Interim Results

Terrace Hill Group PLC
04 July 2006

For embargoed release at 7am                                         4 July 2006

             TERRACE HILL GROUP PLC ('Terrace Hill' or 'the Group')

                                INTERIM RESULTS

Terrace Hill Group Plc, the AIM listed property group, announces its results for
the six months ended 30 April 2006.

Overview

  • Triple Net Asset Value up 9.55% to 52.65p per share (October 2005: 48.06p
    per share)
  • Interim dividend of 0.7p per share (six months to the 30th April 2005:
    0.5p)
  • Committed to leveraging capital through co-investment providing enhanced
    performance related returns
  • Established £90 million commercial development fund
  • Continue to work towards de-merging house building division
  • Acquiring in joint venture a 49% interest in Nationwide's at.home
    portfolio of 2,253 flats and houses
  • Assessing the potential to form residential fund or REIT
  • First involvement in the healthcare sector - acquired in joint venture a
    five acre site in Hereford and planning a retirement village
  • Strengthened management team with appointment of corporate finance
    director


CHAIRMAN'S STATEMENT

I am delighted to present the Group's Unaudited Results for the six months to
30th April 2006 and my report on the half year where the Triple Net Asset Value
per share has risen by 9.55% to 52.65p.

Good progress has been made by the commercial and residential divisions with the
letting and sale of commercial investments at record yields, the purchase of new
development sites and the establishment of our first commercial development
fund.

The Terrace Hill Development Partnership closed in April having raised £10
million of new equity to invest in a number of the Group's commercial
developments with an estimated aggregate sales price of over £90 million.

The fund offers exposure to Terrace Hill's diversified commercial development
programme and includes office, prelet retail and industrial schemes across the
U.K. with a completed development value of between £5 million and £20 million.
The fund has a minimum life of four years during which time we expect to
reinvest most of the original equity in new schemes.  The Group has contributed
£2 million to the fund which demonstrates our commitment to leverage our capital
through co-investment providing enhanced performance related returns. In
addition the fund generates development management fees for Terrace Hill.

We have continued to take advantage of a very strong market for commercial
investments with the sale of our office development at 34 Clarendon Road,
Watford, industrial investments at Decimus Park, Tunbridge Wells and Thanet
Reach Business Park, and a mixed use retail and residential scheme at Jameson
Street, Hull.  Since the period end we have exchanged contracts to sell Cyprium,
a 70,000 sq ft office development which is prelet to the Welsh Development
Agency at Swansea Waterfront for £16.65 million reflecting a yield of 4.89%,
greatly exceeding our initial expectations.  Also since the end of April we have
agreed terms to sell 12 of the 20 industrial units at Cirrus, Farnborough and
have agreed the sale of a mixed industrial development in Crawley for £5.95
million.

Further progress has been made on our retail warehouse developments at Blyth and
Galashiels where 10 units out of a total of 11 have either been prelet or have
pre-lettings in solicitor's hands.

Both of the retail warehouse schemes and the Cirrus development at Farnborough
are now within the Terrace Hill Development Partnership.

On the residential development front we have sold or exchanged on 38 of 64 units
at Glasgow Green and we are confident of having all sold by the end of the year.
  Advances are also being made with the land development portfolio.  Since the
30th April an adjoining site has been purchased at Kilmarnock which improves
access and we are now ready to submit a detailed planning application for 165
units.  At Shotts the planning process has taken longer than expected but is now
at an advanced stage and we are now confident of obtaining consent for 174 units
in the autumn. As reported in my statement at the year end we continue to work
towards demerging the house building division into a separate AIM listed company
which we expect to generate greater value for Terrace Hill shareholders than
retaining the operation within the Group.   Our projections show that the
de-merged house building company should be building at least 200 units per year
from 2008 onwards.  We continue to seek new sites throughout Scotland for
residential development to build the land bank and volume growth.

Since the end of the period we have contracted to acquire, a 49% interest in
Nationwide's at.home portfolio of 2,253 flats and houses spread throughout major
cities in England and Scotland.  The £272 million portfolio is generally let on
assured shorthold tenancies and has been purchased at a discount to the vacant
possession value of the individual properties. We are assessing the potential to
merge much of the at.home portfolio with our existing portfolio of 331 units and
forming a residential fund or a REIT.  The continuing growth of residential
values across the U.K. makes us confident that the purchase will add
considerable value to Terrace Hill's TNAV at our financial year end.

Finally, we are further diversifying our interests with our first involvement in
the healthcare sector.  In joint venture with an established healthcare operator
we have entered into a conditional contract to acquire a 5 acre site in Hereford
and have recently submitted a planning application for a retirement village
comprising 100 residential units, a retirement hotel and a care home.  We
foresee substantial growth in the healthcare sector in coming years and we
intend to use our development and fund management skills to build a presence in
this market.

Triple Net Asset Value

Our proforma Triple Net Asset Value ('TNAV') per share at 30th April 2006 was
52.65p up from 48.06p per share at October 2005 an increase of 9.55%.

TNAV revalues our trading assets to current value and deducts tax that would
arise on their disposal. TNAV is the principal means by which we measure our
performance.

Balance Sheet

Total Group assets at 30th April 2006 were £197.9 million compared to £173.4
million at October 2005 and net assets after minority interests, were £80.2
million (£77.6 million at October 2005) an increase of 3.4%.

Bank debt of £75.6 million net of £8.3 million cash stood at 94.2% of equity
(85.0% October 2005).  Of the bank debt 61.4% was with limited or no recourse to
the parent company.  Properties held as investments were £57.4 million
comprising £41.6 million residential and £15.8 million commercial compared with
£52.9 million at October 2005.  Work in progress was £97.5 million (£89.2
million October 2005).

Profit and Loss Account

Profit before tax for the period was £3.7 million (6 months to April 2005 £0.4
million). Operating profit at £4.5 million (6 months to April 2005 £1.2 million)
reflected a higher number of disposals of completed developments in the period.

Dividend

The directors have decided to pay an interim dividend in respect of the half
year under review of 0.7p per share (6 months to April 2005: 0.5p).  This will
be paid on 25th August 2006 to shareholders on the Register at 11th August 2006.
The dividend increase reflects our progressive dividend policy and confidence in
the future.

The Future

The purchase of Nationwide's at.home portfolio has seen us rebuild our presence
in the residential investment market. The high quality of the properties linked
to the growth in residential values since the deal was agreed early in the year
is likely to have significant impact on our TNAV at the year end.  In the past
we have sold much of our residential investment and realised the increase in
value and whilst this remains an option we are investigating the potential of
creating a residential fund or REIT which might allow us to benefit from the
performance of the portfolio in the future whilst capturing any immediate uplift
in value today.

Our plans to de-merge a house building company from the main Group are advancing
well and we expect this to have a significant impact on existing shareholder
value in the future.

The commercial development programme continues to mature well and the prospect
for substantial schemes in the fast moving south east market at our sites at
Maidenhead, Pinewood Wokingham and Croydon promise excellent returns.

Our management team has been further strengthened by the recruitment of Miss
Nicky Wilden as Corporate Finance Director who will be joining us in September.
Nicky, a qualified accountant and FSA registered has extensive experience over
many years of corporate finance in the property sector.

In summary, I am confident that we will show excellent further growth in TNAV
over the rest of the year and beyond.


Robert F M Adair
Chairman

4 July 2006



TERRACE HILL GROUP PLC

UNAUDITED CONSOLIDATED PROFIT & lOSS ACCOUNT

                           6 months to           Year to       6 months to
                             30-Apr-06         31-Oct-05         30-Apr-05
                                  £000              £000              £000
                           (unaudited)       (unaudited)       (unaudited)
                           ____________      ____________      ____________
TURNOVER
Group and share of              
joint venture                   23,377            28,119            11,924
Less: Share of joint
venture turnover                   (34)           (1,269)           (1,256)
                           ____________      ____________      ____________
Group turnover:
continuing operations           23,343            26,850            10,668

GROUP OPERATING PROFIT
Continuing operations            4,485             3,966               927
Share of joint venture
operating (loss)/profit            (29)              202               259
                           ____________      ____________      ____________
TOTAL OPERATING PROFIT           4,456             4,168             1,186

Continuing operations:
Amounts written off 
unlisted investments                 -               (12)                -
Gain/(loss) on disposal 
of other fixed asset                
investments                         30                (1)               (1)
Net gain on disposal
of investment property              36             3,495               997
Gain/(loss) on disposal 
of subsidiary undertakings         575              (108)             (123)
Income from other fixed 
asset investments                   89                15                 -

Net interest payable            (1,444)           (3,320)           (1,672)
                           ____________      ____________      ____________
PROFIT ON ORDINARY
ACTIVITIES BEFORE TAX            3,742             4,237               387
Taxation charge                   (955)             (763)                -
                           ____________      ____________      ____________
PROFIT ON ORDINARY
ACTIVITIES AFTER TAX             2,787             3,474               387
Minority interest                    2                 4                 5
                           ____________      ____________      ____________
PROFIT ATTRIBUTABLE TO
MEMBERS OF PARENT COMPANY        2,789             3,478               392
                           ____________      ____________      ____________
Basic and diluted                1.490p            1.864p            0.211p
earnings per share
                           ____________      ____________      ____________



TERRACE HILL GROUP PLC

UNAUDITED SUMMARISED CONSOLIDATED BALANCE SHEET

                                          30-Apr-06           31-Oct-05           30-Apr-05
                                               £000                £000                £000
                                        (unaudited)         (unaudited)         (unaudited)
                                                             (restated)          (restated)
                                        ____________        ____________        ____________
FIXED ASSETS
Intangible Assets: Positive                   
goodwill                                      4,486               4,465               3,079
Negative goodwill                            (1,070)             (1,178)             (1,864)
                                        ____________        ____________        ____________
                                              3,416               3,287               1,215
Tangible Assets
Investment properties                        57,359              52,899              76,414
Other                                            43                  59                 186
                                        ____________        ____________        ____________
                                             57,402              52,958              76,600
Investments
Joint venture- share of gross                 
assets                                        5,019               4,958               3,573
Joint venture-share of gross
liabilities                                  (4,982)             (4,802)             (3,243)
                                        ____________        ____________        ____________
                                                 37                 156                 330

Other fixed asset investments                 3,991               2,599                 123
                                        ____________        ____________        ____________
                                              4,028               2,755                 453
                                        ____________        ____________        ____________
                                             64,846              59,000              78,268
CURRENT ASSETS
Work in progress                             97,518              89,162              67,752
Debtors                                      27,343              13,207              20,601
Cash at bank and in hand                      8,289              12,052               8,700
                                        ____________        ____________        ____________
                                            133,150             114,421              97,053
CREDITORS: amounts falling due
within one year
Borrowings                                   (6,476)            (11,325)            (19,454)
Other creditors                             (28,072)            (17,342)             (9,724)
                                        ____________        ____________        ____________
                                            (34,548)            (28,667)            (29,178)
                                        ____________        ____________        ____________
NET CURRENT ASSETS                           98,602              85,754              67,875
                                        ____________        ____________        ____________
TOTAL ASSETS LESS CURRENT 
LIABILITIES                                 163,448             144,754             146,143

CREDITORS: amounts falling due
after more than one year                    (82,874)            (66,758)  (70,487))
PROVISIONS FOR LIABILITIES AND
CHARGES                                           -                   -                (122)
                                        ____________        ____________        ____________
NET ASSETS                                   80,574              77,996              75,534
                                        ____________        ____________        ____________
CAPITAL AND RESERVES
Called up share capital                       3,744               3,744               3,716
Shares to be issued                               -                   -                 558
Share premium account                        19,369              19,369              19,369
Revaluation reserves:
     Investment properties                   17,973              17,268              21,308
     Other                                      375                  23                  24
Capital redemption reserve                      849                 849                 849
Merger reserve                                8,386               8,386               7,875
Profit and loss account                      29,529              28,007              21,486
                                        ____________        ____________        ____________
SHAREHOLDERS FUNDS                           80,225              77,646              75,185
MINORITY INTERESTS                              349                 350                 349
                                        ____________        ____________        ____________
                                             80,574              77,996              75,534
                                        ____________        ____________        ____________


TERRACE HILL GROUP PLC

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

                        6 months to            Year to        6 months to
                        30-Apr-2006          31-Oct-05          30-Apr-05
                               £000               £000               £000
                        (unaudited)        (unaudited)        (unaudited)
                        ____________       ____________       ____________
Profit attributable 
to members of the
parent company 
excluding share of
profit/(loss) of              
joint venture company         2,908              3,415                155
Share of joint venture 
profit/(loss) for 
period                         (119)                63                237
                        ____________       ____________       ____________
Profit attributable to        
members of the parent 
company                       2,789              3,478                392

Unrealised surplus 
on revaluation of 
properties                      749              3,735              3,391

Unrealised surplus
on revaluation of               
unlisted investments            352                  6                  3
                        ____________       ____________       ____________
Total recognised gains 
and losses relating           
to period                     3,890              7,219              3,786
                        ____________       ____________       ____________



GROUP STATEMENT OF CASH FLOWS

                                      6 months to               Year to           6 months to
                                        30-Apr-06             31-Oct-05             30-Apr-05
                                      (unaudited)           (unaudited)           (unaudited)
                                             £000                  £000                  £000
                                      ____________          ____________          ____________
Cash (outflow) from operating
activities                                (13,234)              (48,931)              (50,788)
Returns on investments and
servicing of finance                       (2,194)               (6,138)               (1,806)
Taxation                                     (255)                 (992)                 (769)
Capital expenditure and
financial investment                        1,217                54,102                32,363
Acquisitions and disposals                  6,158                (4,903)                 (216)
Equity dividends paid                      (1,311)               (1,865)                 (929)
                                      ____________          ____________          ____________
Cash (outflow) before liquid
resources and financing                    (9,619)               (8,727)              (22,145)
Financing                                   5,606                 2,735                13,168
                                      ____________          ____________          ____________
(Decrease) in cash                         (4,013)               (5,992)               (8,977)
                                      ____________          ____________          ____________


Reconciliation of group operating profit to net cash (outflow) from operating activities

                                             £000                  £000                  £000

Operating profit                            4,485                 3,966                   927
Depreciation                                   41                    84                    47
Loss on sale of other tangible 
fixed assets                                    -                   128                    12
Positive goodwill amortisation and            
impairment losses                             186                   469                    69
(Increase) in stock                       (24,217)              (41,893)              (22,854)
(Increase)/decrease in debtors            (14,290)                3,591                (7,925)
(Increase)/decrease in creditors           20,561               (15,276)              (21,064)
                                      ____________          ____________          ____________
Net cash (outflow) from
operating activities                      (13,234)              (48,931)              (50,788)
                                      ____________          ____________          ____________


TERRACE HILL GROUP PLC

GROUP RECONCILIATION OF SHAREHOLDERS' FUNDS

                         6 months to            Year to        6 months to
                           30-Apr-06          31-Oct-05          30-Apr-05
                                £000               £000               £000
                         (unaudited)        (unaudited)        (unaudited)
                                             (restated)         (restated)

Total recognised               
gains and losses               3,890              7,219              3,786
New shares issued                  -                 28                  -
Shares to be issued                -                  -                558
Merger reserve arising 
on new shares issued               -                530                  -
Purchase of own shares        
by subsidiary                      -                (36)                 -
Dividend paid to
ordinary shareholders         (1,311)            (1,865)              (929)
                         ____________       ____________       ____________
Total movements                
during the year                2,579              5,876              3,415
Opening shareholders' 
funds - as restated           77,646             71,770             71,770
                         ____________       ____________       ____________
Closing shareholders' 
funds                         80,225             77,646             75,185
                         ____________       ____________       ____________

          
Note:     Comparative figures for prior periods have been restated in line with
          the requirements of Financial Reporting Standards 21 and 25.  
          Otherwise the accounting policies adopted are consistent with those 
          applied in year ended 31 October 2005.

          The effect of the restatement on the balance sheet is to increase the 
          net assets at 31 October 2005 by £1,310,532 (April 2005 - £936,094, 
          October 2004 - £929,117) due to the write back of the proposed 
          dividends at 31 October 2005 (and 30 April 2005 and 31 October 2004.)


NOTES

BASIS OF PREPARATION

These interim accounts are unaudited but have been reviewed by the auditors
whose review report is set out on page 8.  The abridged financial information
relating to the year ended 31 October 2005 is based on an extract from the
latest financial statements, which have been filed with the Registrar of
Companies.  The report of the auditors on these financial statements was
unqualified and did not contain a statement under section 237(2) or (3) of the
Companies Act 1985. The financial information summarised above does not
constitute statutory accounts within the meaning of section 240 of the Companies
Act 1985.

EARNINGS PER ORDINARY SHARE

The calculation of basic and diluted earnings per ordinary share is based on the
following:

                                6 months to          Year to      6 months to
                                  30-Apr-06        31-Oct-05        30-Apr-05
                                       £000             £000             £000

Profit                                2,789            3,478              392
                                ____________      ___________     ____________
The weighted average number 
of ordinary shares in issue 
during the period: Basic and 
diluted half-yearly report      187,218,824      186,576,536      185,923,602
                                ____________      ___________     ____________

The half-yearly report will be posted to shareholders shortly and copies will be
available, free of charge for one month, from the Company Secretary, Terrace
Hill Group PLC, James Sellars House, 144 West George Street, Glasgow, G2 2HG.

For further information please contact:

Robert Adair, Chairman                                       Tel: [phone]
Philip Leech, Group Managing Director                        Tel: [phone]
Alasdair Robinson, Noble & Company Limited                   Tel: [phone]
Isabel Crossley, St Brides Media & Finance Ltd               Tel: [phone]



                      This information is provided by RNS
            The company news service from the London Stock Exchange