Results for the six months ended 30 September 2012

RNS Number : 9444R

Quintain Estates & Development PLC

26 November 2012

Quintain Estates and Development PLC

("Quintain" / "Company" / "Group")

Results for the six months ended 30 September 2012

Quintain Estates and Development PLC today announces its Interim results to 30 September 2012.

KEY POINTS:

· Repositioning of the Company underway, with a primary focus on London

· Balance sheet being strengthened, with £70m net debt reduction to date and further maturity

extensions

· Company committed to reducing net debt to sub-£400m by 31 March 2014

· Momentum building at Greenwich with enhanced MoU and planning applications for 500 homes submitted,

and at Wembley with Phase One of development (1.8m sq ft) on schedule to complete next year

HIGHLIGHTS OF THE PERIOD:

The newly appointed management team is repositioning the Company to be a leading London development and investment specialist. The team has improved the pace of delivery on the major regeneration schemes and is strengthening the Company's financial position.

At Greenwich, the new Knight Dragon joint venture, which was announced in June, is already driving momentum on the scheme, on which outline consent is held by Quintain for, inter alia, 10,000 homes. The Company announces today an enhanced Memorandum of Understanding with the Greater London Authority regarding 11 initial residential plots, which will deliver 2,870 homes. Detailed planning applications regarding 506 of these homes, on three plots, have been submitted and a decision is expected in February.

At Wembley, the Hilton hotel and student accommodation scheme opened this summer and construction of the London Designer Outlet ("LDO") is on track for the shopping centre to open next autumn. This opening will mark the completion of the 1.8 million sq ft first phase of development on the 8.5 million sq ft Wembley scheme. The LDO has been boosted during the period by the completion of the line-up of anchor tenants and a range of food & beverage lettings. A new letting to LK Bennett is announced today.

The balance sheet has been strengthened during the period with net debt reduced by £70 million to £465 million as a result of £145 million of capital recycling. Maturities on a further £85 million of bank facilities extended, providing additional financial flexibility over the medium term.

FINANCIAL HIGHLIGHTS

Income Statement	Six months ended 30 September 2012	Year ended 31 March 2012	Six months ended 30 September 2011
Gross profit (£m)	15.3	24.9	14.0
Adjusted profit before tax (£m)¹	4.3	5.8	3.3
Loss before tax (£m)	(29.1)	(43.5)	3.7
Earnings per share (pence):
Basic	(4.3)	(6.8)	0.8
Adjusted diluted (EPRA)	0.1	0.3	0.9

¹Adjusted for capital and revaluation movements and trading property provisions.

Balance Sheet	At 30 September 2012	At 31 March 2012	At 30 September 2011
Net debt (£m)	(465.2)	(535.0)	(533.7)
Bank gearing	78%	87%	79%
Basic net asset value per share (pence)	106	110	116
EPRA net asset value per share (pence)	109	116	126

Max James, Chief Executive of Quintain, said:

"We are repositioning Quintain to become a leading London development and investment specialist, supported by robust recurring income from the asset management business. We are making material progress towards creating a capital structure that complements our assets through the de-leveraging of the balance sheet, introducing new capital and developing new income streams. Our focus is now firmly on driving delivery at our two outstanding London schemes.

"Our objective over the next eighteen months is to reinforce the financial platform and transform the operational delivery of the Company. This will enable us to deliver value for shareholders in the years ahead."

Meeting and conference call

A meeting for analysts and institutional investors will take place today at 09.00 at the City Marketing Suite, Guildhall, 80 Basinghall Street, London, EC2V 5AR. The meeting can also be accessed via a conference call dial in facility, using the following details:

Dial in number: +44 (0) 20 3059 8125

Password: Quintain

In addition, a live webcast of the presentation will be available on the Company's website at www.quintain.co.uk.

For further information, please contact

Quintain Estates and Development PLC RLM Finsbury

Cressida Curtis Jenny Davey

Tel: +44 (0)20 7495 8968 Tel: +44 (0)20 7251 3801

Chief Executive's Statement

1. Overview

In May 2012, the Board appointed a new team of executive directors to re-position Quintain and lead the next phase of the Company's growth. To achieve our objective of delivering and maximising the value inherent in our portfolio, we are sharpening the focus of the Company, improving operational delivery and implementing a strategy through which we are confident of creating substantial value for shareholders.

The strategy will position Quintain as a leading property development and investment specialist with a primary focus on London. We are allocating resources to capitalise on London's position as a global city through our major regeneration schemes, while ensuring the Group is appropriately supported by recurring income from investment in specialist sectors.

We are in the process of developing two large London urban regeneration sites, Greenwich Peninsula and Wembley, which represent over two-thirds of our assets by value. Combined, these assets benefit from outline planning consents for over 22 million sq ft of development and have the potential to deliver circa 15,000 residential units and 7.5 million sq ft of commercial space.

Through the development of these sites, Quintain will create two new and exciting districts in which Londoners can work, be entertained and live, as well as deliver strong returns to our shareholders.

In addition to these development assets, Quintain acts as property adviser on £2.2 billion of assets which are principally in three funds, comprising iQ (student accommodation), Quercus (healthcare) and WELPUT (West End offices). These funds provide a balance of income for the Group and have performed well in their respective markets.

2. Results

We are pleased to report that, in the six months to 30 September 2012, the Company delivered a £1.1 million increase in adjusted pre-tax profit, to £4.3 million, compared with the same period last year. This demonstrates the growing strength of the business, with an emphasis on income generation and cost control.

Reflecting the wider UK economic environment, the portfolio experienced an overall 1.7 per cent. reduction in gross assets to £1.1bn, principally driven by falls in the value of secondary assets.

Due to the gearing effect, the net asset value fell over the period by 3.8 per cent. from £572.0 million to £550.5 million, equivalent to 106p per share (March 2012: 110p).

3. Delivery

a) Greenwich

The development opportunity at Greenwich has been transformed by the establishment in the period of the 40:60 joint venture with Knight Dragon, the private investment vehicle of Dr Henry Cheng Kar-Shun. The joint venture has the benefit of a £300 million financing facility provided by Knight Dragon which will now fully-fund the roll-out of development.

This partnership is already delivering positive results, with a full review of the opportunity completed and agreement of an enhanced development strategy. We announce today that we have now agreed with our public sector stakeholders an enhanced Memorandum of Understanding regarding the delivery and composition of 11 initial residential plots that enable the joint venture to accelerate the delivery of approximately 2,870 of the 10,000 homes for which we hold outline consent. As a result of this agreement, we have also submitted detailed planning applications for the first three plots, comprising 506 homes, which will be considered by the Planning Committee next February. We anticipate marketing the first homes within the next twelve months.

b) Wembley

Over the last six months, Wembley has also progressed well, particularly through the opening of the 4-star Hilton Hotel and the adjacent student accommodation scheme. Completion of the 250,000 sq ft (NIA) London Designer Outlet centre ("LDO") remains on schedule to take place in less than twelve months' time. The opening of the LDO will mark the completion of the first 1.8 million sq ft phase of this four-phase scheme and, importantly, position Wembley as a unique and exciting retail and leisure destination, together with the existing National Stadium and Wembley Arena. Contracts for 52 per cent. (by base rent) of space within the LDO are now exchanged or in solicitors' hands and a further 13.4% are under negotiation. We have also completed the line-up of anchor retailers and signed the first aspirational retail brands. Construction is well advanced, with steel work in place.

c) Asset Management

With the acquisition of Grafton Advisors earlier this year, we now advise on three high quality portfolios of scale, namely iQ, Quercus and WELPUT, with a combined gross asset value in excess of £2.0 billion. Quintain co-invests in iQ and Quercus, with our share of profits from these two vehicles being £8.0 million for the period under review (September 2011: £6.2 million). In addition, asset management activities have delivered £3.0 million of fees to the Company during the period, predominantly from the three main funds.

4. Finance

We are making significant progress in creating a capital structure which complements our assets and their inherent potential, in de-leveraging the balance sheet and by introducing a new partner and capital provider at Greenwich.

In addition to seeking to reduce the amount of leverage on the balance sheet, we are actively managing our debt maturities. During the period we extended £85 million of maturities with three of our lenders and reduced our net debt from £535 million to £465 million. We have now set an initial target debt level of sub-£400 million by 31 March 2014, which will strengthen the financial platform from which Quintain operates.

5. Management

During the period, in addition to my own appointment as Chief Executive, there were material changes at Board level. Richard Stearn, who joined Quintain in January from the Berkeley Group, was promoted to Finance Director. Nigel Kempner, who has 35 years' experience in the industry and is a founding partner of Grafton Advisors, was appointed Executive Director, bolstering the property experience at a senior level. Rebecca Worthington resigned from the Board having been with the Company for 14 years, 11 of them as Finance Director. Becky made an immense contribution to the Company and we wish her well in the next stage of her career.

6. Outlook

The priorities of the new management team are clear: we will continue to bring greater structure and clarity to the business; we will sharpen our focus on London; we will ensure delivery at Greenwich and Wembley; we will seek to increase income generation from our investment activities; and we will progressively and permanently reduce the level of debt through the orderly disposal of non-core assets and the judicious introduction and use of third party capital.

Our objective over the next eighteen months is to reinforce the financial platform and transform the operational delivery of the Company. This will enable us to deliver returns for shareholders in the years ahead.

We remain aware of the difficult economic environment, but also the overwhelming demand for new residential accommodation and quality leisure and retail facilities in London. This is why our core strategy is to continue to develop both Greenwich and Wembley, bringing in new capital where appropriate whilst reducing long term debt.

Despite some small reductions in valuations, affected by the current economic conditions, we have reviewed the opportunities in developing out both Greenwich and Wembley over the medium term and are confident that the ultimate profit to be realised from these sites will provide additional value to shareholders.

The management team will continue to work hard streamlining, structuring and focusing efforts to ensure this value is maximised and efficiently delivered.

FINANCE REVIEW

Our immediate objective is to strengthen the financial position of the business to ensure the successful delivery of the strategy. Currently, we therefore have two principal financial priorities: firstly, to reduce net debt and balance sheet gearing materially, whilst still enabling the further development of Wembley, and secondly, to improve underlying earnings growth. Progress has been made on both counts over the first six months of the year. Despite capital expenditure of £49.6 million, net debt has been reduced by £69.8 million to £465.2 million and adjusted pre-tax profit(our measure of recurring profit, which excludes disposals, valuation and mark to market adjustments) increased by £1.0 million to £4.3 million.

In addition to reducing net debt, bank facility extensions regarding £85 million of debt have been secured providing additional financial flexibility over the medium term. Importantly for the future strength of Quintain's balance sheet, the new Knight Dragon joint venture at Greenwich Peninsula secures the future funding for the development of the entire scheme without the need for Quintain to invest further capital. From this point forward, the development will be cash-generative for the Company through the repayment, as the development progresses, of previous investment in infrastructure and land funding. In addition, we will also receive development profits in due course.

New income streams have been secured in the form of the opening of iQ Shoreditch, development management fees at Greenwich Peninsula and additional asset management fees from the Grafton team.

1. Results for the period

Operating profit, before non-current asset sales and revaluation, for the period increased £0.4 million to £3.7 million and Quintain's share of profit from joint ventures rose to £6.7 million, compared to £6.1 million in 2011. Despite these improvements in underlying income, the overall result for the period was a pre-tax loss of £29.1 million (2011: profit of £3.7 million), reflecting a revaluation deficit of £24.6 million and a £9.7 million loss on the disposal of non-current assets. The latter was largely due to the £10.7 million loss that arose on entering into the new joint venture arrangements at Greenwich Peninsula, as identified at the time the transaction was announced in June. Net finance costs fell £0.8 million to £5.2 million and the loss after tax was £22.5 million (2011: profit of £4.2 million), with the benefit of a £6.6 million tax credit (2011: £0.5 million credit).

2. Operating profit before non-current asset sales and revaluation

Before non-current asset sales and revaluation, operating profit has increased from £3.3 million to £3.7 million, compared to the same period last year. Within this movement, gross profit has improved by £1.3 million, from £14.0 million last year to £15.3 million.

Net rental income has fallen from £7.4 million to £6.9 million due to both disposals and refurbishment expenditure. The Plaza Hotel at Wembley contributed £3.0 million of the other income last year but was sold in July 2012 and, hence, the contribution in the current period was reduced. This was more than offset by increased commercialisation income at Wembley, enhanced by the Olympics and the first development management fees from the new joint venture arrangements at Greenwich Peninsula.

Fees from Asset Management have increased from £2.6 million to £3.0 million following the acquisition of Grafton Advisors, strategic property adviser to WELPUT, at the end of last year.

The £0.9 million increase in administrative expenses largely reflects the inclusion of the Grafton team and the increase in the Greenwich team following the establishment of the Knight Dragon joint venture. Both of these increases are more than covered by associated income streams.

Operating profit	30 September 2012			30 September 2011
	Urban Regen- eration	Asset Manag-ement	Total	Urban Regen-eration	Asset Manag-ement	Total
	£m	£m	£m	£m	£m	£m
Net rental income	3.9	3.0	6.9	3.3	4.1	7.4
Trading sales	-	-	-	0.1	-	0.1
Fees from asset management	-	3.0	3.0	-	2.6	2.6
Other income	5.1	0.3	5.4	4.2	0.9	5.1
Trading property provisions	-	-	-	(1.2)	-	(1.2)
Gross profit	9.0	6.3	15.3	6.4	7.6	14.0
Administrative costs	-	-	(11.6)	-	-	(10.7)
Operating profit			3.7			3.3

Quintain conducts a significant proportion of its business through joint ventures. The table below sets out the combined net rental income and demonstrates that the fall in net rental income from owned operations is more than offset by the increase in net rental income from joint ventures.

Net rental income	30 September 2012			30 September 2011
	Urban Regen-eration	Asset Manag-ement	Total	Urban Regen-eration	Asset Manag-ement	Total
	£m	£m	£m	£m	£m	£m
Group net rental income	3.9	3.0	6.9	3.3	4.1	7.4
Share of JV net rental income	0.4	6.6	7.0	0.1	5.5	5.6
Combined net rental income	4.3	9.6	13.9	3.4	9.6	13.0

3. Sales of non-current assets

A progressive disposal programme is underway to release capital to assist in funding the development of Wembley and to reduce overall Group debt.

Sales of non-current assets realised £138.4 million (net of costs) of which £91.6 million was received in cash in the period with the balance deferred, giving rise to a pre-tax loss of £9.7 million. The largest contributor to this was the new joint venture arrangements at Greenwich which had a significant impact on the Group balance sheet as the Group reduced its investment in the site to 40%, as illustrated below:

Impact of the new Greenwich Joint Venture Net assets disposed:		£m
Reduction in investment property		(167.8)
Increase in investment in joint ventures		93.3
Increase in other net assets		1.1
Total non-current assets		(73.4)

Net proceeds:
Cash and cash equivalents		22.2
Deferred receivable		42.1
		64.3
Movement in net assets		(9.1)

Loss from sale of non-current assets		(10.7)
Tax credit on transaction		1.6
		(9.1)

4. Result of Joint Ventures

The Group's share of profits from joint ventures increased to £6.7 million (2011: £6.1 million). The trading profit after interest was £2.8 million, an increase of £1.1 million on the £1.7 million earned in the comparable period last year. This included £1.6m from Quercus (2011: £1.5 million) and £1.2m from iQ (2011: £0.4m). The net revaluation surplus was £5.6 million or £3.9 million after tax (2011: £6.7 million surplus or £4.4 million after tax), reflecting strong capital growth in iQ, which saw the opening of iQ Shoreditch in the period and rental growth across the portfolio.

5. Net Finance Expenses

Net finance expenses decreased from £6.0 million to £5.2 million. Bank interest payable was £8.8 million, a reduction of £0.6 million on the comparable period last year, with the average cost of debt falling to 3.0% (September 2011: 3.2%). The net charge attributable to hedging adjustments on financial instruments decreased from £6.1 million to £5.4 million.

6. Valuation

The valuation of the Group's properties as at 30 September 2012, including our share of gross assets in joint ventures and associates, was £1,108.1 million, a decrease of 1.7%, or £19.1 million on a like for like basis, net of capital expenditure, since 31 March 2012. This reflects the market for secondary property assets and a modest reduction in the value of development land at Wembley.

7. Contractual capital commitments

As at 30 September 2012, the Group's contractual capital commitments of £32.8 million (31 March 2012: £25.0 million) related almost entirely to ongoing construction and infrastructure work at Wembley. Capital commitments within joint ventures were reduced to just £0.2 million from £25.7 million at March with completion of iQ Shoreditch in the period.

8. Cashflow

The cash profit generated from operations before working capital movements amounted to £4.1 million (September 2011: £4.5 million). Net operating income distributed by joint ventures contributed a further £1.5 million (September 2011: £2.0 million). This operating income was offset by net interest payments of £5.0 million (September 2011: £8.4 million) leading to an operational cash surplus of £0.6 million in the first six months of the year (September 2011: deficit £1.9 million).

The disposal programme, together with the refinancing of iQ Shoreditch, which allowed the Group's loan to iQ to be repaid, generated net cash proceeds of £128.1 million (September 2011: £4.7 million). Investment continued on the development pipeline, most notably the completion of student accommodation and the Hilton Hotel at Wembley and construction activity on the London Designer Outlet. £39.3 million was invested in the period together with £10.3 million through joint ventures.

The net cash generated from disposals allowed £67.5 million of borrowings to be repaid during the period with net debt reducing from £535.0 million at March to £465.2 million at the period end.

9. Risk Management

The core risks to the business remain as presented in the Annual Report in May, namely economic risk in relation to real estate valuations, development risk and treasury risks in relation to banking covenants and liquidity. The treasury position is set out in a separate note below.

10. Financing strategy and capital structure

Our financing strategy in the medium term is to manage a level of debt appropriate to the nature and risk profile of the Group's assets. Our financing structure needs to be flexible and cost-effective, taking account of the availability of debt. This has been achieved through securing funding at the corporate level, giving us the scope to fund efficiently all areas of the portfolio which otherwise would be more challenging as well as providing us with liquidity and operational flexibility.

Our initial target is to reduce net debt levels permanently to below £400m by March 2014. In order to give us operational flexibility and the ability to fund the current development pipeline, we have also been actively re-phasing short term maturities in addition to extending debt out to March 2016.

Since we announced our results for the full year in May, we have extended maturities, either directly or through options, on £85 million of debt, comprising a £20 million facility extended from 2014 to 2015, a £35 million facility extended from March 2013 to September 2014 and the removal of £30 million of scheduled facility amortisation.

The extension option on one of our facilities requires further amortisation of £25 million in June 2013. The £403 million of facilities extended to 2016 takes account of this amortisation. The facilities could be subject to further amortisation on the exercise of elections, at the Company's request, to adjust for losses for interest cover purposes.

Debt summary

	Covenant	Period end 30 Sept 2012	Year end 31 March 2012
Net debt		£465.2m	£535.0m
Weighted average debt maturity¹		2.9 years	3.2 years
Weighted average interest rate		3.0%	3.1%
% of debt fixed		69.0%	60.5%
% of debt capped		31.0%	39.5%
Interest cover²	1.25x	12.3x	2.9x
Gearing³	110%	78%	87%
Undrawn committed facilities		£109m	£72m

¹Assumes that Quintain exercises option to extend Lloyds facilities to 2016, which reduces the facilities available by £25 million in 2013.

²Interest cover, per our banking covenants, is defined as operating profit before net finance expenses plus realised surpluses on disposals divided by net finance costs excluding mark to market adjustments. September number is shown on a rolling 12 month basis.

³Gearing, per our banking covenants, is defined as the ratio of net borrowings of the Company and its wholly owned subsidiaries to equity.

11. Financial Outlook

Quintain's financial strength has improved over the period and we will continue to focus on bolstering this solid platform to enable the business to deliver returns for shareholders in the years ahead. Our priorities in the immediate future will therefore remain the permanent reduction of debt to below £400 million, which we intend to achieve by 31 March 2014, and the delivery of further income streams from both the Urban Regeneration and Asset Management businesses.

OPERATING REVIEW

URBAN REGENERATION

1. Overview

Quintain holds outline planning consent for 22 million sq ft of development at Wembley and Greenwich in London, including 15,000 homes across the two schemes.

Our confidence in the future performance of both schemes is underpinned by the significant imbalance between the low rate of delivery of new housing stock in London and the continually increasing demand for homes. Wembley and Greenwich are two of only a small number of large-scale London regeneration schemes and, uniquely, both benefit from planning consent and transport infrastructure already being in place.

With the National Stadium and Arena at Wembley, and The O2 at Greenwich, there are world-famous entertainment venues firmly embedded within both localities that give them a clear identity and location and already attract an estimated 14 million visitors to our sites every year.

2. Greenwich

During the period under review, a new joint venture was formed with Knight Dragon, the investment vehicle ultimately owned by the Chairman of New World Development, Dr Henry Cheng Kar-Shun.

This partnership, which replaces the original agreement with Lend Lease, reduced Quintain's interest in the development potential of the scheme by 10% to 40% and, importantly, secured access to the funding required to deliver the entire scheme. Quintain retains a substantial proportion of the development profits for the Company and will earn development fees under the deal, which are expected to be approximately £4 million per annum once construction has achieved momentum.

Since the deal received overwhelming shareholder approval in July and the transaction completed, the team has delivered significant progress. The masterplan, which covers 140 acres across the river from Canary Wharf, has been reviewed in detail and a new delivery strategy that maximises value for shareholders agreed by the partners.

Subsequently, the team worked with the Greater London Authority to agree the components of the first phase of the delivery programme, which will comprise 11 residential plots. This agreement is underpinned by a Memorandum of Understanding that we announce today.

As part of this Memorandum, detailed planning applications were submitted to the Council for three plots in the southern quarter, Peninsula Riverside. The planning committee is expected to consider the applications in February and, if consent is granted, the team will start construction of the first 506 homes next summer, following expiry of the judicial review period. The joint venture will start marketing the residential units within the next 12 months.

During the period, Quintain made key appointments across the business to increase the management and operational capabilities of the delivery teams. Anthony Gill, who joined the Company as Development Director for Greenwich from Grosvenor in July is now driving delivery of the Greenwich Peninsula scheme.

3. Wembley

Quintain has delivered significant progress at Wembley since construction began five years ago, and we are on schedule to complete next year the first of four development phases.

This first phase, which comprises 1.8 million sq ft of development, includes leisure and retail components that will form the entertainment hub of the wider, 8 million sq ft scheme.

A significant milestone was reached during the summer with the delivery of the 361-bedroom Hilton Hotel. The hotel, which offers the only 4 star accommodation within five miles of the Stadium and Arena, is trading in line with expectations. The powerful combination of the National Stadium's conference facilities, the Arena's entertainment events and the hotel's high quality accommodation is proving popular with organisations looking for corporate event locations.

Alongside the hotel, the 660-bedroom student accommodation scheme, which was forward-sold by Quintain to Keystone & Partners Real Estate in 2011, was also opened. It is being run by Quintain's student accommodation team on behalf of Keystone.

Construction of the LDO - the shopping and leisure hub at the heart of Phase One - continued during the period. With completion now less than a year away, the LDO has attracted increasing levels of interest from retailers and leases covering 52% of the centre by base rent are signed or in solicitors' hands. In October, the internationally-recognised footwear brand, Clarks, joined Nike, Marks & Spencer and GAP to complete the LDO's line-up of anchor stores and we have also announced during the period leases to restaurant operators Lavazza, Nandos and Las Iguanas. Today we announce that a lease has been signed with LK Bennett for 1,900 sq ft of space in the scheme, joining high profile fashion brands Guess and Max Studio at the LDO.

As with Greenwich, we have clarified the leadership of the delivery team at Wembley during the period with the appointment of Ben Giddens as Development Director. Ben has been with Quintain since 2006 and has a deep knowledge of the Wembley scheme, most recently leading the successful outline planning application for Phase Two and securing the favourable re-negotiation of affordable housing quotas across Phases One and Four. As reported earlier in the year, this directly links the sales receipts achieved from Registered Providers with the level of affordable housing required, and provides a developer election to offset up to 25% of the requirement with the payment of a commuted sum set at £46.50 per square foot.

With Phase One now nearing completion, preparations are well underway for the development of Phase Two, which is located close to Wembley Park Underground station and will comprise 1,300 homes as well as the London Borough of Brent's new Civic Centre and square, which will open next summer. This new building, which faces the Stadium and the Arena across Arena Square, was designed by Hopkins Architects and, when opened, will accommodate 2,000 employees as well as welcoming an estimated one million visitors per year.

ASSET MANAGEMENT

1. Overview

The key role of the Asset Management business within Quintain is to deliver robust income streams from specialist property sectors to support the day-to-day operations of the Group and to deliver strong returns for the respective Funds' investors.

A substantial proportion of the Group's recurring income is currently delivered by this business, primarily derived from funds invested in three sectors: West End of London commercial property; healthcare; and purpose built student accommodation. The strategy is to deliver outperformance in these sectors, increasing income from management and performance fees and, over time, to reduce the level of equity that Quintain has invested in the vehicles relative to assets under management.

The period under review has been productive. Income from this business grew year on year, reflecting both the emergence of fees from Grafton and an increasing contribution from the enlarged iQ portfolio.

We will continue to drive income from management and performance fees in this business. However, as the delivery of our London developments builds momentum and new income streams are created, we intend to reduce the equity Quintain has invested in the Asset Management vehicles, thereby contributing to the corporate debt reduction programme and increasing the focus of the Group on its development activities.

2. Student Accommodation - iQ

Major sector operators such as iQ, in which Quintain holds a 50% interest, had predicted and prepared for the impact of this year's significant rise in tuition fees on student applications. The result is that iQ's portfolio is currently a healthy 96% let (2011: 99%) whilst also delivering a 5.0% increase in average rent (excluding the new scheme at Shoreditch) compared with last year. The net initial yield is 6.6%.

Some universities compounded the impact of a fee-driven fall in student applications by enforcing their demands for AAB A level grades and have consequently failed to fill their quota of places. Some students seeking to avoid higher tuition fees sacrificed a gap year, reducing the number of deferrals. However, indicators for the 2013/14 academic year suggest that the issues experienced by the sector this year are unlikely to re-occur. Deferrals are back to their pre-2012 levels and UCAS has reported a higher number of early applications than in the previous five years.

Our new scheme in Shoreditch opened for the current academic year, increasing the portfolio to 13 properties. This scheme, located in London's Zone 1, has 660 bedrooms, 23 common rooms and is close to Old Street underground station. Despite being a new scheme, lettings have been strong, with 93% of rooms occupied. This substantial expansion of the portfolio has led to a 37.5% increase in the rent roll which, together with the 5.0% increase in average rent across the established portfolio, has improved significantly the contribution iQ will this year deliver to Quintain.

Over the six months, iQ's total return to investors was 14.8% at Fund level.

3. Healthcare - Quercus

The Quercus Healthcare Fund was established in 1998 as a partnership between Quintain and Aviva. In addition to generating fees from asset management and procurement, Quintain holds an 11.2% interest in the vehicle, earning a share of the Fund's profits.

The current challenges faced by the sector are well-documented and include public spending cuts and increasing wage bills and energy costs. At the end of the period under review, five operators, managing 25 of the 261 homes in the Quercus portfolio, were in administration. However, in recent years the Fund has also diversified its base to include more specialist care facilities, which continue to deliver robust performance. 27% of the Fund by gross asset value currently delivers this type of specialist care.

The LTV of the Fund at 30 September 2012 was 45.4% and the average cost of debt 4.1%. Rental collection remains steady and the distribution yield of the Fund over the last twelve months is 5.9%.

4. West End Offices - WELPUT

Quintain's acquisition of Grafton Advisors in February 2012 not only expanded the Group's assets under management to in excess of £2.0 billion, it also added exposure to the more resilient London commercial market through the WELPUT Fund and strengthened the specialist property knowledge within the Group.

Quintain now earns base fees of £1.5 million per annum through activities connected with WELPUT, which has 80 investors, 12 assets and is currently valued at £846 million, thereby constituting a significant proportion of our assets under management. The Group can also earn development management and performance fees from the Fund.

During the period, Stratton House in Mayfair was sold for £166.0 million. £97.0 million of the proceeds was re-invested in two acquisitions: 3, St James's Square, SW1, and 143-157 Farringdon Road, EC1 and the majority of the rest contributed to reducing the Fund's debt, which stood at 26.0% of ATV at the period end.

The redevelopment of One Chapel Place, W1 was completed this summer and is now being marketed.

Responsibility Statement of the directors

in respect of the half-yearly financial report

We confirm that to the best of our knowledge:

The condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

The interim management report includes a fair review of the information required by:

(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

On behalf of the Board

Maxwell James Richard Stearn

Chief Executive Finance Director

26 November 2012 26 November 2012

Forward looking statements

This document contains certain "forward-looking" statements reflecting, amongst other things, current views on our markets, activities and prospects. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may or may not occur and which may be beyond Quintain Estates and Development's ability to control or predict (such as changing political, economic or market circumstances). Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements. Any forward-looking statements made by or on behalf of Quintain Estates and Development speak only as of the date on which they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. Except to the extent required by law, Quintain Estates and Development does not undertake to update or revise forward-looking statements to reflect any changes in Quintain Estates and Development's expectations with regard thereto or any changes in information, events, conditions or circumstances on which any such statement is based.

Independent review report to Quintain Estates and Development plc

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2012 which comprises the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Statement of Changes in Equity and Consolidated Cashflow Statement and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Services Authority ("the UK FSA"). Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FSA.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2012 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FSA.

Stephen Bligh

for and on behalf of KPMG Audit Plc

Chartered Accountants

15 Canada Square

London

E14 5GL

26 November 2012

Quintain Estates & Development PLC

Introduction and table of contents

In preparing these interim financial statements we have changed the format and layout having regard to the principles set out in the Financial Reporting Council's publication "Cutting Clutter". We have made these changes to make Quintain's interim financial statements easier to follow and to be more intuitive to provide readers with a clearer understanding of what drives the financial performance of the Group. In doing so, the notes to the interim financial statements have been grouped together under the following headings:

· Performance for the period (including segmental information and adjusted profit)

· Property assets, joint ventures and associates

· Disposals

· Other assets and liabilities

· Funding (net debt and equity)

Primary statements

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated balance sheet

Consolidated statement of changes in equity

Consolidated cashflow statement

Section 1: Preparation of financial statements

1.1 Accounting policies

1.2 Significant judgements and estimates

1.3 Going concern

Section 2: Performance for the period

2.1 Adjusted results for the period

2.2 Segmental analysis

2.3 Revenue, cost of sales and gross profit

2.4 Property revaluation movements

2.5 Net finance expenses

2.6 Taxation

2.7 Net asset value per share

Section 3: Property assets, joint ventures and associates

3.1 Investment properties

3.2 Capital commitments

3.3 Investment in joint ventures

Section 4: Disposals

4.1 Disposals

Section 5: Other assets and liabilities

5.1 Non-current receivables

5.2 Current trade and other receivables

5.3 Other payables (non-current)

5.4 Current trade and other payables

Section 6: Funding

6.1 Bank loans and other borrowings

Consolidated Income Statement

For the six months ended 30 September 2012

	Notes	Unaudited Six months ended	Unaudited Six months ended	Audited Year ended
		30 Sept 2012	30 Sept 2011	31 March 2012
		£m	£m	£m
Revenue	2.3	24.4	24.2	45.4
Cost of sales	2.3	(9.1)	(10.2)	(20.5)
Gross profit		15.3	14.0	24.9
Administrative expenses		(11.6)	(10.7)	(22.0)
Operating profit before recognition of results from non-current asset sales and revaluation		3.7	3.3	2.9
Loss from sale of non-current assets		(9.7)	(1.2)	(3.9)
(Deficit) surplus on revaluation of investment properties	2.4	(24.6)	1.6	(40.5)
Share of profit from joint ventures	3.3	6.7	6.1	8.6
Share of loss from associates		-	(0.1)	(0.1)
Operating (loss) profit		(23.9)	9.7	(33.0)
Finance expense	2.5	(8.0)	(9.3)	(16.7)
Finance income	2.5	2.8	3.3	6.2
(Loss) profit before tax		(29.1)	3.7	(43.5)
Tax credit for the period	2.6	6.6	0.5	8.0
(Loss) profit for the financial period		(22.5)	4.2	(35.5)

Attributable to:
Equity shareholders		(22.5)	4.2	(35.5)
Non-controlling interest		-	-	-
		(22.5)	4.2	(35.5)

Earnings per share (pence):
Basic and diluted		(4.3)	0.8	(6.8)

Consolidated Statement of Other Comprehensive Income

For the six months ended 30 September 2012

	Notes	Unaudited Six months ended	Unaudited Six months ended	Audited Year ended
		30 Sept 2012	30 Sept 2011	31 March 2012
		£m	£m	£m
Foreign currency translation differences		-	(0.4)	(0.4)
Deficit on revaluation of other non-current investments		(0.5)	(0.2)	(0.2)
Effective portion of changes in fair value of cashflow hedges		(0.9)	(5.0)	(4.4)
Recycling of fair value adjustment on cashflow hedges		4.7	4.4	9.1
Share of other comprehensive income in joint ventures, net of tax	3.3	(1.1)	0.6	3.2
Tax on other comprehensive income	2.6	(1.3)	0.2	1.2
Other comprehensive income for the financial period, net of tax		0.9	(0.4)	8.5
(Loss) profit for the financial period		(22.5)	4.2	(35.5)
Total comprehensive (loss) profit for the financial period, net of tax		(21.6)	3.8	(27.0)

Consolidated Balance Sheet

As at 30 September 2012

	Notes	Unaudited Six months ended	Unaudited Six months ended	Audited Year ended
		30 Sept 2012	30 Sept 2011	31 March 2012
		£m	£m	£m
Non-current assets
Investment properties	3.1	608.9	864.2	825.9
Owner-occupied properties, plant and equipment		0.2	2.3	0.8
Intangible assets		7.2	-	7.5
Investment in joint ventures	3.3	339.4	267.0	273.6
Investment in associates		1.4	1.4	1.5
Non-current receivables	5.1	61.3	14.1	14.9
Total non-current assets		1,018.4	1,149.0	1,124.2
Current assets
Trading properties		20.5	24.8	21.3
Trade and other receivables	5.2	32.7	25.0	23.1
Cash and cash equivalents		9.8	3.9	7.5
Total current assets		63.0	53.7	51.9
Total assets		1,081.4	1,202.7	1,176.1
Current liabilities
Bank loans and other borrowings	6.1	(76.1)	(1.7)	(76.1)
Trade and other payables	5.4	(38.2)	(38.2)	(42.0)
Current tax liability		(1.3)	(1.3)	(1.4)
Total current liabilities		(115.6)	(41.2)	(119.5)
Non-current liabilities
Bank loans and other borrowings	6.1	(397.3)	(532.6)	(464.2)
Deferred tax liability	2.6	-	(11.4)	(4.8)
Obligations under finance leases		(11.1)	(11.1)	(11.1)
Other payables	5.3	(6.9)	(3.9)	(4.5)
Total non-current liabilities		(415.3)	(559.0)	(484.6)
Total liabilities		(530.9)	(600.2)	(604.1)
Net assets		550.5	602.5	572.0
Equity
Issued capital		130.2	130.2	130.2
Share premium account		137.3	137.3	137.3
Other capital reserves		107.0	107.5	107.5
Cashflow hedge reserve		(17.8)	(28.1)	(19.2)
Retained earnings		201.3	264.0	224.6
Own shares held reserve		(7.8)	(8.7)	(8.7)
Equity shareholders' funds		550.2	602.2	571.7
Non-controlling interest		0.3	0.3	0.3
Total equity		550.5	602.5	572.0

Net asset value per share (pence):	2.7
Basic		106	116	110
Diluted		106	116	110

Consolidated Statement of Changes in Equity

For the six months ended 30 September 2012

	Issued capital	Share premium account	Other capital reserves	Cashflow hedge reserve	Retained earnings	Own shares held reserve	Equity shareholders' funds	Non-controlling interest	Unaudited Total equity
	Issued capital	Share premium account	Other capital reserves	Cashflow hedge reserve	Retained earnings	Own shares held reserve	Equity shareholders' funds	Non-controlling interest	Unaudited Total equity
	£m	£m	£m	£m	£m	£m	£m	£m	£m
Balance 1 April 2012	130.2	137.3	107.5	(19.2)	224.6	(8.7)	571.7	0.3	572.0
Loss for the financial period	-	-	-		(22.5)	-	(22.5)	-	(22.5)
Other comprehensive income for the period, net of tax	-	-	(0.5)	1.4	-	-	0.9	-	0.9
Shares awarded to employees under share based payment schemes	-	-	-	-	(0.9)	0.9	-	-	-
Costs relating to share-based payment schemes	-	-	-	-	0.1	-	0.1	-	0.1
Balance 30 September 2012	130.2	137.3	107.0	(17.8)	201.3	(7.8)	550.2	0.3	550.5

Consolidated Statement of Changes in Equity

For the six months ended 30 September 2011

	Issued capital	Share premium account	Other capital reserves	Cashflow hedge reserve	Retained earnings	Own shares held reserve	Equity shareholders' funds	Non-controlling interest	Unaudited Total equity
	Issued capital	Share premium account	Other capital reserves	Cashflow hedge reserve	Retained earnings	Own shares held reserve	Equity shareholders' funds	Non-controlling interest	Unaudited Total equity
	£m	£m	£m	£m	£m	£m	£m	£m	£m
Balance 1 April 2011	130.2	137.3	108.1	(28.3)	260.6	(9.6)	598.3	0.3	598.6
Profit for the financial period	-	-	-	-	4.2	-	4.2	-	4.2
Other comprehensive income for the period, net of tax	-	-	(0.6)	0.2	-	-	(0.4)	-	(0.4)
Shares awarded to employees under share based payment schemes	-	-	-	-	(0.9)	0.9	-	-	-
Costs relating to share-based payment schemes	-	-	-	-	0.1	-	0.1	-	0.1
Balance 30 September 2011	130.2	137.3	107.5	(28.1)	264.0	(8.7)	602.2	0.3	602.5

Consolidated Statement of Changes in Equity

For the year ended 31 March 2012

	Issued capital	Share premium account	Other capital reserves	Cashflow hedge reserve	Retained earnings	Own shares held reserve	Equity shareholders' funds	Non-controlling interest	Audited Total equity
	Issued capital	Share premium account	Other capital reserves	Cashflow hedge reserve	Retained earnings	Own shares held reserve	Equity shareholders' funds	Non-controlling interest	Audited Total equity
	£m	£m	£m	£m	£m	£m	£m	£m	£m
Balance 1 April 2011	130.2	137.3	108.1	(28.3)	260.6	(9.6)	598.3	0.3	598.6
Loss for the financial year	-	-	-	-	(35.5)	-	(35.5)	-	(35.5)
Other comprehensive income for the year, net of tax	-	-	(0.6)	9.1	-	-	8.5	-	8.5
Shares awarded to employees under share-based payment schemes	-	-	-	-	(0.9)	0.9	-	-	-
Costs relating to share-based payment schemes	-	-	-	-	0.4	-	0.4	-	0.4
Balance 31 March 2012	130.2	137.3	107.5	(19.2)	224.6	(8.7)	571.7	0.3	572.0

Consolidated Cashflow Statement

For the six months ended 30 September 2012

		Unaudited Six months ended	Unaudited Six months ended	Audited Year ended
		30 Sept 2012	30 Sept 2011	31 March 2012
		£m	£m	£m
Operating activities
(Loss) profit for the financial period		(22.5)	4.2	(35.5)
Adjustments for:
Depreciation of plant and equipment		-	0.4	0.6
Amortisation of intangibles		0.3	-	-
Costs relating to share-based payment schemes		0.1	0.1	0.4
Net finance expenses		5.2	6.0	10.5
Foreign exchange gains		-	(0.5)	(0.4)
Loss on sale of non-current assets		9.7	1.2	3.9
Deficit (surplus) on revaluation of investment properties		24.6	(1.6)	40.5
Share of profit from joint ventures		(6.7)	(6.1)	(8.6)
Share of loss from associates		-	0.1	0.1
Provision in book value of trading properties		-	1.2	2.9
Tax on continuing operations		(6.6)	(0.5)	(8.0)
		4.1	4.5	6.4
Increase in trade and other receivables		(6.4)	(3.8)	(1.8)
Increase in trade and other payables		3.9	3.5	4.0
Decrease (increase) in trading properties		0.7	(3.1)	(1.5)
Cash generated from operations		2.3	1.1	7.1
Interest paid	i	(8.1)	(21.9)	(30.7)
Interest received		3.1	1.1	1.6
Tax paid		-	-	0.1
Net cashflow from operating activities		(2.7)	(19.7)	(21.9)
Investing activities
Proceeds from sale of investment properties		91.6	4.7	49.6
Purchase and development of investment properties		(39.3)	(54.2)	(95.5)
Purchase of owner-occupied properties, plant and equipment		(0.1)	-	(0.1)
Refund of capital from other non-current investments		-	-	0.5
Purchase of subsidiary net of cash acquired		(4.1)	-	(5.5)
Capital invested in joint ventures		(10.3)	-	-
Loans advanced to joint ventures		(2.8)	(45.1)	(45.3)
Capital and loan repayments received from joint ventures		36.5	-	1.5
Distributions received from joint ventures		1.5	2.0	3.5
Net cashflow from investing activities		73.0	(92.6)	(91.3)
Financing activities
Proceeds from new borrowings		-	160.5	110.5
Repayment of borrowings		(67.5)	(62.8)	(7.9)
Payment of loan issue costs		(0.1)	(0.9)	(0.9)
Payment of finance lease liabilities		(0.4)	(0.4)	(0.8)
Net cashflow from financing activities		(68.0)	96.4	100.9
Net increase/(decrease) in cash and cash equivalents		2.3	(15.9)	(12.3)
Cash and cash equivalents at start of period		7.5	19.8	19.8
Cash and cash equivalents at end of period		9.8	3.9	7.5

Notes:

i. In the six months ended 30 September 2011, interest paid included a payment of £12.4m (year ended 31 March 2012: £12.4m) relating to the repricing of the Group's swaps.

Notes to the accounts

For the six months ended 30 September 2012

Section 1: Preparation of financial statements

1.1 Accounting policies

The financial information contained in this half year report does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The results for the year ended 31 March 2012 are an abridged version of the full accounts for that year, which received an unqualified report from the auditors, did not contain a statement under section 498 (2) or (3) of the Companies Act 2006 or include a reference to any matter to which the auditors drew attention by way of matter of emphasis without qualifying their report, and have been filed with the Registrar of Companies. The annual financial statements are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this report has been prepared in accordance with IAS 34, 'Interim Financial Reporting', as adopted by the European Union.

Significant accounting policies

The same accounting policies, presentation and key sources of estimation are followed in the condensed set of financial statements as applied to the latest audited annual financial statements.

1.2 Significant judgements and estimates

The preparation of the interim financial statements under IFRS requires the Board to make judgements, estimates and assumptions that affect the application of accounting policies, the reported amount of assets and liabilities at the date of the financial statements and the reported amount of revenue and expense during the reporting period. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements that are not readily apparent from other sources. However, the actual results may differ from the estimates.

In preparing these financial statements the key judgements and estimates made by the Board are consistent with those applied in the financial statements as of, and for the year ended, 31 March 2012.

There have been no material changes to reportable contingent liabilities since 31 March 2012 and the Group's financial performance does not suffer materially from seasonal fluctuations.

1.3 Going concern

The Group financial statements have been prepared on a going concern basis. This policy is supported by the detailed cashflow forecasts prepared by the Group at 30 September 2012 which show that there are adequate undrawn facilities to finance all committed capital expenditure and other outflows and thus the Group will be able to meet its liabilities as they fall due for the foreseeable future.

Section 2: Performance for the period

2.1 Adjusted results for the period

Adjusted results for the year are provided to enable readers of the accounts to differentiate between items of an underlying operating nature and those relating to capital or revaluations.

	Unaudited six months ended 30 Sept 2012			Unaudited six months ended 30 Sept 2011			Audited Year ended 31 March 2012
	Adjusted	Capital¹	Total	Adjusted	Capital¹	Total	Adjusted	Capital¹	Total
	£m	£m	£m	£m	£m	£m	£m	£m	£m
Revenue	24.4	-	24.4	24.2	-	24.2	45.4	-	45.4
Cost of sales	(9.1)	-	(9.1)	(9.0)	(1.2)	(10.2)	(17.6)	(2.9)	(20.5)
Gross profit (loss)	15.3	-	15.3	15.2	(1.2)	14.0	27.8	(2.9)	24.9
Administrative expenses	(11.6)	-	(11.6)	(10.7)	-	(10.7)	(22.0)	-	(22.0)
Operating profit (loss) before recognition of results from non-current asset sales and revaluation	3.7	-	3.7	4.5	(1.2)	3.3	5.8	(2.9)	2.9
Loss from the sale of non-current assets	-	(9.7)	(9.7)	-	(1.2)	(1.2)	-	(3.9)	(3.9)
(Deficit) surplus on revaluation of investment properties	-	(24.6)	(24.6)	-	1.6	1.6	-	(40.5)	(40.5)
Share of profit from joint ventures	2.9	3.8	6.7	1.0	5.1	6.1	4.4	4.2	8.6
Share of loss from associates	-	-	-	-	(0.1)	(0.1)	-	(0.1)	(0.1)
Operating profit (loss) before finance expenses and tax	6.6	(30.5)	(23.9)	5.5	4.2	9.7	10.2	(43.2)	(33.0)
Interest payable	(5.1)	-	(5.1)	(5.5)	-	(5.5)	(10.6)	-	(10.6)
Change of fair value of derivative financial instruments	-	(2.9)	(2.9)	-	(3.8)	(3.8)	-	(6.1)	(6.1)
Finance expenses	(5.1)	(2.9)	(8.0)	(5.5)	(3.8)	(9.3)	(10.6)	(6.1)	(16.7)
Finance Income	2.8	-	2.8	3.3	-	3.3	6.2	-	6.2
Net finance expenses	(2.3)	(2.9)	(5.2)	(2.2)	(3.8)	(6.0)	(4.4)	(6.1)	(10.5)
Profit (loss) before tax	4.3	(33.4)	(29.1)	3.3	0.4	3.7	5.8	(49.3)	(43.5)
Tax credit (charge) for the period	-	6.6	6.6	(0.1)	0.6	0.5	(0.1)	8.1	8.0
Profit (loss) for the financial period attributable to equity shareholders	4.3	(26.8)	(22.5)	3.2	1.0	4.2	5.7	(41.2)	(35.5)

¹For these purposes revaluation movements and trading property provisions are included with capital items.

2.2 Segmental analysis

The Group has seven reportable segments. The Urban Regeneration (UR) segments include Wembley, Greenwich and Other UR. The Quintain Asset Management (QAM) segments include Quercus, iQ, SeQuel and Other QAM. No customer accounts for more than 10% of the Group's revenue. All of the Group's revenues are derived from external customers. There are no inter-segmental revenues. As disclosed at 31 March 2012, following a revision to the reporting provided to the Board, the Group's segment disclosures have been amended. The comparative period's segment results for period ended September 2011 and balance sheet has been restated accordingly.

The segmental analysis of the Group's results for the six months ended 30 September 2012 was as follows:

	Wembley	Greenwich	Other UR	Total UR	Quercus	iQ	SeQuel	Other QAM	Total QAM	Total
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Revenue	12.1	0.7	1.2	14.0	1.3	1.4	4.5	3.2	10.4	24.4
Cost of sales	(4.4)	-	(0.6)	(5.0)	(0.3)	-	(1.3)	(2.5)	(4.1)	(9.1)
Gross profit	7.7	0.7	0.6	9.0	1.0	1.4	3.2	0.7	6.3	15.3
(Loss) profit from the sale of non-current assets	(1.2)	(10.7)	-	(11.9)	-	-	-	2.2	2.2	(9.7)
(Deficit) surplus on revaluation of investment properties	(14.4)	0.1	(1.5)	(15.8)	-	-	(6.9)	(1.9)	(8.8)	(24.6)
Share of profit (loss) from joint ventures	0.1	(1.6)	-	(1.5)	(0.8)	8.8	-	0.2	8.2	6.7
Operating (loss) profit before administrative expenses	(7.8)	(11.5)	(0.9)	(20.2)	0.2	10.2	(3.7)	1.2	7.9	(12.3)
Administrative expenses										(11.6)
Net finance expenses										(5.2)
Loss before tax										(29.1)

Adjusted	7.8	0.3	0.6	8.7	2.7	2.6	3.2	1.0	9.5	18.2
Capital¹	(15.6)	(11.8)	(1.5)	(28.9)	(2.5)	7.6	(6.9)	0.2	(1.6)	(30.5)
Operating (loss) profit before administrative expenses	(7.8)	(11.5)	(0.9)	(20.2)	0.2	10.2	(3.7)	1.2	7.9	(12.3)

¹For these purposes revaluation movements and trading property provisions are included with capital items.

2.2 Segmental analysis (continued)

The segmental analysis of the Group's results for the six months ended 30 September 2011 was as follows:

	Wembley	Greenwich	Other UR	Total UR	Quercus	iQ	SeQuel	Other QAM	Total QAM	Total
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Revenue	12.7	0.1	0.6	13.4	2.2	1.2	4.4	3.0	10.8	24.2
Cost of sales	(5.5)	(0.1)	(1.4)	(7.0)	(1.0)	-	(0.9)	(1.3)	(3.2)	(10.2)
Gross profit (loss)	7.2	-	(0.8)	6.4	1.2	1.2	3.5	1.7	7.6	14.0
(Loss) profit from the sale of non-current assets	(1.0)	-	-	(1.0)	-	-	0.3	(0.5)	(0.2)	(1.2)
(Deficit) surplus on revaluation of investment properties	(1.1)	6.9	(0.1)	5.7	-	-	(2.6)	(1.5)	(4.1)	1.6
Share of profit (loss) from joint ventures	0.1	(0.2)	(0.1)	(0.2)	0.9	5.3	-	-	6.2	6.0
Operating profit (loss) before administrative expenses	5.2	6.7	(1.0)	10.9	2.1	6.5	1.2	(0.3)	9.5	20.4
Administrative expenses										(10.7)
Net finance expenses										(6.0)
Profit before tax										3.7


Adjusted	7.3	(0.3)	0.3	7.3	2.7	0.9	3.5	1.8	8.9	16.2
Capital¹	(2.1)	7.0	(1.3)	3.6	(0.6)	5.6	(2.3)	(2.1)	0.6	4.2
Operating profit (loss) before administrative expenses	5.2	6.7	(1.0)	10.9	2.1	6.5	1.2	(0.3)	9.5	20.4

¹For these purposes revaluation movements and trading property provisions are included with capital items.

2.2 Segmental analysis (continued)

The segmental analysis of the Group's results for the year ended 31 March 2012 was as follows:

	Wembley	Greenwich	Other UR	Total UR	Quercus	iQ	SeQuel	Other QAM	Total QAM	Total
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Revenue	23.0	0.2	1.8	25.0	3.6	3.0	8.5	5.3	20.4	45.4
Cost of sales	(10.0)	(0.1)	(3.9)	(14.0)	(1.3)	-	(2.2)	(3.0)	(6.5)	(20.5)
Gross profit (loss)	13.0	0.1	(2.1)	11.0	2.3	3.0	6.3	2.3	13.9	24.9
(Loss) profit from the sale of non-current assets	(0.8)	-	(3.4)	(4.2)	-	-	0.6	(0.3)	0.3	(3.9)
(Deficit) surplus on revaluation of investment properties	(29.5)	6.5	(2.9)	(25.9)	-	-	(10.9)	(3.7)	(14.6)	(40.5)
Share of profit (loss) from joint ventures	0.3	(0.7)	0.1	(0.3)	0.6	8.3	-	-	8.9	8.6
Share of loss from associates	-	-	-	-	-	-	-	(0.1)	(0.1)	(0.1)
Operating (loss) profit before administrative expenses	(17.0)	5.9	(8.3)	(19.4)	2.9	11.3	(4.0)	(1.8)	8.4	(11.0)
Administrative expenses										(22.0)
Net finance expenses										(10.5)
Loss before tax										(43.5)

Adjusted	13.3	(0.8)	0.8	13.3	5.3	4.8	6.3	2.5	18.9	32.2
Capital¹	(30.3)	6.7	(9.1)	(32.7)	(2.4)	6.5	(10.3)	(4.3)	(10.5)	(43.2)
Operating (loss) profit before administrative expenses	(17.0)	5.9	(8.3)	(19.4)	2.9	11.3	(4.0)	(1.8)	8.4	(11.0)

¹For these purposes revaluation movements and trading property provisions are included with capital items.

2.2 Segmental analysis (continued)

The segmental analysis of the Group's Balance Sheet as at 30 September 2012 was as follows:

	Wembley	Greenwich	Other UR	Total UR	Quercus	iQ	SeQuel	Other QAM	Total QAM	Total
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Investment properties	489.5	9.5	20.8	519.8	-	-	59.4	29.7	89.1	608.9
Intangible assets	-	-	-	-	-	-	-	7.2	7.2	7.2
Investment in joint ventures	1.9	177.8	0.6	180.3	48.0	95.8	-	15.3	159.1	339.4
Investment in associates	-	-	-	-	-	-	-	1.4	1.4	1.4
Non-current receivables	4.5	42.4	3.7	50.6	-	-	-	10.7	10.7	61.3
Trading properties	8.6	-	11.9	20.5	-	-	-	-	-	20.5
Total segmented assets	504.5	229.7	37.0	771.2	48.0	95.8	59.4	64.3	267.5	1,038.7
Unallocated assets										42.7
Total assets										1,081.4
Capital expenditure	28.7	9.5	1.5	39.7	-	-	-	-	-	39.7

The segmental analysis of the Group's Balance Sheet as at 30 September 2011 was as follows:

	Wembley	Greenwich	Other UR	Total UR	Quercus	iQ	SeQuel	Other QAM	Total QAM	Total
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Investment properties	515.3	166.1	37.9	719.3	-	-	75.1	69.8	144.9	864.2
Investment in joint ventures	3.4	87.8	0.8	92.0	51.4	110.3	-	13.3	175.0	267.0
Investment in associates	-	-	-	-	-	-	-	1.4	1.4	1.4
Non-current receivables	-	-	3.4	3.4	-	-	-	10.7	10.7	14.1
Trading properties	10.0	-	14.8	24.8	-	-	-	-	-	24.8
Total segmented assets	528.7	253.9	56.9	839.5	51.4	110.3	75.1	95.2	332.0	1,171.5
Unallocated assets										31.2
Total assets										1,202.7
Capital expenditure	38.9	0.3	0.1	39.3	-	-	-	17.2	17.2	56.5

2.2 Segmental analysis (continued)

The segmental analysis of the Group's Balance Sheet as at 31 March 2012 was as follows:

	Wembley	Greenwich	Other UR	Total UR	Quercus	iQ	SeQuel	Other QAM	Total QAM	Total
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Investment properties	536.5	167.8	20.6	724.9	-	-	66.4	34.6	101.0	825.9
Intangible assets	-	-	-	-	-	-	-	7.5	7.5	7.5
Investment in joint ventures	2.3	89.1	0.6	92.0	50.1	116.4	-	15.1	181.6	273.6
Investment in associate	-	-	-	-	-	-	-	1.5	1.5	1.5
Non-current receivables	-	-	4.2	4.2	-	-	-	10.7	10.7	14.9
Trading properties	9.0	-	12.3	21.3	-	-	-	-	-	21.3
Total segmented assets	547.8	256.9	37.7	842.4	50.1	116.4	66.4	69.4	302.3	1,144.7
Unallocated assets										31.4
Total assets										1,176.1
Capital expenditure	81.1	2.4	1.0	84.5	-	-	-	17.5	17.5	102.0

2.3 Revenue, cost of sales and gross profit

	Unaudited six months ended 30 Sept 2012			Unaudited six months ended 30 Sept 2011			Audited year ended 31 March 2012
	Revenue	Cost of sales	Gross profit	Revenue	Cost of sales	Gross profit	Revenue	Cost of sales	Gross profit
	£m	£m	£m	£m	£m	£m	£m	£m	£m
Rental income	10.2	(3.3)	6.9	10.1	(2.7)	7.4	20.1	(5.7)	14.4
Income from sale of trading properties	0.8	(0.8)	-	0.9	(0.8)	0.1	2.3	(2.4)	(0.1)
Income from hotel operations	2.4	(1.6)	0.8	4.8	(1.8)	3.0	8.5	(3.7)	4.8
Fees from asset management	3.9	(0.9)	3.0	3.8	(1.2)	2.6	7.3	(1.5)	5.8
Other income	7.1	(2.5)	4.6	4.6	(2.5)	2.1	7.2	(4.3)	2.9
	24.4	(9.1)	15.3	24.2	(9.0)	15.2	45.4	(17.6)	27.8
Provision in book value of trading properties	-	-	-	-	(1.2)	(1.2)	-	(2.9)	(2.9)
	24.4	(9.1)	15.3	24.2	(10.2)	14.0	45.4	(20.5)	24.9

Summary of group net rental income

	Unaudited Six months ended 30 Sept 2012 £m	Unaudited Six months ended 30 Sept 2011 £m	Audited Year ended 31 March 2012 £m
Net rental income	6.9	7.4	14.4
Share of joint venture net rental income	7.0	5.6	13.7
Total net rental income, including share of joint venture net rental income	13.9	13.0	28.1

2.4 Property revaluation movements

The revaluation movements on the Group's investment properties, whether held directly or through joint ventures and the associates, were as follows:

	Unaudited Six months ended 30 Sept 2012 £m	Unaudited Six months ended 30 Sept 2011 £m	Audited Year ended 31 March 2012 £m
Recognised in Income Statement:
(Deficit) surplus on revaluation of directly held investment properties	(24.6)	1.6	(40.5)
Surplus on revaluation of investment properties in joint ventures	5.6	6.7	7.8
Deficit on revaluation of associates	-	(0.1)	(0.2)
	(19.0)	8.2	(32.9)

2.5 Net finance expenses

	Unaudited Six months ended 30 Sept 2012 £m	Unaudited Six months ended 30 Sept 2011 £m	Audited Year ended 31 March 2012 £m
Interest expense on bank debt and associated swaps	8.8	9.4	18.9
Interest on obligations under finance leases	0.4	0.4	0.8
Interest payable	9.2	9.8	19.7
Change in fair value of ineffective caps	0.7	1.7	2.0
Recycling of fair value adjustment on effective swaps	4.7	4.4	9.1
Interest capitalised	(6.6)	(6.6)	(14.1)
Finance expenses	8.0	9.3	16.7
Finance income: interest income on loans and receivables	(2.8)	(3.3)	(6.2)
	5.2	6.0	10.5

The average interest rate used for capitalisation was 5.0% (six months ended 30 September 2011: 5.4% and year ended 31 March 2012: 5.3%).

2.6 Taxation

i) Tax credit on (loss) profit

	Unaudited Six months ended 30 Sept 2012 £m	Unaudited Six months ended 30 Sept 2011 £m	Audited Year ended 31 March 2012 £m
UK current tax at 24% (30 Sept 2011 and 31 March 2012: 26%)	-	-	-
Overseas tax	-	0.1	0.1
Total current tax charge	-	0.1	0.1
Deferred tax (note 2.6ii)	(6.6)	(0.6)	(8.1)
Tax credit	(6.6)	(0.5)	(8.0)

2.6 Taxation (continued)

ii) Deferred tax movements

	Audited				Unaudited	Unaudited
	31 March 2012 £m	Recognised in income £m	Acquisition of subsidiary £m	Recognised in equity £m	30 Sept 2012 £m	30 Sept 2011 £m
Capital gains less capital losses	11.2	(11.7)	0.5	-	-	25.9
Capital allowances	9.6	0.2	-	-	9.8	9.8
Derivative financial instruments	(7.1)	(0.2)	-	1.3	(6.0)	(6.5)
Other temporary differences	2.4	(1.8)	-	-	0.6	0.5
Revenue tax (losses) gains	(11.3)	6.9	-	-	(4.4)	(18.3)
Deferred tax provision	4.8	(6.6)	0.5	1.3	-	11.4

The deferred tax liability as at the period end has been reduced following the enacted change in the rate of corporation tax from 24% to 23% effective from 1 April 2013. The Group has re-measured the deferred tax assets and liabilities at 30 September 2012 using the enacted rate of 23%. Future changes are not reflected in the financial statements for the period to September 2012 as these have not yet been enacted.

2.7 Net asset value per share

	Unaudited 30 Sept 2012			Unaudited 30 Sept 2011			Audited 31 March 2012
	Equity shareholders' funds £m	Number of shares m	Net asset value per share pence	Equity shareholders' funds £m	Number of shares m	Net asset value per share pence	Equity shareholders' funds £m	Number of shares m	Net asset value per share pence
Net assets	550.5	521.0	-	602.2	520.5	-	571.7	520.9	-
Less: Treasury shares	-	(2.2)	-	-	(2.5)	-	-	(2.5)	-
Basic	550.5	518.8	106	602.2	518.0	116	571.7	518.4	110
Adjustment:
Employee share-based payment schemes	0.1	0.3	-	0.2	0.9	-	0.1	0.5	-
Diluted	550.6	519.1	106	602.4	518.9	116	571.8	518.9	110

Although not required under IFRS, net asset value per share is considered a key performance indicator in the sector in which the Group operates.

Section 3: Property assets, joint ventures and associates

3.1 Investment properties

The movements in investment properties were as follows:

	Unaudited 30 Sept 2012	Unaudited 30 Sept 2011	Audited 31 March 2012
	£m	£m	£m
Opening balance	825.9	805.6	805.6
Additions	39.7	56.5	102.0
Interest capitalised	6.6	6.6	14.1
Disposals	(238.7)	(6.1)	(55.3)
Revaluation (deficit) surplus	(24.6)	1.6	(40.5)
Closing balance	608.9	864.2	825.9

All of the Group's investment properties were externally valued as at 30 September 2012 on the basis of market value by professionally qualified valuers in accordance with the Appraisal and Valuation Standards of the Royal Institution of Chartered Surveyors.

The Group's land and property holdings at Greenwich, Wembley, Silvertown and Dairy House Farm, Redhill have been valued by Savills Commercial Limited. Other properties in the United Kingdom have been valued by Jones Lang LaSalle Limited, and Christie + Co. The Group's property interests in the Channel Islands have been valued by Guy Gothard & Co.

3.2 Capital commitments

As at 30 September 2012, the Group had capital commitments of £32.8m (30 September 2011: £54.4m and 31 March 2012: £25.0m) in relation to its own developments held as investment properties of which £nil (30 September 2011: £1.2m and 31 March 2012: £nil) is recoverable under government grants.

The Group's share of capital commitments in relation to its joint ventures was £0.2m (30 September 2011: £25.9m and 31 March 2012: £25.7m).

3.3 Investment in joint ventures

The movements in investment in joint ventures were as follows:

	Unaudited 30 Sept 2012	Unaudited 30 Sept 2011	Audited 31 March 2012
	£m	£m	£m
Opening balance	273.6	217.0	217.0
Additions	104.6	-	-
Amounts advanced	10.3	45.1	49.6
Amounts repaid	(46.7)	-	(1.6)
Disposals	(5.9)	-	-
Distributions	(2.1)	(1.8)	(3.2)
Share of profit, net of tax	6.7	6.1	8.6
Share of other comprehensive income, net of tax	(1.1)	0.6	3.2
Closing balance	339.4	267.0	273.6

The Group's share of the results of its joint venture operations was as follows:

Summarised income statements for the six months ended 30 September 2012

	Greenwich	iQ	Quantum	Quercus	Other joint ventures	Unaudited Group share in joint ventures
	£m	£m	£m	£m	£m	£m
Rental income	0.6	5.5	0.3	3.1	0.1	9.6
Income from sale of trading properties	-	-	-	-	0.5	0.5
Revenue	0.6	5.5	0.3	3.1	0.6	10.1
Cost of sales	(0.3)	(1.8)	(0.2)	(0.3)	(0.5)	(3.1)
Gross profit	0.3	3.7	0.1	2.8	0.1	7.0
Administrative expenses	(0.2)	(0.7)	-	(0.5)	-	(1.4)
Operating profit	0.1	3.0	0.1	2.3	0.1	5.6
(Deficit) surplus on revaluation of investment properties	(1.4)	9.9	(0.1)	(2.8)	-	5.6
(Loss) profit before net finance expenses and tax	(1.3)	12.9	-	(0.5)	0.1	11.2
Finance expenses	(0.5)	(1.9)	-	(0.7)	-	(3.1)
Finance income	-	0.1	0.2	-	-	0.3
(Loss) profit before tax	(1.8)	11.1	0.2	(1.2)	0.1	8.4
Tax	0.2	(2.3)	-	0.4	-	(1.7)
(Loss) profit after tax	(1.6)	8.8	0.2	(0.8)	0.1	6.7

3.3 Investment in joint ventures (continued)

Share of other comprehensive income for the six months ended 30 September 2012

Greenwich

Quantum

Quercus

Other

joint

ventures

Unaudited

Group share

in joint

ventures

£m

Effective portion of changes in fair value of cashflow hedges, net of tax

(1.4)

0.3

(1.1)

Summarised balance sheets as at 30 September 2012

	Greenwich	iQ	Quantum	Quercus	Other joint ventures	Unaudited Group share in joint ventures
	£m	£m	£m	£m	£m	£m
Investment properties	15.0	205.0	5.1	83.6	-	308.7
Investment in joint ventures	3.1	-	-	-	-	3.1
Trading properties	158.5	-	-	0.9	6.1	165.5
Deferred tax asset	3.5	-	0.3	0.7	-	4.5
Other assets	9.5	13.6	12.3	4.1	1.0	40.5
Total assets	189.6	218.6	17.7	89.3	7.1	522.3
Current liabilities:
Trade and other payables	(11.8)	(9.7)	(2.4)	(2.8)	(4.6)	(31.3)
Non-current liabilities:
Bank loans and other borrowings	-	(110.8)	-	(38.5)	-	(149.3)
Other liabilities	(85.9)	(2.3)	-	-	-	(88.2)
Net external assets	91.9	95.8	15.3	48.0	2.5	253.5

Represented by:
Capital	91.9	95.8	15.3	48.0	2.5	253.5
Loans	85.9	-	-	-	-	85.9
Total investment	177.8	95.8	15.3	48.0	2.5	339.4

The valuation of properties held within Quercus as at 30 September 2012 were performed by Christie + Co, on the basis of market value and in accordance with the Appraisal and Valuation Standards of the Royal Institution of Chartered Surveyors. Investment properties within the Greenwich joint ventures were valued by Savills Commercial Limited and within the Quantum Unit Trust and the iQ Unit Trust by CB Richard Ellis Limited.

3.3 Investment in joint ventures (continued)

Summarised income statements for the six months ended 30 September 2011

	Greenwich	iQ	Quantum	Quercus	Other joint ventures	Unaudited Group share in joint ventures
	£m	£m	£m	£m	£m	£m
Rental income	0.3	4.4	0.2	3.2	0.2	8.3
Income from sale of trading properties	-	-	-	-	0.3	0.3
Revenue	0.3	4.4	0.2	3.2	0.5	8.6
Cost of sales	(0.3)	(1.6)	(0.1)	-	(0.4)	(2.4)
Gross profit	-	2.8	0.1	3.2	0.1	6.2
Administrative expenses	-	(0.6)	-	(0.9)	-	(1.5)
Operating profit	-	2.2	0.1	2.3	0.1	4.7
Surplus (deficit) on revaluation of investment properties	0.5	6.9	(0.1)	(0.6)	-	6.7
Profit before net finance expenses and tax	0.5	9.1	-	1.7	0.1	11.4
Finance expenses	(0.4)	(1.8)	-	(0.8)	-	(3.0)
Profit before tax	0.1	7.3	-	0.9	0.1	8.4
Tax	(0.3)	(2.0)	-	-	-	(2.3)
(Loss) profit after tax	(0.2)	5.3	-	0.9	0.1	6.1

Share of other comprehensive income for the six months ended 30 September 2011

	Greenwich	iQ	Quantum	Quercus	Other joint ventures	Unaudited Group share in joint ventures
	£m	£m	£m	£m	£m	£m
Effective portion of changes in fair value of cashflow hedges, net of tax	-	0.7	-	0.2	-	0.9
Recycling of mark-to-market adjustments	-	(0.3)	-	-	-	(0.3)
	-	0.4	-	0.2	-	0.6

3.3 Investment in joint ventures (continued)

Summarised balance sheets as at 30 September 2011

	Greenwich	iQ	Quantum	Quercus	Other joint ventures	Unaudited Group share in joint ventures
	£m	£m	£m	£m	£m	£m
Investment properties	21.9	164.4	6.1	88.6	-	281.0
Investment in joint ventures	1.2	-	-	-	-	1.2
Trading properties	59.2	-	-	1.0	8.2	68.4
Deferred tax asset	3.2	2.7	0.3	-	-	6.2
Other assets	7.6	25.6	11.1	4.3	0.9	49.5
Total assets	93.1	192.7	17.5	93.9	9.1	406.3
Current liabilities:
Trade and other payables	(5.3)	(11.1)	(4.2)	(3.8)	(4.9)	(29.3)
Non-current liabilities:
Bank loans and other borrowings	-	(70.3)	-	(38.3)	-	(108.6)
Other liabilities	(95.8)	(37.9)	-	(0.4)	-	(134.1)
Net external assets	(8.0)	73.4	13.3	51.4	4.2	134.3

Represented by:
Capital	(8.0)	73.4	13.3	51.4	4.2	134.3
Loans	95.8	36.9	-	-	-	132.7
Total investment	87.8	110.3	13.3	51.4	4.2	267.0

3.3 Investment in joint ventures (continued)

Summarised income statements as at 31 March 2012

	Greenwich	iQ	Quantum	Quercus	Other joint ventures	Audited Group share in joint ventures
	£m	£m	£m	£m	£m	£m
Rental income	4.6	11.3	0.3	6.4	0.3	22.9
Income from sale of trading properties	-	-	-	-	1.9	1.9
Revenue	4.6	11.3	0.3	6.4	2.2	24.8
Cost of sales	(4.5)	(3.2)	(0.5)	(0.9)	(1.8)	(10.9)
Gross profit (loss)	0.1	8.1	(0.2)	5.5	0.4	13.9
Administrative expenses	(0.1)	(1.3)	-	(1.0)	-	(2.4)
Operating profit (loss)	-	6.8	(0.2)	4.5	0.4	11.5
Surplus (deficit) on revaluation of investment properties	0.3	10.4	(0.2)	(2.7)	-	7.8
Profit (loss) before net finance expenses and tax	0.3	17.2	(0.4)	1.8	0.4	19.3
Finance expenses	(0.8)	(5.3)	-	(1.5)	-	(7.6)
Finance income	-	0.3	0.4	-	-	0.7
(Loss) profit before tax	(0.5)	12.2	-	0.3	0.4	12.4
Tax	(0.2)	(3.9)	-	0.3	-	(3.8)
(Loss) profit after tax	(0.7)	8.3	-	0.6	0.4	8.6

Share of other comprehensive income as at 31 March 2012

	Greenwich	iQ	Quantum	Quercus	Other joint ventures	Audited Group share in joint ventures
	£m	£m	£m	£m	£m	£m
Effective portion of changes in fair value of cashflow hedges, net of tax	-	1.3	-	0.7	-	2.0
Recycling of mark-to-market adjustment	-	1.2	-	-	-	1.2
	-	2.5	-	0.7	-	3.2

3.3 Investment in joint ventures (continued)

Summarised balance sheets as at 31 March 2012

	Greenwich	iQ	Quantum	Quercus	Other joint ventures	Audited Group share in joint ventures
	£m	£m	£m	£m	£m	£m
Investment properties	20.8	168.5	5.1	86.8	-	281.2
Investment in joint ventures	1.2	-	-	-	-	1.2
Trading properties	63.0	-	-	0.9	6.6	70.5
Deferred tax assets	3.4	0.8	0.3	0.3	-	4.8
Other assets	6.3	10.4	12.3	3.8	1.0	33.8
Total assets	94.7	179.7	17.7	91.8	7.6	391.5
Current liabilities:
Trade and other payables	(5.6)	(5.6)	(2.6)	(3.4)	(4.7)	(21.9)
Non-current liabilities:
Bank loans and other borrowings	(97.6)	(95.6)	-	(38.3)	-	(231.5)
Net external assets	(8.5)	78.5	15.1	50.1	2.9	138.1

Represented by:
Group share of net assets	(8.5)	78.5	15.1	50.1	2.9	138.1
Loans	97.6	37.9	-	-	-	135.5
Total investment	89.1	116.4	15.1	50.1	2.9	273.6

During the period, the Group received the following fees in respect of services provided to its joint ventures and other related parties:

	Unaudited Six months ended 30 Sept 2012 £m	Unaudited Six months ended 30 Sept 2011 £m	Audited Year ended 31 March 2012 £m
Quercus Healthcare Property Unit Trust	1.3	2.2	3.7
iQ Unit Trust	1.4	1.2	3.0
Quantum Unit Trust	-	0.3	0.3
Quintessential Homes (Wembley) LLP	0.1	0.1	0.1
	2.8	3.8	7.1

The Group received the following interest on its loan notes to its joint ventures and other related parties:

	Unaudited Six months ended 30 Sept 2012 £m	Unaudited Six months ended 30 Sept 2011 £m	Audited Year ended 31 March 2012 £m
Greenwich Peninsula Regeneration Limited	0.8	0.9	1.8
Greenwich Peninsula Retail LLP	-	-	0.1
iQ Unit Trust	0.6	0.9	1.9
Greenwich N0204	0.4	0.4	0.8
Albemarle Retail Properties LLP	0.5	0.5	1.1
	2.3	2.7	5.7

Section 4: Disposals

4.1 Disposals

On the 27 July 2012, following approval from its shareholders, the Group completed its restructuring and net disposal of some of its interests in Greenwich. The net impact was a £93.3m increase in its investment in Greenwich Peninsula Regeneration Limited (GPRL) with a reduced ownership from 50% to 40%. Significant elements of the transaction were:

- Disposal of Quintain Meridian Limited, a 100% subsidiary of Quintain which owns the Peninsula Quays land at Greenwich valued at £74.9m, to GPRL

- Acquisition from Lend Lease of its 50% share of the share capital and loan notes of GPRL and consequential disposal of 60% to Knight Dragon

The net consideration received from the transaction, after costs of £6.9m, was £22.2m and with a further £50m payable in fixed installments over the next 6 years. In accordance with IAS 39, the loan has been recognised at fair value, calculated at £42.1m.

The impact of the transaction was as follows:

				£m
Net assets disposed:
Reduction in investment property				(167.8)
Increase in investment in joint ventures				93.3
Increase in other net assets				1.1
Total non-current assets				(73.4)

Net proceeds
Cash and cash equivalents				22.2
Deferred receivable				42.1
				64.3
Movement in net assets				(9.1)

Loss from sale of non-current assets				(10.7)
Tax credit on transaction				1.6
				(9.1)

Section 5: Other assets and liabilities

5.1 Non-current receivables

	Unaudited 30 Sept 2012 £m	Unaudited 30 Sept 2011 £m	Audited 31 March 2012 £m
Investments at fair value
Opening balance	2.9	3.6	3.6
Return of capital	-	-	(0.5)
Revaluation loss	(0.5)	(0.2)	(0.2)
Closing balance	2.4	3.4	2.9

Loans at amortised cost
Opening balance	12.0	10.7	10.7
Additions	46.6	-	1.3
Unwinding of discount	0.3	-	-
Closing balance	58.9	10.7	12.0

Total	61.3	14.1	14.9

The Group has two unsecured loans totaling £10.7m (30 Sept 2011: £10.7m and 31 March 2012: £10.7m) to an associate, Albermarle Retail Properties LLP, which carry a coupon of 10% per annum and the principal of which will be repaid together with an additional rolled-up coupon of 10% out of the proceeds from the sale of the associate's properties. The receivables are shown in the Balance Sheet at amortised cost.

5.2 Current trade and other receivables

	Unaudited 30 Sept 2012 £m	Unaudited 30 Sept 2011 £m	Audited 31 March 2012 £m
Trade receivables	10.3	15.7	8.6
Amount due from related parties	3.8	2.4	3.5
Other receivables	15.3	3.9	6.0
Trade and other receivables	29.4	22.0	18.1
Prepayments and accrued income	2.9	2.2	3.9
Interest rate caps at fair value	0.4	0.8	1.1
	32.7	25.0	23.1

5.3 Other payables (non-current)

	Unaudited 30 Sept 2012 £m	Unaudited 30 Sept 2011 £m	Audited 31 March 2012 £m
Interest rate swaps	2.3	2.7	2.0
Other payables	3.4	1.2	1.3
Unsecured loan notes	1.2	-	1.2
	6.9	3.9	4.5

5.4 Current trade and other payables

	Unaudited 30 Sept 2012 £m	Unaudited 30 Sept 2011 £m	Audited 31 March 2012 £m
Trade payables	1.3	8.0	8.7
Other payables	13.4	6.5	3.9
Accruals and deferred income	20.8	21.7	27.4
Interest rate swaps	2.7	2.0	2.0
	38.2	38.2	42.0

Section 6: Funding

6.1 Bank loans and other borrowings:

i) The maturity profile of the Group's debt was as follows:

	Total debt
	Unaudited 30 Sept 2012	Unaudited 30 Sept 2011	Audited 31 March 2012
	£m	£m	£m
Current liabilities	76.1	1.7	76.1
Non-current liabilities	397.3	532.6	464.2
	473.4	534.3	540.3
Non-current liabilities
1 - 2 years	36.0	74.4	51.0
2 - 5 years	361.3	459.8	413.7
After 5 years	1.7	1.7	1.7
	399.0	535.9	466.4
Amortised borrowing costs	(1.7)	(3.3)	(2.2)
	397.3	532.6	464.2

The loans are secured by floating charges over assets owned by subsidiary undertakings.

The Group has undrawn loan facilities of £148.0m (30 Sept 2011: £83.0m and 31 March 2012: £72.0m). After the period end, undrawn loan facilities have reduced by £39.4m.

On the 8 November 2012, £35.0m of debt due within one year was extended to 2014.

ii) After taking account of interest rate swap arrangements, the risk profile of the Group's borrowings was as follows:

	Unaudited 30 Sept 2012	Unaudited 30 Sept 2011	Audited 31 Mar 2012
	£m	£m	£m
Fixed	328.0	328.0	328.0
Capped	147.1	209.6	214.5
Total debt	475.1	537.6	542.5

Weighted average interest rate of fixed rate debt	3.6%	3.6%	3.6%

This information is provided by RNS

The company news service from the London Stock Exchange

END

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Results for the six months ended 30 September 2012

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