Interim Results

DERWENT VALLEY HOLDINGS PLC
29 September 1999



                     STRONG PERFORMANCE AT
                  DERWENT VALLEY HOLDINGS PLC
                               
                        Interim results
                Six months ended 30th June 1999
                               
                               
*    Derwent Valley Holdings, the specialist investor and
     refurbisher of Central London properties, announces
     increased profits and dividend for the half year ended
     30th June 1999.

                            1999        1998    Increase
     Net
     rental
     income (£m)            12.7        12.0         5.8%
     
     Adjusted
     Profit
     Before
     tax (£m)                5.6         4.6        21.7%
     
     FRS3
     Profit
     Before
     tax (£m)               10.8         4.6       134.8%
     
     Adjusted
     Earnings
     Per
     share (p)               8.87        7.02       26.4%
     
     Dividend
     Per
     share (p)               2.35        2.20        6.8%

*    Acquisitions announced since the year-end have totalled
     approximately £90 million, including the £70 million
     Central London portfolio announced in August.

*    Disposals completed to date have amounted to
     £39.2 million.

*    Lettings in excess of £1.6 million per annum have been
     achieved, including space at recently refurbished
     properties, Hythe House, Hammersmith, Morelands
     Buildings, Clerkenwell and Holden House, Oxford Street.

*    Schemes have commenced at Greencoat House, Victoria, for
     completion in November 1999, and at Broadwick House,
     Soho, for completion during Autumn 2000.

John Ivey, Chairman, commented:

     'The company yet again has had a very active half year.
     Tenant demand remains strong and the Central London
     property market continues to show good rental and capital
     growth.  We are confident of reporting further growth in
     net asset value at the year-end.'


For further information contact:

John Burns, Managing Director
Derwent Valley Holdings plc
0171 486 4848


John Rudofsky
Citigate Dewe Rogerson
0171 638 9571
                               
                  DERWENT VALLEY HOLDINGS PLC
                        INTERIM REPORT
                HALF YEAR ENDED 30TH JUNE 1999
                               
Results

Before taking account of gains on disposal of investment
properties, the group's profit before taxation was £5.6
million, compared with £4.6 million in 1998, an increase of
nearly 22 per cent.  Disposals of non core properties
continued and realised first half gains of £5.2 million (1998
: £nil), giving Financial Reporting Standard 3 profit before
taxation of £10.8 million.  Earnings per share, excluding
investment property disposal gains, increased 26 per cent from
7.02p per share to 8.87p per share.

Net rental income rose by £700,000 to £12.7 million.  Rents
received from newly acquired properties contributed
approximately £1.5 million, while new lettings and rent
reviews added over £1 million to the rent roll.  However, this
increase was offset by voids relating to current refurbishment
and redevelopment projects, and by the disposal of properties.
The trading activity made a small contribution to profits
while interest payable, benefiting from lower interest rates,
was down by £0.5 million, despite an increase in average
borrowings during the half year.


Financing

Borrowings at 30th June 1999 were £117.3 million, of which £80
million was either at fixed rates or hedged.  They showed a
fall of £26 million from the year-end which was principally
due to the £39.2 million proceeds from property disposals.
Capital expenditure and acquisitions amounted to
£14.7 million.  Interest gearing for the half year was 49 per
cent compared with 55 per cent for the whole of 1998, while
balance sheet gearing fell from the year-end figure of
45 per cent to 36 per cent.  On completion of the £70 million
acquisition announced in August, balance sheet gearing will
rise to approximately 60 per cent.

Financial Reporting Standard 13 requires that disclosure is
made of the effect of revaluing fixed rate debt and interest
rate hedging instruments based on today's economic conditions
as against those which prevailed at the point of commitment.
At the half year, the fair value adjustment arising as a
result of this revaluation was a negative £14.9 million
(31st December 1998 : negative £17.8 million), equivalent to a
reduction in the group's net asset value per share of 28p
(31st December 1998 : 34p).  The movement in this adjustment
since the year-end reflected the expectation by the financial
markets of imminent rises in base rate by the Bank of England,
a view which has subsequently proved to be correct.

Dividend

The board has declared an interim dividend of 2.35p per share,
an increase of 6.8 per cent on the 2.20p paid in 1998.  The
dividend will be paid on 8th November 1999 to those
shareholders on the register at the close of business on 22nd
October 1999.


Year 2000

Since the publication of our 1998 annual report, we have
completed our programme of testing and rectification of
essential equipment that had been identified as being
potentially affected by the millennium change.  However,
despite the success of this programme, the board continues to
believe that it is not possible to warrant that full
compliance has been achieved due to the complexity of the
issue.  Consequently, during the final quarter of 1999,
efforts will be concentrated on implementing contingency plans
designed to minimise the risk presented by unforeseen problems
with either our own systems or those of our suppliers and
customers.  Costs incurred to date in respect of the Year 2000
programme amount to £33,000 and final costs are not expected
to exceed £50,000.


Review of activities

The company yet again has had a very active half year.
Details of acquisitions, disposals, lettings, and
refurbishment and redevelopment projects can be found in the
interim property review which follows my statement.


Prospects

The Central London property market, particularly the West End,
continues to show good rental and capital growth.  Tenant
demand remains strong, and there is much competition for new
investment opportunities.  Accordingly, we are confident of
reporting further growth in net asset value at the year-end.




J C Ivey
Chairman


29th September 1999


INTERIM PROPERTY REVIEW


Acquisitions

Purchases completed during the first half were modest at
£9.4 million. Caledonia House, Pentonville Road near Kings
Cross, a modern multi-tenanted 2,670m2 office building was
acquired for £4.3 million.   Located in an improving area and
let at a low average rent of £120 per m2, the property has
good reversionary prospects. In addition, a portfolio of 12
multi-tenanted properties in Lamb's Conduit Street, WC1 was
acquired for £5.1 million, which was subsequently used as part
of the consideration for the £9.25 million acquisition of 16-
19 Gresse Street, W1, a 3,110m2 freehold office building.  As
announced in August, contracts have been exchanged to acquire
for £70 million a 20,000m2 portfolio of prime reversionary
Central London properties, generating net rental income of
£4.62 million per annum. This exciting purchase is located
entirely in our core operating area and comprises eight
freehold properties and one leasehold property. Within the
portfolio there are opportunities to increase value through
active management and refurbishment. The principal buildings
are:

*    Four adjoining retail and office buildings of 5,500m2 in
     the centre of Covent Garden, fronting King Street and
     Floral Street, producing a rental income of £1.89 million
     per annum.  This location is considered to be one of the
     most important property areas in Central London.

*    Panton House, Haymarket, SW1 a retail and office building
     of 2,190m2.  The majority of the accommodation is vacant
     and proposals are being considered to re-design the space
     in Derwent Valley's established contemporary style.  The
     refurbishment is planned for early next year.

*    Three substantial multi-tenanted properties in mid-town:
     Heron House, High Holborn, WC1; 40-43 Chancery Lane, WC2
     and 2-3 Cursitor Street, EC4.  Heron House comprises
     5,680m2 of offices and retail space producing an income
     of £1.48 million per annum.  Chancery Lane and Cursitor
     Street comprise two interconnecting office buildings of
     5,090m2, held on a head-lease expiring in 2029.  Net
     rental income is £760,000 per annum.

Letting activity

The strong letting market in Central London reported at year
end has continued.  In the first half, 5,580m2 of space was
let at rents totalling in excess of £1.6 million, which will
become income producing towards the end of this year and next
year.

*    Hythe House, Hammersmith, W6.  In this recently completed
     refurbishment, 3 floors totalling 3,250m2 were let
     achieving £305 per m2.

*    Morelands Buildings, Clerkenwell, EC1. Following
     completion of the first phase of works, there has been
     strong demand from tenants for this improving location,
     with 1605m2 let this year. Rental levels are now £215 per
     m2 against £135 per m2 reported at year end.  A further
     1940m2 of space is now under refurbishment.

*    Holden House, Oxford Street, W1. The reconfiguration of
     the renamed Evelyn House, involving the construction of a
     new office entrance in Rathbone Place, is nearing
     completion.  A new retail unit created from the original
     office entrance in Oxford Street has been let and, since
     the half year, 1730m2 of the office refurbishment has
     been pre-let, achieving rents of up to £375 per m2.

The restructuring of the lease at Premier House, Victoria,
SW1, a 5760m2 office building, has been completed.  It is now
let on a new 20 year lease at £920,000 per annum with effect
from December 1999, giving an uplift in excess of £500,000 per
annum.  The rental level of  £160 per m2 has substantial
reversionary prospects.


Sales

During the first half, eight investment properties were sold
for a net consideration of £38.3 million at an exit yield of
6.7%.  The most significant sale was Elliot House, Victoria,
SW1.  Having owned the property for a number of years and
obtained planning permission for redevelopment which could not
commence before 2002, we sold the property for £16.25 million
enabling us to benefit from the improved planning position
without having to incur development risk.  Four provincial
properties were sold, including three from the MEPC portfolio
acquired last year.  We have now achieved our sales target of
five properties from this portfolio and retain the core
Central London properties.


Future projects

Against a background of a sound and active letting market, we
are progressing a number of interesting and innovative
schemes.

*    Broadwick House, Soho, W1.  This landmark development,
     comprising 3,025m2, is under construction with completion
     scheduled for Autumn 2000.  With the current strength of
     the Soho letting market, we expect considerable tenant
     interest particularly from the media and communications
     sectors.

*    Greencoat House, Victoria, SW1. The construction of the
     new 980m2 penthouse floor and the transformation of the
     loading bays to 545m2 of usable space, are due to be
     completed in November 1999.  The penthouse floor will
     create some of the most attractive space in Victoria,
     with terraces and extensive views of London.

*    Tower House, Covent Garden, WC2.  Planning permission was
     obtained earlier this year for a part new build and part
     refurbishment scheme, totalling 8,755m2 at this prominent
     location in Covent Garden.  Detailed design is being
     progressed with a view to obtaining vacant possession at
     the end of 2000.

*    Companies House, City Road, EC1.  A comprehensive
     refurbishment will commence next year to provide 16,380m2
     of offices with large, open plan floors.  The scheme
     involves creating a new identity for the building, which
     is to be re-named Oliver's Yard, EC2.  Works will include
     a central courtyard entrance and new service cores.  It
     is anticipated the first phase of office space will be
     available in mid 2001.


GROUP PROFIT AND LOSS ACCOUNT
                                Half yr   Half yr      Year
                                     to        to       to
                                30.6.99   30.6.98  31.12.98
                     Notes           £m        £m        £m
Gross
rental
income:

Group &
share of
joint
ventures                           14.4      13.7      29.0

Share of
joint
ventures                           (0.1)     (0.2)     (0.3)
                                   ----      ----      ----
Group
Gross
Rental
income                             14.3      13.5      28.7

Property
Outgoings
net of
recoveries                2        (1.6)     (1.5)     (2.6)
                                   ----      ----      ----
Net revenue
from
properties                         12.7      12.0      26.1

Profit from
Property
trading                   3         0.2       -         -

Administrative
costs                              (2.0)     (1.5)     (3.3)
                                   ----      ----      ----
Operating
profit from
continuing
operations                         10.9      10.5      22.8

Share of
Operating
results of
joint ventures                      0.2       0.1       0.3

Profit on
disposal of
investment
properties                4         5.2       -         0.3
                                   ----      ----      ----
                                   16.3      10.6      23.4
Interest
receivable                          -         -         0.1

Interest
payable                   5        (5.5)     (6.0)    (12.9)
                                   ----      ----      ----
Profit
Before
taxation                           10.8       4.6      10.6

Taxation                           (1.5)     (1.0)     (2.1)
                                   ----      ----      ----
Profit
attributable
to ordinary
shareholders                        9.3       3.6       8.5

Dividend                  6        (1.3)     (1.1)     (3.8)
                                   ----      ----      ----
Retained
profit                    9         8.0       2.5       4.7
                                   ----      ----      ----
Adjusted
Earnings
per share                 7         8.87      7.02     15.65p

Adjustment
for disposal
of investment
properties                          8.62      -         0.60p
                                   ----      ----      ----
Basic
Earnings
per share                 7        17.49      7.02     16.25p

Adjustment
for dilutive
share
options                            (0.03)    (0.03)    (0.05)p
                                   ----      ----      ----
Diluted
Earnings
per share                 7        17.46      6.99     16.20p
                                   ----      ----      ----

Dividend
per share                 6         2.35p     2.20p     7.20p


GROUP BALANCE SHEET

                                      30.6.99   31.12.98
                           Notes           £m         £m
Fixed
assets:
Tangible
assets                         8        454.5       472.3
                                         ----        ----
Investments
in joint
ventures:
Share of
gross assets                              2.8         2.8

Share of
Gross
liabilities                              (3.0)       (3.0)
                                         ----        ----
                                         (0.2)       (0.2)
                                         ----        ----
                                        454.3       472.1
                                         ----        ----
Current
assets:
Properties
held for
resale                                    3.1         2.6

Debtors                                   7.6         6.7
                                         ----        ----
                                         10.7         9.3
Creditors:
Amounts
falling due
within 1 year

Bank loans
& overdrafts                             (1.0)       (0.5)

Other current
liabilities                             (20.9)      (19.2)
                                         ----        ----
Net
current
liabilities                             (11.2)      (10.4)
                                         ----        ----
Total
Assets
less current
liabilities                             443.1       461.7

Creditors:
Amounts
falling
due
after more
than 1 year

Bank loans                              (82.0)     (108.5)

10 1/8%
First
Mortgage
Debenture
Stock 2019                              (34.3)      (34.3)
                                         ----        ----
                                        326.8       318.9
                                         ----        ----
Capital &
Reserves
- equity                       9

Called up
share capital                             2.6         2.6

Share
Premium
account                                 153.6       153.2

Revaluation
reserve                                 133.4       138.1

Capital
Reserve
arising on
consolidation                             0.7         0.7

Profit &
loss account                             36.5        24.3
                                         ----        ----
                                        326.8       318.9
                                         ----        ----

Gearing                                  35.9%       44.9%


GROUP CASH FLOW STATEMENT

                              Half yr   Half yr      Year
                                   to        to       to
                              30.6.99   30.6.98  31.12.98
                      Notes        £m        £m        £m
Net cash
inflow from
operating
activities               10      10.5      13.4      24.0

Net cash
outflow
from
return on
investments
& servicing
of finance                       (5.7)     (5.3)    (12.0)

Taxation
paid                             (0.3)     (0.2)     (2.0)

Net cash
inflow/
(outflow)
from capital
expenditure
& financial
investment                       23.8    (124.6)   (112.9)

Equity
Dividends
paid                             (2.7)     (2.4)     (3.5)
                                 ----      ----      ----
Cash
inflow/
(outflow)
before
management
of liquid
resources
& financing                      25.6    (119.1)   (106.4)
                                 ----      ----      ----

Financing
Net
Proceeds
of share
issue                             0.4      53.4      53.4

Movement
in bank
loans                           (26.5)     67.0      54.0
                                 ----      ----      ----
Net
Cash
(outflow)/
inflow
from
financing                       (26.1)    120.4     107.4
                                 ----      ----      ----

(Decrease)/
increase
in cash
in the
period                           (0.5)      1.3       1.0
                                 ----      ----      ----


GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

                              Half yr   Half yr      Year
                                   to        to       to
                              30.6.99   30.6.98  31.12.98
                                   £m        £m        £m
Profit
for
Financial
year                              9.3       3.6       8.5

Unrealised
surplus on
revaluation
of
investment
properties                        -         -        47.0

Unrealised
surplus on
revaluation
of
joint
ventures'
investment
properties                        -         -         0.2

Taxation on
Realisation
of property
revaluation
gains of
previous years                   (0.5)      -         -
                                 ----      ----      ----
                                  8.8       3.6      55.7
                                 ----      ----      ----
Notes


1.   The results for the six months ended 30th June 1999
   include those for the holding company and all of its
   subsidiary undertakings, together with the group's share of
   the results of its joint ventures.  During the period, the
   group adopted FRS15, Tangible Fixed Assets.  This had no
   effect on previously reported profits or reserves.  Except as
   noted above, the results are prepared on the basis of the
   accounting policies set out in the 1998 financial statements.

2.   Property outgoings net of recoveries

                          Half yr     Half yr        Year
                               to          to         to
                          30.6.99     30.6.98    31.12.98
                               £m          £m          £m

Ground
rents                         0.4         0.3         0.8

Other
property
Outgoings
net of
recoveries                    1.2         1.2         1.8
                             ----        ----        ----
                              1.6         1.5         2.6
                             ----        ----        ----

2.   Profit from property trading

                          Half yr     Half yr        Year
                               to          to         to
                          30.6.99     30.6.98    31.12.98
                               £m          £m          £m

Sales                         0.9         -           -

Cost of
sales                        (0.7)        -           -
                             ----        ----        ----
                              0.2         -           -
                             ----        ----        ----

4.   Profit on disposal of investment properties

                          Half yr     Half yr        Year
                               to          to         to
                          30.6.99     30.6.98    31.12.98
                               £m          £m          £m

Disposals                    38.3         -          18.2
Cost/
valuation                   (33.1)        -         (17.9)
                             ----        ----        ----

Group
Profit
on disposal
of
investment
properties                    5.2         -           0.3

Permanent
Diminution
in value
of
investment
property                      -           -          (0.3)
                             ----        ----        ----
                              5.2         -           -
Share of
Joint
ventures'
profit on
disposal
of
investment
properties                    -           -           0.3
                             ----        ----        ----
                              5.2         -           0.3
                             ----        ----        ----

5.   Interest payable

                          Half yr     Half yr        Year
                               to          to         to
                          30.6.99     30.6.98    31.12.98
                               £m          £m          £m

Group                         5.3         5.8        12.5
Share
of
joint
ventures                      0.2         0.2         0.4
                             ----        ----        ----
                              5.5         6.0        12.9
                             ----        ----        ----

6. Dividend
   The interim dividend will be paid on 8th November 1999 to
   those shareholders on the register at the close of
   business on 22nd October 1999.

7. Earnings per share
   Basic earnings per ordinary share have been computed on
   the basis of profit after taxation of £9,259,000 (1998
   interim - £3,631,000; 1998 full year - £8,507,000) and the
   weighted average number of ordinary shares in issue during
   the period of 52,937,000 (1998 interim - 51,762,000; 1998
   full year - 52,345,000).

   The adjusted earnings per share figure has been calculated
   using a profit figure of £4,694,000 (1998 interim -
   £3,631,000; 1998 full year - £8,191,000).  These figures
   exclude the profit after tax arising from the disposal of
   investment properties in order to show the recurring
   element of the group's profit.

   The diluted earnings per share figure has been calculated
   based on a weighted average number of shares of 53,015,000
   (1998 interim - 51,927,000; 1998 full year - 52,496,000)
   which includes the number of dilutive share options
   outstanding at the year-end.

8. Tangible assets
   The group's investment properties and those owned by its
   associate companies are included at their 31st December
   1998 valuation, adjusted for subsequent additions and
   disposals.

9.   Capital and reserves

                         Share                     Profit
                 Share   prem-  Revalu-    Other   & loss
               capital     ium    ation reserves      a/c
                           a/c  reserve
                    £m      £m       £m       £m       £m

At
1/1/99               2.6   153.2    138.1      0.7     24.3

Premium
on
Issue
of shares            -       0.4      -        -        -

Profit
realised
on
disposal
of
investment
properties           -       -       (4.7)     -        4.7

Tax
attributable
to
revaluation
surplus
realised
on disposal
of
investment
properties           -       -        -        -       (0.5)

Retained
profit
for the
6 months             -       -        -        -        8.0
                    ----    ----     ----     ----     ----
At
30/6/99              2.6   153.6    133.4      0.7     36.5
                    ----    ----     ----     ----     ----

10.  Reconciliation of operating profit to net cash inflow
   from operating activities

                    Half yr     Half yr        Year
                         to          to         to
                    30.6.99     30.6.98    31.12.98
                         £m          £m          £m
Operating
profit                   10.9        10.5        22.8

Depreciation
charge                    0.1         -           0.1

(Increase)/
decrease
in debtors               (0.9)        2.2        (0.8)

Increase
in creditors              1.3         1.0         2.9

(Increase)
in
properties
held for
resale                   (0.5)        -           -

Effect
of other
deferrals
& accruals
on operating
cash flow                (0.4)       (0.3)       (1.0)
                         ----        ----        ----
Net cash
Inflow
from
operating
activities               10.5        13.4        24.0
                         ----        ----        ----

11.  Reconciliation of net cash flow to movement in net debt

                    Half yr     Half yr          Yr
                         to          to         to
                    30.6.99     30.6.98    31.12.98
                         £m          £m          £m

Decrease/
(increase)
in cash
in the
period                    0.5        (1.3)       (1.0)

Cash
(outflow)/
inflow
from
movement
in debt
financing               (26.5)       67.0        54.0

Amortisation
of
discount
& costs
on issue
of
debenture                 -           0.1         0.1
                         ----        ----        ----
Movement
in net
debt
in the
period                  (26.0)       65.8        53.1

Net
debt
At
Start
of period               143.3        90.2        90.2
                         ----        ----        ----
Net debt
at
end of
period                  117.3       156.0       143.3
                         ----        ----        ----

12.This statement does not comprise statutory accounts as
   defined in Section 240 of the Companies Act 1985.

   The financial information for the year ended 31st December
   1998 is an extract from the latest group accounts. The
   accounts received an unqualified auditor's report and have
   been filed with the Registrar of Companies.  The results
   for the half years ended 30th June 1998 and 1999 are
   unaudited.

13.Copies of this announcement are being posted to
   shareholders on 6th October 1999 and are available from
   the Company Secretary, Derwent Valley Holdings plc, 87
   Wimpole Street, London, W1M 7DB.