Interim Results

Peel Hldgs PLC
21 December 2001

                             Peel Holdings p.l.c.

                             Chairman's Statement

Results

Profit on ordinary activities before taxation for the six months ended 30th
September 2001 fell to £11.15m (2000: £20.53m). The decrease was largely due
to reduced profits from the disposal of fixed assets which fell to £4.14m
compared with the exceptional £16.57m in the previous year. Total net rental
income for the Group for the period was £48.36m (2000: £48.42m).

Profit on ordinary activities after taxation decreased by 31.6% to £10.24m
(2000: £14.98m) to give diluted earnings per ordinary share of 15.16p
(2000: 21.64p). The Board has declared an interim dividend of 4.8p per
ordinary share (2000: 4.8p). This will be paid on 8th April 2002 to ordinary
shareholders on the register at the close of business on 8th March 2002.

Property

The threat of economic recession was obvious to the UK commercial property
market during 2001. Consequently, there was a noticeable reduction in the
number of new occupier enquiries and market transactions as investors and
businesses became more cautious. Nevertheless, due to active management of the
Group's improving property portfolio, the rent roll increased at the half year
by £1.61m on an annualised basis.

New lettings of void units generated annualised rental income of £2.48m
compared with £0.44m per annum lost due to new vacancies. Rent reviews and
lease renewals produced additional annualised rental income of £0.87m, the
majority of which came from rent reviews in the Group's retail park portfolio.
New investments from the Group's development and acquisition programme
contributed £0.53m per annum of rental income and properties sold during the
period resulted in lost rental income of £1.03m per annum. The continuing
sales programme of mainly secondary property resulted in three disposals
producing capital receipts of £12.07m with a profit of £1.71m above book
value. Units with an annualised rental value of £1.94m excluding overseas
property stood empty at the half year end compared with £3.75m at 1st April
2001.

The property development team continued to add value to the Group by
generating a profit of £2.41m from the sale of development land and
constructing the Alexandra building, a 60,000 sq.ft. office development
located in Salford Quays, a 120 bedroom Tulip Hotel located near to The
Trafford Centre and a 34,000 sq. ft. retail warehouse development at
Altrincham. Construction is underway on a 55,000 sq. ft. retail warehouse
development at Blackburn, which has been pre-let to Matalan and Staples, and
on two small fast food restaurants for McDonalds at the Group's retail parks
in Washington, Tyne & Wear and Edinburgh.

Planning applications were also submitted to extend the Group's retail
parks at Edinburgh, Stockport and Yeovil and agreement reached to acquire a
new 45,000 sq.ft. retail warehouse adjacent to the Group's Stockport retail
park, which is to be occupied by Matalan.

Housing land sales to 30th September 2001 totalled £0.72m. A number of
further sales have also been agreed with national housebuilders for sites at
Tyldesley, Wigan and Irlam, which are expected to be completed before the end
of the financial year. The Group received (subject to the completion of a
planning agreement) planning approval for a seven acre development at
Stretford in Trafford, comprising a new marina on the Bridgewater Canal,
waterside homes and apartments and a public house. The Group also appeared at
a public inquiry in support of its proposal for a Motorway Service Area at
Woolston near Warrington adjacent to Junction 21 of the M6. Other developers
promoted alternative schemes at Junctions 20 and 22. A decision is expected
some time in 2002.

In order to promote the Manchester Ship Canal corridor as a focus for regional
regeneration the Group appeared at the Public Examination into North West
Regional Planning Guidance in February 2001. The Panel, albeit not adopting
the Group's wording, has confirmed a heightened role for the Mersey Belt
between Manchester and Liverpool.

Two new waste recycling centres were promoted by the Group, with planning
permission granted for one whilst a second was refused. Gate prices at
landfill sites for disposal of waste appear to be recovering slowly and output
from the Group's quarries this year has increased. Although income in the
first half of the year was lower at £263,000, this will rise materially in the
second half with the settlement of two outstanding claims.

The Trafford Centre

Footfall and trade continue to grow. Visitor numbers are up on the first six
months of last year by approximately 6% and most retailers at the Centre are
reporting average increases in trade of around 15%. At the half year end, the
annualised rent roll stood at £49.81m and turnover rents produced £1.38m for
the six month period.

The arrival of Marks & Spencer (in place of C&A) and the new Next Home Store
has improved the attractiveness of Peel Avenue and changes in the Festival
Village have helped to draw trade to that end of the Centre. Work is currently
underway in the remaining space at the cinema level which will result in the
opening next Easter of an imaginative animated childrens' ride. The
introduction of new names and offerings within the Centre and complementary
uses around it are an essential part of keeping the Centre ahead of the
competition, building customer loyalty and widening its appeal.

The planning application for a retail warehouse proposal on a site known as
Giants Field adjacent to the Centre was approved by the Secretary of State on
19th December 2001. This will have a direct bearing on the Group's ability to
help fund a new Metrolink line to the Centre which is currently out to tender.

A planning application has also been submitted for the development of a new
aquarium on part of the land adjacent to the Centre but other larger scale
schemes are on hold pending further evaluation of the highway capacities,
particularly in the light of the completion of the M60 orbital motorway which
has eased congestion on this part of the network.

Port

With an increase in the level of both bulk liquids and dry cargoes handled
through the Port, tonnage overall increased during the half year to 4.13m
tonnes (2000: 3.89m tonnes). This generated a much improved operating profit
of £1.84m (2000: £1.18m). After a difficult first half in the previous year,
the dry cargo operation at Ellesmere Port saw a significant increase in
throughput with tonnage rising by 90%. With problems in the glass industry
affecting users of the docks, the operation at Runcorn experienced a drop in
tonnage after the improved performance last year. Despite this, further
investment was made in a new 19,000 sq.ft. bulk storage warehouse which was
completed in the first half of the year.

A continuing improvement in the import of grain to the Upper Reaches of the
Canal, Runcorn to Manchester, contributed to an increase in tonnage in this
section of the operation to 0.57m tonnes (2000: 0.51m tonnes). After a flat
previous year, the independent bulk liquid storage facilities saw a rise in
the throughput with new business destined for the retail motor sector being
attracted through the specialist oil dock at Eastham. Movements of liquid
cargo to the Canalside production units remained strong although there is
concern whether this can be sustained.

Airports

Although the combination of terrorist attacks in the United States on 11th
September and less favourable economic conditions have had a significant
effect on the aviation industry, the short haul 'low cost' European scheduled
services have been largely unaffected. However, freight and summer season
charter flights are more vulnerable and any lasting downturn will have an
impact if charter airlines pull back to the major airport hubs. Passenger
figures at Liverpool Airport for the half year remained buoyant, with easyJet
continuing to attract increasing numbers of passengers to fly from its North
West base mainly to European destinations. The outlook remains encouraging, with
a record (2.3 m) passenger throughput at Liverpool expected by the calendar year
end (2000: 2.0 m).

Turnover from the Airport's operations for the half year, covering the peak
summer season, was £8.19m (2000: £6.61m), producing an adjusted operating
profit of £0.34m (2000: £0.75m). Operational costs included a one-off payment
of £0.65m to NCP following the transfer of the management of the car park
in-house. The underlying improvement is a consequence of increasing
contributions from aeronautical activity, concessions and property lettings as
the Airport expands. The construction of a new control tower is nearing
completion and a new 3m passenger terminal building costing £32.5m will be
fully open by early summer 2002; both projects have attracted European
Regional Development Fund support. Additional terminal capacity and
infrastructure is proposed, with a planning application recently submitted to
enable the Airport to achieve its current forecast throughput of 4.5m
passengers by 2006.

In July 2001, it was announced that the Airport will be renamed and rebranded
'Liverpool John Lennon Airport' from the opening of the new terminal. This has
been very well received by the scheduled and charter airlines.

Following the decision by the Secretary of State to call in the Group's
planning application for the redevelopment of RAF Finningley as a commercial
airport, a public inquiry into the proposal commenced on 25th September 2001.
It is due to last until March 2002. The application has the support of the
local authority Doncaster MBC and a local community group Finningley Locals
say Yes, who have collected over 40,000 letters of support. Objectors
presenting at the inquiry include a consortium of airports, Friends of the
Earth and residents groups. A number of third parties have appeared at the
inquiry to speak in favour of the scheme and in addition many local companies
and community groups have written in to support.

In August 2001, the Group acquired a 50% interest in Sheffield City Airport
Limited in order to develop more cohesively a strategy for aviation in South
Yorkshire. The Airport has lost some scheduled traffic since the events of
11th September but it has particular potential in the general and business
aviation market.

Finances

Group borrowings at 30th September 2001 stood at £866.51m compared to £845.01m
at 31st March 2001. Gearing at the half year remained steady at 113.5%,
compared with 111.5% at 31st March 2001. Net interest payable was £36.44m
(2000: £34.41m).

Future

We continue to focus on sectors which offer growth and opportunity. Provided
there is no significant worsening in the economic and investment environment
in those areas in which we operate, we should continue to make progress.

John Whittaker

Chairman

21st December 2001


Unaudited Group Profit and Loss Account
for the half year ended 30th September 2001


                                          6 months to          6 months to
                                       30th September       30th September
                                                 2001                 2000
                                 Note           £'000                £'000

Turnover                            1          74,609               70,167

Operating profit before 
exceptional item                               45,022               42,967

Exceptional item                    2               -              (4,603)

Operating profit after 
exceptional item                               45,022               38,364

Profit on disposal of 
fixed assets                                    4,140               16,574

                                               49,162               54,938

Share of operating losses of 
associated undertakings                          (37)                    -

Goodwill amortisation 
- associated undertakings                     (1,539)                    -

Profit on ordinary activities 
before interest and taxation                   47,586               54,938

Net interest payable                         (36,440)             (34,413)

Profit on ordinary activities 
before taxation                                11,146               20,525

Tax on profit on ordinary activities            (903)              (5,542)

Profit on ordinary activities 
after taxation                                 10,243               14,983

Minority interests                               (55)                1,035

Profit for the financial period                10,188               16,018

Dividends                                     (3,349)              (2,542)

Retained profit for the 
financial period
transferred to reserves                         6,839               13,476

Earnings per ordinary share      3

Basic earnings per ordinary 
share 1                                         5.80p               22.58p

Diluted earnings per ordinary share            15.16p               21.64p



Unaudited Group Cash Flow Statement
for the half year ended 30th September 2001

                                          6 months to          6 months to
                                       30th September       30th September
                                                 2001                 2000
                              Note              £'000                £'000

Cash flow from operating 
activities                   4 (a)             35,430               31,831

Returns on investments and 
servicing of finance         4 (b)           (41,156)             (35,574)

Taxation                                        5,182                (383)

Capital expenditure and 
financial investment         4 (c)           (13,791)               20,041

Acquisitions and disposals   4 (d)            (5,494)                    -

Equity dividends                              (2,982)              (2,693)

Cash flow before use of  
liquid resources and financing               (22,811)               13,222

Management of liquid resources                  1,015               81,291

Financing                    4 (e)             16,389            (105,877)

Decrease in cash in the period                (5,407)             (11,364)



Reconciliation of Cash Flow to movement in Net Debt

                                           6 months to         6 months to
                                        30th September      30th September
                                                  2001                2000

                                 Note            £'000               £'000

Movement in cash in the period      5          (5,407)            (11,364)

Cash movement from management 
of liquid resources                 5          (1,015)            (81,291)

Net movement in debt due 
within one year                     5         (15,428)             (5,456)

Net movement in debt due after 
more than one year                  5              730                (88)

Translation and other non-cash 
adjustments                         5            (382)                 705

Change in net debt in the period              (21,502)            (97,494)

Net debt at 1st April 2001/
1st April 2000                               (845,010)           (743,180)

Net debt at 30th September 2001/
30th September 2000                          (866,512)           (840,674)


Notes to the Interim Results for the half year ended 30th September 2001

1. Turnover

Certain categories of operating income have been re-classified as turnover for
the half year to 30th September 2001. The previous periods figures have been
restated on a similar basis in order to provide a more meaningful comparison.

2. Exceptional Item

The exceptional item of £4,603,000 in the half year to 30th September 2000
represented expenditure on an aborted scheme at Liverpool Airport.

3. Earnings per Ordinary Share

The calculation of earnings per ordinary share is based on a profit after tax
and minority interests of £9,823,000 (2000: £15,573,000) and on 62,173,605
ordinary shares (2000: 68,980,858) being the weighted average number of ordinary
shares in issue during the period ended 30th September 2001. The weighted 
average number of ordinary shares used in the calculation of diluted earnings 
per ordinary share is 67,188,075 ordinary shares (2000: 74,022,891). This has 
been adjusted for the effect of potentially dilutive share options under the 
Group's share option scheme and the conversion of all the 5.25% convertible 
cumulative non-voting preference shares of £1 each.

An adjusted earnings per share figure for 2000 has been calculated in addition
to the earnings per share required by FRS 14 and is based on earnings
excluding the effect of the exceptional item detailed in note 2. It has been
calculated to allow shareholders to gain a clearer understanding of the
performance of the Group. Details of the adjusted earnings per share are set
out below:


                                       Basic     Diluted      Basic    Diluted
                                        2001        2001       2000       2000
                                           p           p          p          p

Earnings per ordinary share (FRS 14)   15.80       15.16      22.58      21.64

Add back effect of exceptional item 
(note 2)                                   -           -       5.07       4.72

Adjusted earnings per ordinary share   15.80       15.16      27.65      26.36



4. Notes to the Cash Flow Statement
                                                6 months to        6 months to
                                             30th September     30th September
                                                       2001               2000
                                                      £'000              £'000

(a) Cash flow from operating activities

Operating profit                                     45,022             38,364

Non-cash adjustments                                  2,680              6,635

Movement in stocks                                  (3,880)            (2,513)

Movement in debtors                                 (7,273)           (12,244)

Movement in creditors                               (1,119)              1,589

                                                     35,430             31,831



(b) Returns on investments and servicing of finance

Interest received                                     3,984              6,479

Interest paid (including capitalised)              (40,502)           (37,093)

Finance lease interest paid                           (173)              (182)

Non-equity dividends paid                             (365)              (847)

Other costs of finance                              (4,100)            (3,931)

                                                   (41,156)           (35,574)



Notes to the Interim Results continued

4. Notes to the Cash Flow Statement continued

                                                6 months to        6 months to
                                             30th September     30th September
                                                       2001               2000
                                                      £'000              £'000

(c) Capital expenditure and financial investment

Purchase of fixed assets                           (33,509)           (20,584)

Sale proceeds from fixed assets                      22,336             40,625

Loans to associated undertakings                    (2,618)                  -

                                                   (13,791)             20,041



(d) Acquisitions and Disposals

Purchase of minority interest in 
subsidiary undertaking                              (2,400)                  -

Purchase of interests in associated 
undertakings                                        (3,094)                  -

                                                    (5,494)                  -



(e) Financing

Shares issued                                             -                 32

Purchase of own shares                                    -          (112,000)

Movement in loans                                    14,698              5,544

Grants received                                       1,691                547

                                                     16,389          (105,877)



5. Analysis of Movement in Group Net Debt


                             1st April     Cash     Exchange/    30th September
                                  2001     Flow         Other              2001
                                 £'000    £'000         £'000             £'000

Cash at bank and overdrafts    167,993   (6,422)        (393)           161,178

Debt due within one year
(excluding overdrafts)        (24,268)  (15,428)           11           (39,685)

Debt due after more than
one year                     (988,735)       730            -          (988,005)

                             (845,010)  (21,120)        (382)          (866,512)



6. Interim Results

The unaudited results for the half year ended 30th September 2001 do not
comprise full financial statements within the meaning of the Companies Act 1985.
They have been prepared having regard to the guidance in the ASB statement 
'Interim Reports', and on the basis of the accounting policies set out in the 
Group's audited financial statements for the year ended 31st March 2001, except 
that no summarised balance sheet has been produced. In the opinion of the 
Directors a summarised balance sheet would provide little additional information
to that already contained in the Unaudited Group Profit and Loss Account and the
Unaudited Group Cash Flow Statement.

Copies of this interim report will be despatched to shareholders by post.
Further copies may be obtained from the Company Secretary, Peel Holdings
p.l.c., Peel Dome, The Trafford Centre, Manchester M17 8PL.