profit on ordinary activities before 23,289 29,886 55,352 interest Income from listed investments - 659 659 Interest receivable and similar income 1,182 453 824 Interest payable and similar charges 5 (19,650) (20,577) (42,667) Profit on ordinary activities before 4,821 10,421 14,168 taxation Taxation 6 (290) (416) (413) Profit on ordinary activities after 4,531 10,005 13,755 taxation Equity minority interests 298 (135) (431) Profit attributable to the 4,829 9,870 13,324 shareholders of the Company Equity dividends paid and payable (1,971) (2,211) (5,070) Profit retained in the period 2,858 7,659 8,254 Earnings per share 7 5.6p 10.0p 13.7p Earnings per share - diluted 7 5.6p 9.7p 13.7p Earnings per share on revenue 7 5.3p 6.1p 9.5p activities The 2000 comparative amounts have been restated in accordance with Urgent Issues Task Force Abstract 28 'Operating lease incentives' (see note 1). CONSOLIDATED BALANCE SHEET (Restated) (Restated) (Unaudited) (Unaudited) (Audited) As at As at As at 24 June 24 June 25 December Notes 2001 2000 2000 £000 £000 £000 Fixed assets Property assets 8 721,782 976,004 916,485 Other fixed assets 14,542 14,139 14,521 736,324 990,143 931,006 Investment in joint ventures 9 Share of gross assets 86,878 9,168 68,084 Share of gross liabilities (58,996) (7,373) (38,270) 27,882 1,795 29,814 764,206 991,938 960,820 Current assets Property assets 8 22,529 30,191 18,846 Debtors: amounts falling due after more than 7,816 1,069 5,541 one year amounts falling due within one year 35,179 36,176 42,272 Cash at bank and in hand 935 744 6,091 66,459 68,180 72,750 Creditors: amounts falling due within (61,280) (66,159) (129,705) one year Net current assets / (liabilities) 5,179 2,021 (56,955) Total assets less current liabilities 769,385 993,959 903,865 Creditors: amounts falling due after (463,333) (590,920) (556,582) more than one year (including convertible unsecured loan stock) Provision for liabilities and charges - - (2,952) Net assets 306,052 403,039 344,331 Capital and reserves Called up share capital 7,886 9,827 8,874 Share premium account 161,927 161,876 161,895 Revaluation reserve 95,148 162,531 130,770 Other reserves 2,535 591 1,545 Profit and loss account 38,556 59,168 37,533 Equity shareholders' funds 306,052 393,993 340,617 Equity minority interests - 5,046 3,714 Non-equity funding by joint - 4,000 - arrangement partners Capital employed 306,052 403,039 344,331 Net assets per share adjusted for 10 388.1p 400.9p 383.9p minority interests and non-equity funding Net assets per share adjusted for 10 361.8p 377.8p 360.6p minority interests and non-equity funding - diluted The 2000 comparative amounts have been restated in accordance with Urgent Issues Task Force Abstract 28 'Operating lease incentives' (see note 1). STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (Restated) (Restated) (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year to 24 June 24 June 25 December 2001 2000 2000 £000 £000 £000 Share of unrealised deficit on valuation of (14,309) (4,178) (32,852) investment properties Share of unrealised surplus on valuation of 341 73 512 other fixed assets Share of unrealised deficit on valuation of (653) - (561) properties in joint ventures Share of tax on revaluation surpluses 489 (2,130) (3,614) realised in period Deferred tax provided on unrealised - - (2,952) revaluation surpluses Exchange differences - 3 3 (14,132) (6,232) (39,464) Profit attributable to the shareholders of 4,829 9,870 13,324 the Company Total recognised gains and losses relating (9,303) 3,638 (26,140) to the period The 2000 comparative amounts have been restated in accordance with Urgent Issues Task Force Abstract 28 'Operating lease incentives' (see note 1). RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS (Restated) (Restated) (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year to 24 June 24 June 25 December 2001 2000 2000 £000 £000 £000 Profit attributable to shareholders of the 4,829 9,870 13,324 Company Equity dividends paid and payable (1,971) (2,211) (5,070) Profit retained in the period 2,858 7,659 8,254 Share capital and share premium issued in 34 - 20 period Share capital purchased and cancelled in (23,325) - (20,759) period (including expenses) Other recognised gains and losses relating (14,132) (6,232) (39,464) to the period (see above) Net (reduction) / addition to shareholders' (34,565) 1,427 (51,949) funds Opening shareholders' funds 340,617 392,566 392,566 Closing shareholders' funds 306,052 393,993 340,617 The 2000 comparative amounts have been restated in accordance with Urgent Issues Task Force Abstract 28 'Operating lease incentives' (see note 1). SUMMARY CASH FLOW STATEMENT (Restated) (Restated) (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year to 24 June 24 June 25 December Notes 2001 2000 2000 £000 £000 £000 Net cash inflow from operating 11 20,327 29,315 49,514 activities Dividends received from joint ventures 400 - 180 Dividends received from associates - 5 5 Returns on investments and servicing (17,722) (20,563) (42,960) of finance 3,005 8,757 6,739 Taxation (2,501) - (622) Net operating cash flow 504 8,757 6,117 Capital expenditure and financial 171,758 (4,710) (8,160) investment 172,262 4,047 (2,043) Acquisitions and disposals (2,882) - (18,716) 169,380 4,047 (20,759) Equity dividends paid (2,884) (2,948) (5,134) Cash in / (out) flow before financing 166,496 1,099 (25,893) Financing: Issue of ordinary share capital 34 - 20 Purchase of ordinary share capital (33,491) - (10,593) Cash (out) / in flow from debt (138,195) (7,858) 35,169 financing Decrease in cash in the period (5,156) (6,759) (1,297) The 2000 comparative amounts have been restated in accordance with Urgent Issues Task Force Abstract 28 'Operating lease incentives' (see note 1). Reconciliation of net cash flow to movement (Unaudited) (Unaudited) (Audited) in net debt 6 months to 6 months to Year to 24 June 24 June 25 December 2001 2000 2000 £000 £000 £000 Decrease in cash in the period (5,156) (6,759) (1,297) Cash out / (in) flow from debt financing 138,195 7,858 (35,169) Change in net debt resulting from cash flows 133,039 1,099 (36,466) Reclassification of debt in joint - - 22,568 arrangement Net debt at beginning of period (609,501) (595,603) (595,603) Net debt at end of period (476,462) (594,504) (609,501) Analysis of net debt (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year to 24 June 24 June 25 December 2001 2000 2000 £000 £000 £000 Cash in hand and at bank 935 744 6,091 Bank overdrafts - (115) - 935 629 6,091 Debt due within one year (13,543) (3,340) (58,351) Debt due after one year (463,854) (591,793) (557,241) (476,462) (594,504) (609,501) NOTES TO THE FINANCIAL STATEMENTS 1. Accounting policies The financial information included in the Interim Report comprises consolidated profit and loss account, balance sheet, statement of total recognised gains and losses, reconciliation of movement in shareholders' funds and summary cash flow statement. These have been prepared in accordance with the normal accounting policies of the Group, and do not constitute statutory accounts. The Group has adopted Urgent Issues Task Force Abstract 28 (UITF 28), 'Operating lease incentives', in these financial statements. In accordance with the requirements of UITF 28, the previous periods' results have been restated to reflect its application to all affected lease agreements starting on or after 26 December 1999. The effect of this restatement together with the impact on the current periods' results are summarised below: 6 months to 6 months to Year to 24 June 24 June 25 December 2000 2001 2000 £000 £000 £000 (Decrease) / increase in (594) 409 914 group rental income Reduction in share of (187) - (105) operating profit of joint ventures Increase in taxation charge (26) (143) (472) Increase in equity minority (7) (20) (40) interests in profit for the period (Decrease) / increase in (814) 246 297 profit for the period attributable to shareholders of the Company Reduction in unrealised 184 - 253 deficit on revaluation of investment properties in joint ventures Reduction in unrealised 685 69 509 deficit on revaluation of investment properties Increase in shareholders' 55 315 1,059 fund in the period Increase / (decrease) in 82 (473) (5,196) carrying value of investment properties (Decrease) / increase in (3) - 148 investment in joint ventures (Decrease) / increase in (225) 1,069 5,541 prepayments and accrued income due after more than one year Increase in prepayments and 440 328 1,572 accrued income due within one year Increase in corporation tax (26) (143) (472) creditor Increase in accruals and (206) (446) (494) deferred income Increase in equity minority (7) (20) (40) interests Increase in net assets 55 315 1,059 attributable to the shareholders' in the period 2. Financial information and presentation The financial information for the year to 25 December 2000 does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. It is extracted from the statutory accounts for that year, on which the auditors Deloitte & Touche gave an unqualified report under Section 236 of the Companies Act 1985 which did not contain a statement under Section 237(2) or Section 237(4) of the Companies Act 1985. Statutory accounts for the year ended 25 December 2000 have been delivered to the Registrar of Companies. The financial information for the six months to 24 June 2001 is unaudited and has not been reviewed by the Group's auditors. 3. Segmental analysis Turnover, profit on ordinary activities before taxation and net assets are attributable to property investment, development and management. Turnover, profit on ordinary activities before taxation and operations arise in the UK except £nil (2000: £659,000) of income from listed investments which originates from the US. Net assets adjusted for minority interests originate in the UK. 4. Asset sales Fixed assets Current assets (Unaudited) (Unaudited) (Unaudited) (Unaudited) 6 months 6 month ended 6 months ended 6 months ended 24 June 2000 24 June 2001 ended 24 June £000 £000 24 June 2001 2000 £000 £000 Net sale 189,994 26,288 423 12,178 proceeds Cost of (164,842) (4,006) (388) (11,172) sales Historical 25,152 22,282 35 1,006 cost profit Revaluation (24,782) (18,175) - - surplus 370 4,107 35 1,006 Share of - 89 - - joint ventures Profit 370 4,196 35 1,006 recognised on sale of assets 5. Interest payable and similar charges (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year to 24 June 24 June 25 December 2001 2000 2000 £000 £000 £000 Bank loans and overdrafts wholly 17,669 21,540 42,823 repayable within five years Other loans 863 868 1,663 18,532 22,408 44,486 Capitalised in period (112) (1,947) (2,678) 18,420 20,461 41,808 Share of joint ventures interest 1,230 116 859 payable 19,650 20,577 42,667 6. Taxation The taxation charge for the period has been estimated from the expected taxable profits of the Group after taking account of losses brought forward and capital allowances available. 7. Earnings per share Earnings per share have been calculated on a weighted average of 85,746,495 Ordinary shares of 10p each in issue during the period (six months to 24 June 2000: 98,265,697, year to 25 December 2000: 97,042,630) and have been based on profit on ordinary activities after taxation and minority interests of £4,829,000 (six months to 24 June 2000: £9,870,000, year to 25 December 2000: £13,324,000). Diluted earnings per share have been calculated after allowing for the exercise of share options which have met the required exercise conditions and the full conversion of the Convertible Unsecured Loan Stock, if the effect on earnings per share is dilutive. The weighted average number of Ordinary shares of 10p each is 86,065,241 (six months to 24 June 2000: 110,943,812, year to 25 December 2000: 97,256,996) and the relevant earnings are £4,829,000 (six months to 24 June 2000: £10,738,000 year to 25 December 2000: £13,324,000). Earnings per share on revenue activities exclude the profit on the sale of investment properties and investments, and associated tax charge and minority interests thereon, of £259,000 (six months to 24 June 2000: £3,924,000, year to 25 December 2000: £4,101,000). 8. Property assets Fixed Current Total property property property assets assets assets £000 £000 £000 Cost or valuation As at 25 December 2000 921,681 18,846 940,527 Less: UITF 28 adjustment (5,196) - (5,196) As at 25 December 2000 - restated 916,485 18,846 935,331 Refurbishment and development expenditure 9,526 6,301 15,827 Amortisation of short leasehold (86) - (86) properties Disposals (189,503) (2,618) (192,121) Revaluation (14,640) - (14,640) As at 24 June 2001 721,782 22,529 744,311 Fixed property assets at 24 June 2001 as per balance sheet 721,782 UITF 28 adjustment at 24 June 2001 included in current assets 4,733 Total fixed property assets as valued below 726,515 The fixed property assets were valued at 24 June 2001, as follows: £000 DTZ Debenham Tie Leung Open Market Value 684,060 Insignia Richard Ellis Limited Open Market Value 33,170 Directors Open Market Value 220 Directors Net sale proceeds of properties 9,065 sold after 24 June 2001 726,515 Valuations are at open market value as defined in the Appraisal and Valuation Manual of The Royal Institution of Chartered Surveyors. 9. Joint Ventures The Group's investment in joint ventures is as follows: Capital Xscape Sauchiehall Easter Others Total Hill (Milton Centre Holdings Partnership Keynes) Limited Limited Partnership £000 £000 £000 £000 £000 £000 Group share of: Investment 17,650 37,387 18,112 2,245 - 75,394 properties Trading - - - 4,450 686 5,136 properties Other 581 3,253 365 1,928 221 6,348 current assets Gross 18,231 40,640 18,477 8,623 907 86,878 assets Bank loans - (23,400) (15,150) (3,793) (500) (42,843) Other - - (2,500) (2,469) - (4,969) loans Other (372) (8,379) (713) (1,665) (55) (11,184) current liabilities Gross (372) (31,779) (18,363) (7,927) (555) (58,996) liabilities Investment 17,859 8,861 114 696 352 27,882 in joint venture Effective 50% 50% 50% 50% 50% Group share 10. Net assets per share Net assets per share have been calculated on 78,855,975 Ordinary shares of 10p each (24 June 2000: 98,265,697, 25 December 2000: 88,734,623) in issue at 24 June 2001 and have been based on net assets attributable to shareholders of £306,052,000 (24 June 2000: £393,993,000, 25 December 2000: £340,617,000). Diluted net assets per share assumes that all of the Convertible Unsecured Loan Stock ('CULS') had been converted at the balance sheet date. Diluted net assets per share have been calculated on 91,268,146 Ordinary shares of 10p each and have been based on adjusted net assets attributable to shareholders of £330,230,000 (24 June 2000: £418,079,000, 25 December 2000: £364,749,000) by adding the £24,178,000 (24 June 2000: £24,086,000, 25 December 2000; £24,132,000) balance sheet value of the CULS. 11. Reconciliation of net cash inflow from operating activities (Restated) (Restated) (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year to 24 June 24 June 25 December 2001 2000 2000 £000 £000 £000 Group operating profit 22,588 26,086 50,784 Profit on sale of trading and (35) (1,006) (306) development properties 22,553 25,080 50,478 Depreciation of other fixed assets 218 176 567 Amortisation of short leasehold 86 86 173 properties Amortisation of tenant incentives 1,100 175 914 Amortisation of goodwill on - 72 72 purchase of minority interests Profit on disposal of fixed assets (31) (14) (52) Decrease / (increase) in trade 7,567 361 (12,708) debtors, other debtors and prepayments (Decrease) / increase in trade (11,166) 3,379 10,070 creditors, other creditors, taxation and social security and accruals Net cash flow from operating 20,327 29,315 49,514 activities 12. Debt valuation The table below show the market value of fixed rate debt instruments, and reflects the difference between the interest yield curve as at 24 June 2001 and the rates historically committed; namely the fair value adjustment. (Unaudited) (Unaudited) (Audited) As at As at As at 24 June 24 June 25 December 2001 2000 2000 £000 £000 £000 Book value and notional principal 198,642 261,891 247,880 Fair value (200,854) (261,390) (251,368) Fair value adjustment (2,212) 501 (3,488) Minority interests - 41 81 Fair value adjustment (2,212) 542 (3,407) attributable to the Group Net of tax at 30% (1,548) 379 (2,385) Effect on fully diluted net asset (1.7)p 0.3p (2.4)p per share adjusted for minority interests and non-equity funding 13. Copies of the Interim Report Copies of the Interim Report are available from the Company's registered office at 10 Lower Grosvenor Place, London, SW1W 0EN.

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