Interim Results

TR Property Investment Trust PLC 23 November 2005 23 November 2005 TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 Highlights * Revenue earnings per share increase of 23.7% * Share price total return increase of 23.5% * Net asset value increase of 21.5% * Dividend per share increase of 15.4% Peter Salsbury, Chairman of TR Property Investment Trust, commented: 'Investor demand for commercial property and for property shares has remained extremely robust over the summer and this is well reflected in the Trust's results for the six months ended September 2005 - with both the net assets per share and the share price showing increases of over 20%. Revenue earnings have also increased by over 20%, and the total returns have again exceeded the benchmark. 'We continue to find value in the shares of the larger UK property companies, and they also provide us with the comfort of lower gearing, longer leases and lower levels of variable debt than we can find in most listed property shares outside the UK. There also remains the upside potential if the Government does introduce workable REIT legislation in 2006, as I expect that this is likely to lead to an upward re-rating of the UK property share sector.' Dividend An interim dividend of 1.50p (2004: 1.30p) per ordinary share has been declared payable on 6 January 2006 to shareholders on the register on 9 December 2005. The shares will be quoted ex-dividend on 7 December 2005. - MORE - - 2 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 Financial Highlights Half year ended Half year ended 30 September 30 September 2005 2004 Revenue (Unaudited) (Unaudited and % restated) Change Total revenue income (Â£'000) 15,036 13,423 +12.0 Income from operations before tax (Â£'000) 10,872 9,356 +16.2 Earnings per ordinary share 32.92p 13.08p +151.7 Revenue earnings per ordinary share 2.66p 2.15p +23.7 Net dividend per share 1.50p 1.30p +15.4 As at As at 30 September 31 March Balance Sheet 2005 2005 (Unaudited) (Audited and % restated) Change Investments held at fair value (Â£'000) 704,575 598,395 +17.7 Shareholders' funds (Â£'000) 612,360 507,650 +20.6 Shares in issue at end of period (m) 343.9 346.4 -0.7 Gearing 14% 16% Net asset value per share 178.09p 146.56p +21.5 Performance Half year ended Half year ended Assets and Benchmark 30 September 30 September 2005 2004 Benchmark performance (price only) +17.3% +8.9% NAV change +21.5% +10.7% Benchmark performance (total return) +20.2% +12.0% NAV total return +22.7% +12.3% IPD Monthly Index total return* +9.1% +9.5% Total return from direct property +8.2% +4.4% Performance Half year ended Year ended Share Price 30 September 31 March % 2005 2005 Change Share price 157.0p 128.5p +22.2 Share price total return +23.5% +38.5% Market capitalisation Â£540m Â£445m +21.3 Sources: Thames River Capital/*IPD monthly, six months cumulative - MORE - - 3 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 Chairman's Statement Introduction Investor demand for commercial property and for property shares has remained extremely robust over the summer and this is well reflected in the Trust's results for the six months ended September 2005 - with both the net assets per share and the share price showing increases of over 20%. Revenue earnings have also increased by over 20%, and the total returns have again exceeded the benchmark. Meanwhile, at the EGM in July, shareholders substantially rejected the motion to change the name of the Trust. New Accounting Standards (IFRS) Before giving further details of the interim performance, I should like to draw shareholders' attention to changes in the format and preparation of the interim report. In common with all UK listed companies producing consolidated accounts, the Trust has adopted International Financial Reporting Standards ('IFRS'). The interim results are prepared under these standards, and the financial statements reflect the new formats. A detailed explanation of the changes can be found in the Finance Report (starting on page 10). Comparisons between the current and previous numbers are detailed in the notes to the financial statements. The two main numerical changes involve: â€¢ The valuation of our share portfolio on bid prices rather than mid-market prices, as previously. This reduces shareholders' funds by around Â£0.5m; â€¢ The recognition of the dividend as payable only after it has been declared. Thus, these interim results do not accrue the interim dividend, now announced, as it had not been declared at the end of September. This change adjusts shareholders' funds upwards by the amount of the dividend (some Â£5.2m at the interim stage). We are conscious that these changes make the accounts longer and more difficult to follow than before. We have therefore made our explanatory notes as full as possible. Overall the impact of IFRS on the substance of the numbers is not significant. Asset and Share Price Performance Over the six-month period the net asset value (calculated under IFRS) increased by 21.5% from 146.6p to 178.1p, while the share price rose by 22.2% from 128.5p to 157.0p. The total returns were +22.7% for the NAV and +23.5% for the share price. These gains outpaced those of our benchmark index which rose by 17.3% and showed a total return of +20.2%. They also outpaced the FTSE All Share Index which produced a total return of 13.7% over the period. Across the whole of Europe, property shares rose, reflecting the very strong investor demand for physical real estate and the continued benign bond market outlook. Continental property share prices produced an average total return in Sterling of 24.9%, aided by an outstanding performance from Spain, where the total return was 59%. UK property shares were much more subdued, though their six months' total return of 15.4% was more than acceptable. Their relative underperformance was due, in part, to the lack of further positive news regarding the potential introduction of listed tax-transparent property vehicles (REITs) as well as to fears that weaker consumer demand will affect the future rental value of shop property. - MORE - - 4 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 Revenue Results The revenue earnings in the six-month period were 2.66p per share compared with 2.15p in the first six months of last year: a percentage increase of 23.7%. Our investment income rose by an exceptional 21.0%, in part due to large dividend increases from some of our bigger investments, and in part due to timing differences. Our rental income declined slightly, reflecting sales of income-producing property, so that, overall, total income increased by 12.0%. Management fees grew in line with the increase in net assets, and interest costs increased due to the higher level of borrowings and increased base rates. The pre-tax revenue gain is 16.2%. The percentage growth in earnings is higher than the pre-tax revenue growth because tax is estimated at 15.7% compared with 18.7% in the first half of last year, and because there are fewer shares in issue as a result of share repurchases. The Trust continues to receive a growing percentage of its full year dividend income in the first half of the financial year. Our managers expect that, subject to unforeseen circumstances, gross revenue for the half year now reported will represent some 71% of our expected full year gross revenue, as against 68% last year. Shareholders should not expect the same rate of gross revenue or earnings growth in the full year. Interim Dividend The Board has pleasure in raising the interim dividend by 15.4% from 1.30p per share to 1.50p per share. The dividend will be paid on 6 January 2006 to shareholders on the register on 9 December 2005. Portfolio Distribution The distribution of the portfolio shows only modest change since the end of March, with the decrease in UK equities from 54.2% to 51.2% and the commensurate increase in European equities. Under current circumstances this distribution is unlikely to alter significantly in the remainder of the financial year. Gearing and Currencies Over the six-month period, the Trust's net debt rose from Â£81m to Â£89m, but the growth in the value of our assets was such that the gearing ratio declined from 16% to 14%. In the current investment outlook, the Board anticipates that gearing will remain in the 10% to 25% range over the remainder of the current financial year. All of our debt continues to be denominated in Sterling and our portfolio exposure to foreign currency assets and income continues to be unhedged. In the six-month period, March to September, Sterling rose against the Euro by 0.9%. Discount and Share Repurchases The share price discount to NAV narrowed over the summer, averaging 9.4% over the six-month period (versus an average of 11.5% in the year to March 2005). As a result, opportunities to make worthwhile share repurchases were scarcer. In all, the Trust bought back a total of 2.516 million shares for cancellation during the first half, for a cost of Â£3.34m and at an average price of 132.75p. The average immediate discount for the repurchases was 13.25% and the enhancement to shareholders' funds from the buybacks was some Â£450,000. - MORE - - 5 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 Outlook The upward path of commercial property value growth has continued across Europe over the summer, and the initial yields which investors are prepared to accept continue to decline. With hindsight, therefore, some of my comments on the outlook made in the 2005 Annual Report seem rather gloomy, or at least premature. I am not pessimistic but do recognise that, having had such an outstanding period of asset value growth over the last five years, we need to be vigilant and watch for signs and signals that may tell us when the long bull market in commercial property may be coming to an end. The Fund Management team has been further strengthened to increase its capacity to identify suitable new areas of opportunity. For the time being, we continue to find value in the shares of the larger UK property companies, and they also provide us with the comfort of lower gearing, longer leases and lower levels of variable debt than we can find in most listed property shares outside the UK. There also remains the upside potential if the Government does introduce workable REIT legislation in 2006, as I expect that this is likely to lead to an upward re-rating of the UK property share sector. - MORE - - 6 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 Manager's Report Introduction European commercial property markets and property share markets have had another very good summer. The fund remained geared throughout the period and, though our top down portfolio weightings were once more awry - overweight the underperforming UK property share market - stock selection and gearing came to the rescue and we were able to outperform the benchmark again. As the Chairman comments, global investment mania for commercial property remains firmly in place. For those of us reared in earlier markets, when property was regularly shunned as an asset class, being flavour of the month for so long comes as a shock. As should be expected, many professional forecasters, property company executives and media pundits have already called the top of the market, only to see their expectations unfulfilled. Their siren voices will eventually be right, but timing is as important as directional sense in this investment game. If we go back to first principles, it is about yield. The core of the investment demand for let property is the search by investors for assets capable of producing stable high yields, with some inflation protection. In the current decade, with its heightened concern for future pension provision, investors appear to be rewriting downwards the definition of 'high' in high yield in property, bond and equity markets. Currently, UK inflation is around 2%, the FTSE All Share Index yields 3.5%, 10-year Government bonds yield 4.25% and the UK All Property average initial yield is 5.4%. This may not be quite the familiar yield pattern to which we are accustomed, but property's place in this yield line-up does not immediately suggest that the asset class is grossly overpriced. European Commercial Property Market Background The market trends we reported in the annual report (huge investment demand and a weak but generally improving tenant demand) have remained in place throughout the summer. Across the whole of Europe a flood of international capital is trying to find a home in the commercial property market. Market activity is at record levels. In the UK, investment market turnover is forecast to be a record Â£50 billion this year and the All Property average initial yield has fallen from just under 5.9% at December 2004 to a current level of 5.4%; low territory, never previously entered. Elsewhere in Europe, we have less accurate yield and turnover figures, but the pattern is exactly the same. Tenant demand has improved - a little - but is still generally tentative and fickle. Office tenant demand has yet to improve to meet the long term average level and most markets have plenty of supply. Retail tenant demand has remained stable in most areas, though in the UK, the decline in the rate of growth of retail sales volumes has given rise to plenty of doom and gloom comment. Evidence from centre owners suggests that tenant demand remains positive, save in the bulky goods sector of the retail warehouse market. - MORE - - 7 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 Property Share Background European property shares have continued to prosper, reflecting the hugely positive level of investor activity in the direct property markets. Country performance has been surprisingly diverse, given that the outlook for earnings and asset value growth is very similar across the region. The unexpected top performer has been Spain, where the six-month total return was 59%, caused principally by a major re-rating of the local companies from discounts to premiums to net asset value. German property shares also performed strongly, returning 28%, against our expectations. The German commercial property market remains in the doldrums and the gains were based on hopes that REITs will be introduced there in 2006. The major disappointment was the UK where there has been no discount-to-premium re-rating, and where the total return, at 15.4%, was worsened only by Greece, Austria and Belgium. UK property shares, particularly the shares of the larger companies, still stand at discounts to their net asset values of between 10% and 20%, whereas virtually every major continental property share is now priced at above net asset value, with premiums mainly in the 15% to 30% range. The immediate causes for the UK's underperformance over the period were the lack of news on the possible introduction of REITs, and the fear of weaker consumer demand with impact on future retail tenant demand, as - Slough Estates excepted - all the big UK property companies have substantial investments in shopping centres. Another sign that UK shares are undervalued relative to non-UK stocks has been corporate activity. In the UK we have had three cash takeovers in the period (Ashtenne, Pillar and Tops) with very little share issuance from the mainstream property companies. In Europe, Gecina aside, there has been little takeover activity, but rights issuance has risen with calls coming with increasing frequency. Investment Activity and Distribution of Assets Our equity market turnover (purchases plus sales divided by two) in the six months was some Â£50m compared with Â£39m in the comparable period last year. We saw gains from 99.7% of our equity investments. The exceptions were two very small UK holdings, where the declines were both in single percentage figures. Our best gains were mainly on the Continent with the Spanish shares, Urbis (+61%) and Metrovacesa (+48%) leading the way. In the UK, Helical Bar rose 45%, and St Modwen and Big Yellow both rose 25%. The largest UK shares, in which we have significant overweight positions, all underperformed the benchmark. British Land (+17%) and Land Securities (+14%) did best, followed by Hammerson (+12%) and Slough (+9%), with Liberty International trailing with only a 3% price rise due to concern over the trend in UK retail expenditure. The geographical distribution of the portfolio has shown little alteration over the period. We continue to favour the UK over the Continent on share price value grounds, retaining over half our equity investments here, as well as our entire direct property portfolio. It is also of comfort to note that the UK companies have more conservative balance sheets and greater future income visibility than European companies. The average leverage in the UK sector is under 40%, while on the Continent it is over 60%. The unexpired lease terms in company portfolios average six years in the UK, and three and a half years on the Continent, while the average terms of the UK companies' loan books is twice that of the Continental companies, and their exposure to variable rate debt is also lower. The distribution of the portfolio by property use has shown some changes since March. Then we had 44% of our portfolio in retail property on a see-through basis, 35% in office property, 10% in industrial, 8% in residential and 3% in other uses (mainly hotels and leisure). At the end of September, the retail percentage had fallen to 38%, offices had risen slightly to 36%, industrial had climbed to 14%, residential remained at 8% and other uses had risen to 4%. - MORE - - 8 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 Largest Equity Investments The list of our top forty investments is shown on page 26. Significant changes are few. Into the top ten, from twelfth place in March, has come Metrovacesa. Though it is quoted in Madrid, the company's portfolio is one-half invested in France. The share price rose by 48% over the interim period. Three of our top forty shareholdings at March left the list as a result of cash takeover bids - Ashtenne and Pillar in the UK, and Gecina in France. The largest new entries are Immoeast, an Austrian quoted company which is entirely invested in Eastern Europe, and Orchid Developments, a Bulgarian commercial and residential developer. Direct Property Portfolio The direct property portfolio totalled Â£69.333 million at the half year, up from Â£56.371 million at the March year end. This represented 9.8% of the total portfolio. During the period, the property in Wootton Bassett was sold for Â£2.026 million and a property in Slough was purchased for Â£10.56 million. The direct portfolio total return was 8.16%. This is made up of capital growth of 5.74% and an income return of 2.42%. On a like-for-like basis, the portfolio return was 9.05%, split between capital growth of 6.11% and income of 2.94%. This is exactly in line with the performance of the Investment Property Databank monthly index. We reported on May's purchase of the freehold interest in a vacant 64,000 sq ft office building in Slough in the March 2005 year-end report and accounts. Since purchasing the property, we have re-commissioned all of the mechanical, electrical and building systems and re-launched the building with a new name: Thames Central. Initial reaction to the launch has been encouraging and we are pleased to have agreed terms with a number of tenants at or above our target rent. In June we completed the sale of the warehouse in Wootton Bassett for Â£2.026 million, in line with the March year-end valuation and substantially ahead of the September 2004 valuation of Â£1.4 million. Since the end of September, we have taken advantage of continuing demand for City offices and completed the sale of the Trust's office property at 6 Lloyd's Avenue, London EC3. The price achieved was Â£10.25 million, which compares to a price of Â£8.275 million at purchase in June last year. In the intervening period we completed a refurbishment of the 3,900 sq ft lower ground floor, which was entirely vacant at the time of purchase, and completed lettings of all but 710 sq ft. Unquoted Investments The final sale of our investment in Controlrun was completed in April, and the Trust currently has no unquoted equity investments. Looking Ahead to 2006 The momentum of demand for direct property investment shows little sign of abating, and this leads us to believe that UK property yields have still further to fall, albeit that the room for further decline is becoming more limited. Property market forecasters currently expect 2006 to bring only very modest capital value growth in the UK, and for total returns to drop back from mid to high teens to single figures. It has to be said that similar forecasts, in previous years, have undershot the eventual outcome significantly. - MORE - - 9 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 The big event for UK property shares in the next five months should be the announcement of the Government's intentions regarding REITs. Some comment is expected in the Chancellor's autumn statement. If that is positive, then we believe we can expect REITs to be introduced in the 2006 Budget. For property companies, much will depend on how REITs are to be organised and funded. It is by no means certain that the proposals, if announced, will be financially workable. If they are, then we should expect UK property shares to increase by a meaningful amount from their current levels. If the news is negative, shares will decline but, given that discounts to NAV are currently already present, the size of the decline should not be as great as the potential uplift, as widening discounts will re-awaken the potential gains to be made from taking companies private and selling their real estate portfolios into the investment market. - MORE - - 10 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 Finance Report - IFRS TR Property Investment Trust plc produces consolidated accounts and therefore is obliged to adopt international accounting standards ('International Financial Reporting Standards' or 'IFRS') for the financial year ending March 2006. These interim financial statements have also been prepared under IFRS and on the basis of the accounting policies expected to be adopted in the full year financial statements to 31 March 2006. It must be noted that the standards continue to evolve. Further standards may be issued before 31 March 2006 and/or guidance notes on the interpretation of the standards for Investment Trust Companies may be issued by the AITC (Association of Investment Trust Companies). This could result in the need to change the basis of accounting or presentation of certain financial information, from that applied in these interim accounts. The financial statements are presented in the new formats. The accounting policies adopted are set out, together with reconciliations of restated opening balances detailing the differences between the figures as previously reported under UK GAAP and under IFRS. The more important changes are described below. This description is not intended to be comprehensive. The accounting policies are set out in full in the notes to the financial statements. However, we hope that this description helps the reader of the financial statements understand them in their new format. Group Income Statement The Group Statement of Total Return has been replaced by the Group Income Statement. Under IFRS there is no differentiation between capital and revenue gains and losses. However, as an Investment Company, only the revenue earnings of TR Property Investment Trust plc may be distributed. The three-column presentation setting out revenue and capital items has therefore been retained by Investment Trust Companies. Dividends The Group Income Statement shows the profit for the period before any distributions. Dividends are shown in a new statement: the Group Statement of Changes in Equity. Dividend distribution to the Company's shareholders is recognised as a liability in the financial statements for the period in which the dividends are approved. The dividend shown in the interim accounts is the final dividend in respect of the year ended 31 March 2005 declared on 24 May 2005. The interim dividend in respect of the period reported in these financial statements, declared today, will be shown in the final financial statements for the year. This differs from the previous treatment, where dividends were accrued against the earnings to which they related, even though they were not declared and paid until after the period end. Fair Value of Investments IFRS requires that quoted investments are valued at 'bid' (selling) prices whereas previously they were shown at mid-market prices. The impact of this change is shown in each of the Opening Balance Reconciliations in notes 3-5 to the financial statements. On the Group Balance Sheet, they are now included as 'non-current assets' instead of 'fixed assets'. - MORE - - 11 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 Transaction Costs Previously, the transaction costs relating to purchases were included in the book value of the holding and so were included within the gains on investments on the Group Statement of Total Return. Under IFRS these have to be separately identified and expensed, and so now form part of the expenses charged to capital. There is no effect on the portfolio value or profit for the period. It must be emphasised that, although these expenses appear in the same part of the Group Income Statement as the management fees and operating costs of the Trust, they are not related to these in any way and should not be considered as part of the Total Expense Ratio of the Trust. Furthermore, these may appear to be high in relation to other investment trusts: this is because, as a specialist property trust, TRPIT holds direct property and the costs of purchase include stamp duty, agents' fees, due diligence and legal costs which can amount to some 5.75%. Leasehold Investment Properties In countries with a leasehold tradition, such as the UK, leasehold investment properties have not, in the past, been treated very differently from freeholds. The valuer makes allowances for the rent that the 'owner' of the leasehold must pay to the superior landlord, and for the fact that the property will ultimately revert to the superior landlord at the end of the lease. IAS 40 on investment properties and IAS 17 on leases allow leasehold investment properties to appear in the balance sheet as investment properties, but the accounting treatment of freehold and leasehold properties is very different. As under the previous accounting convention, freehold properties are carried in the financial statements at fair value - i.e. valuation. Any leasehold property, however, must be treated as if it is held under a finance lease and the present value of the rental payments to be made to the superior landlord over the life of the lease must be shown as a liability in the balance sheet. The investment property is carried at fair value (i.e. valuation), with the present value of the rental payments made under the headlease added back (as these have been allowed for in the valuation). The net carrying value is therefore the same as under the previous convention. However, a balance sheet liability has been created where none was previously shown, thus introducing financial gearing where none existed before. One property in our portfolio has been accounted for in this way: our long leasehold at Cambridge. The liability for the future ground rent payments of Â£1.4m is included in the Group Balance Sheet Current Liabilities. Under IAS 40, any revaluation gains on investment properties must be taken directly to the Group Income Statement rather than the revaluation reserve. The presentation of this on the Group Income Statement does not differ from that shown previously on the Group Statement of Total Return. In the Group Balance Sheet, however, these gains form part of the retained earnings, rather than a revaluation reserve. Gross Rental Income Rental income includes all service charges and other costs recovered from the tenants. The amounts paid to third parties for the provision of all services are then deducted as an expense in the Group Income Statement. Previously, only the net rental was brought into the rental income line. The overall impact on net profit is therefore nil; however, the revenue and expense lines have been inflated by these service charge costs. - MORE - - 12 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 Valuation of Debt In accordance with the recommendation made by the AITC, TR Property Investment Trust plc has chosen not to fair value the debt shown in the financial statements. Debt is shown at amortised cost. The fair value of the debt will continue to be disclosed in the notes to the financial statements in the full annual report. Reported Daily NAVs TR Property Investment Trust plc reports a daily NAV to the London Stock Exchange. It should be noted that this is reported in accordance with the AITC recommendations and is not on the same basis as the numbers reported in these financial statements. The daily NAV is a capital only NAV and does not reflect retained earnings. Currently, quoted equities are valued at mid-market price, although it is anticipated that this will move to bid (in accordance with IFRS) from 1 January 2006. Two NAVs are released, one valuing the debt at amortised cost, as in the financial statements, and the second marking the debt to fair value. - MORE - - 13 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 Group Income Statement for the half year ended 30 September 2005 Half year ended 30 September Half year ended 30 September Year ended 31 March 2005 2004 2005 (Unaudited) (Unaudited and restated) (Audited and restated) Revenue Capital Total Revenue Capital Total Revenue Capital Total Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Investment income 12,688 - 12,688 10,486 - 10,486 14,527 - 14,527 Other operating income 48 - 48 59 - 59 113 - 113 Gross rental income 1,648 - 1,648 2,134 - 2,134 3,870 - 3,870 Service charge income 652 - 652 744 - 744 1,231 - 1,231 Gains on investments held at fair value - 108,168 108,168 - 40,404 40,404 - 116,791 116,791 ----------- ---------- ---------- ---------- ---------- ---------- --------- --------- -------- Total income 15,036 108,168 123,204 13,423 40,404 53,827 19,741 116,791 136,532 ----------- --------- ---------- ----------- --------- ---------- --------- --------- -------- Expenses Management and 1,427 2,070 3,497 1,066 533 1,599 2,343 2,595 4,938 performance fees Direct property 861 - 861 1,317 - 1,317 2,242 - 2,242 expenses, rent payable and service charge costs Other expenses (note 5) 320 759 1,079 293 598 891 459 822 1,281 Finance costs (note 6) 1,556 1,559 3,115 1,391 1,300 2,691 2,904 2,904 5,808 ----------- --------- ---------- ----------- --------- ---------- --------- --------- -------- Total operating 4,164 4,388 8,552 4,067 2,431 6,498 7,948 6,321 14,269 expenses ----------- --------- ---------- ----------- --------- ---------- --------- --------- -------- Income from operations before tax 10,872 103,780 114,652 9,356 37,973 47,329 11,793 110,470 122,263 Taxation (1,712) 439 (1,273) (1,752) 577 (1,175) (1,795) 346 (1,449) ----------- --------- ---------- ----------- --------- ---------- --------- --------- -------- Net profit 9,160 104,219 113,379 7,604 38,550 46,154 9,998 110,816 120,814 ====== ====== ====== ====== ====== ====== ====== ====== ====== Earnings per ordinary 2.66p 30.26p 32.92p 2.15p 10.93p 13.08p 2.85p 31.63p 34.48p share (note 7) The total column of this statement represents the Group's Income Statement, prepared in accordance with IFRS. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Trust Companies. All items in the above statement derive from continuing operations. All income is attributable to the equity shareholders of the parent company. There are no minority interests. The final dividend of 1.55p in respect of the year ended 31 March 2005 was declared on 24 May 2005 and paid on 29 July 2005. This can be found in the Group Statement of Changes in Equity for the half year ended 30 September 2005. - MORE - - 14 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 Group Balance Sheet as at 30 September 2005 Half year ended Half year ended Year ended 30 September 2005 30 September 2004 31 March 2005 (Unaudited) (Unaudited and (Audited and restated) restated) Â£'000 Â£'000 Â£'000 Non-current assets Investments held at fair value (note 1(g)) 704,575 514,581 598,395 Current assets Debtors 2,648 1,162 2,182 Cash and cash equivalents 413 4,887 123 ----------- ----------- ----------- 3,061 6,049 2,305 Current liabilities 55,324 39,274 53,098 ----------- ----------- ----------- Net current liabilities 52,263 33,225 50,793 Total assets less current liabilities 652,312 481,356 547,602 Non-current liabilities 39,952 39,958 39,952 ----------- ----------- ----------- Net assets 612,360 441,398 507,650 ======= ======= ======= Capital and reserves Ordinary called up share capital 85,963 87,354 86,591 Share premium 37,063 37,063 37,063 Capital redemption reserve 36,342 34,951 35,714 Retained earnings 452,992 282,030 348,282 ----------- ----------- ----------- Equity shareholders' funds 612,360 441,398 507,650 ======= ======= ======= Net asset value per share 178.09p 126.32p 146.56p - MORE - - 15 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 Group Statement of Changes in Equity Share Capital Share Capital Retained Total Premium Redemption Earnings Reserve For the half year ended 30 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 September 2005 (unaudited) Net assets at 31 March 2005 86,591 37,063 35,714 348,282 507,650 Ordinary shares repurchased (628) - 628 (3,340) (3,340) Net gain for the period - - - 113,379 113,379 Ordinary dividends paid - - - (5,329) (5,329) ----------- --------- ---------- --------- ---------- Net assets at 30 September 2005 85,963 37,063 36,342 452,992 612,360 ====== ====== ====== ====== ====== Share Capital Share Capital Retained Total Premium Redemption Earnings Reserve For the half year ended 30 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 September 2004 (unaudited and restated) Net assets at 31 March 2004 88,604 37,063 33,701 245,978 405,346 Ordinary shares repurchased (1,250) - 1,250 (5,141) (5,141) Net gain for the period - - - 46,154 46,154 Ordinary dividends paid - - - (4,961) (4,961) ----------- --------- ---------- --------- ---------- Net assets at 30 September 2004 87,354 37,063 34,951 282,030 441,398 ====== ====== ====== ====== ====== Share Capital Share Capital Retained Total Premium Redemption Earnings Reserve For the year ended 31 March 2005 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 (audited and restated) Net assets at 31 March 2004 88,604 37,063 33,701 245,978 405,346 Ordinary shares repurchased (2,013) - 2,013 (9,006) (9,006) Net gain for the period - - - 120,814 120,814 Ordinary dividends paid - - - (9,504) (9,504) ---------- --------- ---------- --------- ---------- Net assets at 31 March 2005 86,591 37,063 35,714 348,282 507,650 ====== ====== ====== ====== ====== - MORE - - 16 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 Group Cash Flow Statement As at 30 September 2005 Half year ended Half year ended Year ended 30 September 2005 30 September 2004 31 March 2005 (Unaudited) (Unaudited and (Audited and restated) restated) Â£'000 Â£'000 Â£'000 Net cash inflow from operating activities 6,553 6,734 5,191 Investing activities Purchase of investments (59,529) (41,933) (88,778) Sale of investments 55,631 60,664 102,024 Loan stock redeemed (1,000) (250) (250) ----------- ----------- ----------- Net cash (outflow)/inflow from investing (4,898) 18,481 12,996 activities ----------- ----------- ----------- Net cash inflow before financing 1,655 25,215 18,187 ----------- ----------- ----------- Financing activities Purchase of own shares (3,340) (5,141) (9,006) Equity dividends paid (5,329) (4,961) (9,504) ----------- ----------- ----------- Net cash outflow from financing (8,669) (10,102) (18,510) ----------- ----------- ----------- (Decrease)/increase in cash (7,014) 15,113 (323) Effect of foreign exchange rate changes (65) (20) 27 ----------- ----------- ----------- Change in cash and cash equivalents (7,079) 15,093 (296) Net debt at start of period (81,460) (81,164) (81,164) ----------- ----------- ----------- Net debt at end of period (88,539) (66,071) (81,460) ======= ======= ======= Reconciliation of income from operations before tax to net cash inflow from operating activities Half year ended Half year ended Year ended 30 September 2005 30 September 2004 31 March 2005 (Unaudited) (Unaudited and (Audited and restated) restated) Â£'000 Â£'000 Â£'000 Net income from operations before tax 114,652 47,329 122,263 Gains on investments including transaction costs (107,406) (39,897) (115,969) Decrease/(increase) in operating debtors 819 388 (571) Increase in operating creditors 582 1,073 1,138 Net tax paid (670) (958) (403) Performance fees paid (1,424) (1,201) (1,267) ------------ ------------ ------------- Net cash inflow from operating activities 6,553 6,734 5,191 ======= ======= ======= - MORE - - 17 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 Notes to the Financial Statements 1. Accounting policies The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB), and interpretations issued by the International Financial Reporting Interpretations Committee of the IASB (IFRIC). These are the first financial statements prepared in accordance with IFRS. Previously, the financial statements were prepared in accordance with UK Generally Accepted Accounting Principles (UK GAAP) including the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies'. UK GAAP differs in certain respects from IFRS. When preparing the financial statements to 30 September 2005, the Directors have amended certain accounting and valuation methods applied in the UK GAAP financial statements to comply with IFRS. Reconciliations of group balance sheet, group statement of total return to the group income statement and group cash flow at date of conversion (1 April 2004) are shown in note 2. (a) Basis of preparation The financial statements are prepared on an historical cost basis, except for the measurement at fair value of investments. (b) Basis of consolidation The Group accounts consolidate the financial statements of the Company and its subsidiary undertakings to 30 September 2005. Undertakings, other than subsidiary undertakings, in which the Group has an investment representing 20% or more of the voting rights and over which it exerts significant influence, are treated as associated undertakings. The Group accounts include the appropriate share of the results and reserves of these undertakings based on the latest available accounts. Other undertakings, in which the Group has an investment representing 20% or more of the voting rights but where the directors consider that the Group does not exert significant influence, are not treated as associated undertakings and are accounted for as investments. (c) Income Dividends receivable on equity shares are treated as revenue for the period on an ex-dividend basis. Where no ex-dividend date is available, dividends receivable on or before the period end are treated as revenue for the period. Provision is made for any dividends not expected to be received. The fixed returns on debt securities and non-equity shares are recognised on a time apportionment basis and, if material, so as to reflect the effective yield on each such security. Interest receivable from cash and short term deposits is accrued to the end of the period. (d) Expenses All expenses and interest payable are accounted for on an accruals basis. An analysis of retained earnings broken down into revenue (distributable) and capital (non-distributable) items is given in note 7. In arriving at this breakdown, expenses have been presented as revenue items except as follows: - Expenses which are incidental to the acquisition or disposal of an investment; - Expenses are presented as capital where a connection with the maintenance or enhancement of the value of the investments can be demonstrated. In this respect, the investment management fees and finance costs are allocated 50% to revenue and 50% to capital to reflect the Board's expectations of long term investment returns. One third of the management fees is deemed to relate to the administration of the Trust and charged to revenue. The remainder is split on the same basis as interest and 50% charged to capital. The overall result is that two thirds of management fees are charged to revenue and one third to capital. All performance fees are charged to capital. The finance cost in respect of capital instruments other than equity shares is calculated so as to give a constant rate of return on the outstanding balance. - MORE - - 18 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 (e) Taxation The tax effect of different items of expenditure is allocated between capital and revenue using the Group's effective rate of tax for the year. The charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes. Deferred taxation is provided using the liability method on all timing differences, calculated at the rate at which it is anticipated the timing differences will reverse. Deferred tax assets are recognised only when, on the basis of available evidence, it is more likely than not that there will be taxable profits in the future against which the deferred tax assets can be offset. (f) Properties The purchase and sale of properties is recognised to be effected on the date unconditional contracts are exchanged. (g) Investments When a purchase or sale is made under contract, the terms of which require delivery within the timeframe of the relevant market, the investments concerned are recognised or derecognised on the trade date. All the Group's investments are defined under IFRS as investments designated as fair value through profit and loss but are also described in these financial statements as investments held at fair value. All investments are designated upon initial recognition as held at fair value and are measured at subsequent reporting dates at fair value, which, for quoted investments, is either the bid price or the last traded price, depending on the convention of the exchange on which the investment is quoted. Fair values for unquoted investments, or for investments for which there is only an inactive market, are included at directors' valuation, which is based on current market prices, trading conditions and the general economic climate. Where no reliable fair value can be estimated for such instruments, they are carried at cost, subject to any provision for impairment. (h) Movements in fair value Changes in the fair value of all investments held at fair value are recognised in the Group Income Statement. On disposal, realised gains and losses are also recognised in the Group Income Statement. (i) Non-current liabilities All loans and debentures are initially recognised at cost, being the fair value of the consideration received, less issue costs where applicable. After initial recognition, all interest-bearing loans and borrowings are subsequently measured at amortised cost. Amortised cost is calculated by taking into account any discount or premium on settlement. The costs of arranging any interest-bearing loans are capitalised and amortised over the life of the loan. (j) Foreign currency translation Transactions involving foreign currencies are converted at the rate ruling at the date of the transaction. Foreign currency monetary assets and liabilities are translated into Sterling at the rate ruling on the balance sheet date. Foreign exchange differences are recognised in the Group Income Statement. - MORE - - 19 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 2. Restatement of opening balances as at 31 March 2004 At 1 April 2005 the Company adopted International Financial Reporting Standards. In accordance with IFRS 1, First Time Adoption of Financial Reporting Standards, the following is a reconciliation of the figures at 31 March 2004 previously reported under the applicable UK Accounting Standards and in accordance with the Statement of Recommended Practice, to the restated IFRS results. (Audited) Previously reported 31 March 2004 Effect of Restated 31 transition to March 2004 IFRS Note Â£'000 Â£'000 Â£'000 Fixed asset investments 1 486,266 1,052 487,318 Current assets 8,342 - 8,342 Creditors: amounts falling due within one year 2 (53,668) 3,555 (50,113) -------------- -------------- ------------ Total assets less current liabilities 440,940 4,607 445,547 Creditors: amounts falling due after more than one year (40,201) - (40,201) -------------- -------------- ------------ 400,739 4,607 405,346 ======== ======== ======= Capital and reserves Called up share capital 88,604 - 88,604 Share premium 37,063 - 37,063 Capital redemption reserve 33,701 - 33,701 Other reserves 3 223,524 (223,524) - Revenue reserve / Retained earnings 1,2,3 17,847 228,131 245,978 -------------- -------------- ------------ 400,739 4,607 405,346 ======== ======== ======= Notes to the reconciliation 1. Investments are all classified as held at fair value under IFRS and are carried at bid prices which equates to their fair value of Â£485,912,000. They were carried at mid prices previously. The resultant difference of Â£354,000 is included in Retained earnings. The present value of the future lease payments on long leases in the investment property portfolio has been included both in the valuation and as a creditor. This is valued at Â£1,406,000. 2. No provision has been made for the final dividend on ordinary shares for the year ended 31 March 2004 of Â£4,961,000 as this was not declared until after the balance sheet date. Under IFRS the dividend is not recognised until declared. This is therefore added to retained earnings. 3. Under IFRS, there is no differentiation between capital and revenue gains/losses. The previous heading of Other reserves is now included under the heading Retained earnings. - MORE- - 20 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 3. (a) Restatement of balances as at 30 September 2004 At 1 April 2005 the Company adopted International Financial Reporting Standards. In accordance with IFRS 1, First Time Adoption of Financial Reporting Standards, the following is a reconciliation of the figures at 30 September 2004 previously reported under the applicable UK Accounting Standards and in accordance with the Statement of Recommended Practice, to the restated IFRS results. Previously reported Effect of Restated 30 September transition 30 September 2004 to IFRS 2004 Note Â£'000 Â£'000 Â£'000 Fixed asset investments 1 513,663 918 514,581 Current assets 6,049 - 6,049 Creditors: amounts falling due within one year 2 (42,501) 3,227 (39,274) -------------- ------------- -------------- Total assets less current liabilities 477,211 4,145 481,356 Creditors: amounts falling due after more than one year (39,958) - (39,958) -------------- ------------ -------------- 437,253 4,145 441,398 ======== ======= ======== Capital and reserves Called up share capital 87,354 - 87,354 Share premium 37,063 - 37,063 Capital redemption reserve 34,951 - 34,951 Other reserves 3 256,976 (256,976) - Revenue reserve / Retained earnings 1,2,3 20,909 261,121 282,030 -------------- -------------- -------------- 437,253 4,145 441,398 ======== ======== ======== Notes to the reconciliation 1. Investments are all classified as held at fair value under IFRS and are carried at bid prices which equates to their fair value of Â£513,266,000. They were carried at mid prices previously. The resultant difference of Â£397,000 is included in Retained earnings. The present value of the future lease payments on long leases in the investment property portfolio has been included both in the valuation and as a creditor. This is valued at Â£1,315,000. 2. No provision has been made for the interim dividend on ordinary shares for the half year ended 30 September 2004 of Â£4,542,000 as this was not declared until after the balance sheet date. Under IFRS the dividend is not recognised until declared. This is therefore added to Retained earnings. 3. Under IFRS, there is no differentiation between capital and revenue gains/losses. The previous heading of Other reserves is now included under the heading Retained earnings. - MORE- - 21 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 (b) Reconciliation of the Group Statement of Total Return to the Group Income Statement for the six months ended 30 September 2004 Under IFRS the Group Income Statement is the equivalent of the Group Statement of Total Return as reported previously. Per share Note Â£'000 p Total transfer to reserve per Group Statement of Total Return 41,655 11.80 Add back dividends paid and proposed on ordinary shares 1 4,542 1.29 Change from mid to bid basis at 31 March 2004 2 354 0.10 Change from mid to bid basis at 30 September 2004 2 (397) (0.11) ------------ ------------ Net profit per Group Income Statement 46,154 13.08 ======= ======= Notes to the reconciliation 1. All dividends authorised and paid during the period are dealt with through the Group Statement of Changes in Equity. 2. The portfolio valuations at 31 March 2004 and 30 September 2004 are required to be valued at fair value under IFRS. These values differ from the previous valuations by Â£354,000 and Â£397,000 respectively. (c) Reconciliation of the Group Cash Flow Statement for the six months ended 30 September 2004 Previously reported Effect of Adjusted cash flows transition cash flows 2004 to IFRS 2004 Note Â£'000 Â£'000 Â£'000 Net cash inflow from operating activities 1,2 9,291 (2,557) 6,734 Returns on investments and servicing of finance 1 (2,790) 2,790 - Taxation 2 233 (233) - Net cash inflow from financial investment 3 18,481 (20) 18,461 Equity dividends paid 4 (4,961) 4,961 - ------------- ------------- ------------- Net cash inflow before financing 20,254 4,941 25,195 Financing 4 (5,141) (4,961) (10,102) ------------- ------------- ------------- Increase in cash 15,113 (20) 15,093 Transfer of foreign exchange movements ------------- ------------- ------------- to reconciliation of cash and cash equivalents - 20 20 ------------- ------------- ------------- Total 15,113 - 15,113 ======== ======== ======== Notes to the reconciliation 1. Bank and debenture interest paid are now shown under operating activities rather than servicing of finance. 2. Taxation recovered is now disclosed under operating activities. 3. Foreign exchange movements now appear at the foot of the Group Cash Flow Statement within the reconciliation of cash and cash equivalents. 4. Dividends paid are now disclosed under financing. - MORE - - 22 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 4 (a) Restatement of balances as at 31 March 2005 At 1 April 2005 the Company adopted International Financial Reporting Standards. In accordance with IFRS 1 First Time Adoption of Financial Reporting Standards the following is a reconciliation of the figures at 31 March 2005 previously reported under the applicable UK Accounting Standards and in accordance with the Statement of Recommended Practice, to the restated IFRS results. Previously reported Effect of Restated 31 March transition 31 March 2005 to IFRS 2005 Note Â£'000 Â£'000 Â£'000 Fixed asset investments 1 597,348 1,047 598,395 Current assets 2,305 - 2,305 Creditors: amounts falling due within one year 2 (57,036) 3,938 (53,098) -------------- -------------- -------------- Total assets less current liabilities 542,617 4,985 547,602 Creditors: amounts falling due after more than one year (39,952) - (39,952) -------------- -------------- -------------- 502,665 4,985 507,650 ======== ======== ======== Capital and reserves Called up share capital 86,591 - 86,591 Share premium 37,063 - 37,063 Capital redemption reserve 35,714 - 35,714 Other reserves 3 325,339 (325,339) - Revenue reserve / Retained earnings 1,2,3 17,958 330,324 348,282 ------------- ------------- ------------- 502,665 4,985 507,650 ======== ======== ======== Notes to the reconciliation 1. Investments are all classified as held at fair value under IFRS and are carried at bid prices which equates to their fair value of Â£596,989,000. They were carried at mid prices previously. The resultant difference of Â£359,000 is included in Retained earnings. The present value of the future lease payments on long leases in the investment property portfolio has been included both in the valuation and as a creditor. This is valued at Â£1,406,000. 2. No provision has been made for the final dividend on ordinary shares for the year ended 31 March 2005 of Â£5,344,000 as this was not declared until after the balance sheet date. Under IFRS the dividend is not recognised until declared. This is therefore added to Retained earnings. 3. Under IFRS, there is no differentiation between capital and revenue gains/losses. The previous heading of Other reserves is now included under the heading Retained earnings. - MORE- - 23 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 Reconciliation of the Group Statement of Total Return to the Group Income Statement for the (b) year ended 31 March 2005 Under IFRS the Group Income Statement is the equivalent of the Group Statement of Total Return as reported previously. Per share Note Â£'000 p Total transfer to reserve per Group Statement of Total Return 110,932 31.66 Add back dividends paid and proposed on ordinary shares 1 9,887 2.82 Change from mid to bid basis at 31 March 2004 2 354 0.10 Change from mid to bid basis at 31 March 2005 2 (359) (0.10) ------------ ------------ Net profit per Group Income Statement 120,814 34.48 ======= ======= Notes to the reconciliation 1. All dividends authorised and paid during the period are dealt with through the Group Statement of Changes in Equity. 2. The portfolio valuations at 31 March 2004 and 31 March 2005 are required to be valued at fair value under IFRS. These values differ from the previous valuations by Â£354,000 and Â£359,000 respectively. (c) Reconciliation of the Group Cash Flow Statement for the year ended 31 March 2005 Previously reported Effect of Adjusted cash flows transition cash flows 2005 to IFRS 2005 Note Â£'000 Â£'000 Â£'000 Net cash inflow from operating activities 1,2 10,337 (5,146) 5,191 Returns on investments and servicing of finance 1 (5,754) 5,754 - Taxation 2 608 (608) - Net cash inflow from financial investment 3 12,996 27 13,023 Equity dividends paid 4 (9,504) 9,504 - ------------- ------------- ------------- Net cash inflow before financing 8,683 9,531 18,214 Financing 4 (9,006) (9,504) (18,510) ------------- ------------- ------------- Decrease in cash (323) 27 (296) ------------- ------------- ------------- Transfer of foreign exchange movements to reconciliation of cash and cash equivalents - (27) (27) ------------- ------------- ------------- Total (323) - (323) ======= ======= ======= Notes to the reconciliation 1. Bank and debenture interest paid are now shown under operating activities rather than servicing of finance. 2. Taxation recovered is now disclosed under operating activities. 3. Foreign exchange movements now appear at the foot of the Group Cash Flow Statement within the reconciliation of cash and cash equivalents. 4. Dividends paid are now disclosed under financing. - MORE- - 24 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 5. Other expenses Half year ended Half year ended Year ended 30 September 2005 30 September 2004 31 March 2005 (Unaudited) (Unaudited and restated) (Audited and restated) Revenue Capital Total Revenue Capital Total Revenue Capital Total Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Cost on - 759 759 - 598 598 - 822 822 acquisition of investments Other administrative expenses 320 - 320 293 - 293 459 - 459 ----------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- ---------- 320 759 1,079 293 598 891 459 822 1,281 ====== ===== ===== ===== ===== ===== ===== ===== ==== 6. Finance costs Half year ended Half year ended Year ended 30 September 2005 30 September 2004 31 March 2005 (Unaudited) (Unaudited and restated) (Audited and restated) Revenue Capital Total Revenue Capital Total Revenue Capital Total Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Bank loan and 607 607 1,214 443 443 886 1,018 1,018 2,036 overdraft interest Debenture 949 949 1,898 948 948 1,896 1,886 1,886 3,772 interest Increase/(decrease) in present value of finance lease payments - 3 3 - (91) (91) - - - ----------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- ---------- 1,556 1,559 3,115 1,391 1,300 2,691 2,904 2,904 5,808 ====== ===== ===== ===== ===== ==== ===== ===== ==== - MORE - - 25 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 7. Earnings per ordinary share The earnings per ordinary share figure is based on the net gain for the half year of Â£113,379,000 (half year ended 30 September 2004: Â£46,154,000; year ended 31 March 2005: Â£120,814,000) and on 344,375,372 (half year ended 30 September 2004: 352,828,854; year ended 31 March 2005: 350,376,971) ordinary shares, being the weighted average number of ordinary shares in issue during the period. The earnings per ordinary share figure detailed above can be further analysed between revenue and capital, as below. Half year Half year Year ended ended ended 30 September 30 September 31 March 2005 2004 2005 (Unaudited) (Unaudited (Audited & & restated) restated) Â£'000 Â£'000 Â£'000 Net revenue profit 9,160 7,604 9,998 Net capital profit 104,219 38,550 110,816 ------------ ------------ ------------ Net total profit 113,379 46,154 120,814 ======= ======= ======= Weighted average number of ordinary shares in issue during the period 344,375,372 352,828,854 350,376,971 pence pence pence Revenue earnings per ordinary share 2.66 2.15 2.85 Capital earnings per ordinary share 30.26 10.93 31.63 ------------ ------------ ------------ Total earnings per ordinary share 32.92 13.08 34.48 ======= ======= ======= 8. Changes in share capital During the period the Company made authorised market purchases for cancellation of 2,516,286 of its own issued ordinary shares of 25p. As at 30 September 2005 there were 343,850,000 ordinary shares in issue. 9. Comparative information The financial information contained in this interim statement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information for the six months ended 30 September 2004 and 30 September 2005 has not been audited. The figures and financial information for the year ended 31 March 2005 are an extract from the latest published accounts and do not constitute statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors, which was unqualified and did not contain a statement under either section 237(2) or 237(3) of the Companies Act 1985. Adjustments made in arriving at restated amounts have not been audited. - MORE - - 26 - TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 2005 Largest Quoted Investments as at 30 September 2005 Market Market Market Value Value Value Â£'000 Â£'000 Â£'000 Land Securities 85,043 Immobilia Colonial (Spain) 10,669 Wereldhave (Netherlands) 6,007 British Land 51,728 Grainger Trust 10,374 Pirelli Real Estates 5,889 (Italy) Hammerson 38,192 Vastned Retail 9,888 Brixton 5,854 (Netherlands) Rodamco Europe 31,850 Eurocommercial Properties 9,446 IVG Immobilien (Germany) 5,244 (Netherlands) (Netherlands) Metrovacesa (Spain) 28,176 Quintain Estates & 8,003 Urbis (Spain) 5,192 Developments Big Yellow Group 27,720 Capital & Regional 7,558 Rugby Estates 4,861 Properties Slough Estates 27,158 Beni Stabili (Italy) 7,094 London Merchant 4,746 Securities Castellum (Sweden) 26,990 Bail Investissement 6,951 Silic (France) 4,537 (France) Liberty International 24,875 Derwent Valley 6,922 PSP Swiss Property 4,188 (Switzerland) St Modwen Properties 22,797 Gecina (France) 6,675 Orchid Developments 3,151 Unibail (France) 22,228 Kungsleden (Sweden) 6,572 Citycon (Finland) 3,120 Fonciere des Regions 17,130 Immoeast Immobilien Anlagen 6,443 Risanamento (Italy) 3,028 (France) (Austria) Corio (Netherlands) 13,825 Helical Bar 6,367 Klepierre (France) 12,903 Cofinimmo (Belgium) 6,226 The above 40 largest quoted investments amount to Â£596,620,000 or 85% of total investments (convertibles and all classes of equities in any one company being treated as one investment). Principal Investment Properties as at 30 September 2005 Location Sector Tenure Size (sq ft) Value in excess of Â£10m The Colonnades, Bishops Bridge Road, Mixed Use Freehold 44,000 London W2 Thames Central, Hatfield Road, Slough Offices Freehold 63,850 Value in excess of Â£5m 6 Lloyd's Avenue, London EC3 Offices Freehold 34,410 Elizabeth House, Duke Street, Woking, Surrey Offices Freehold 54,150 Cambridge Science Park, Cambridge Offices Leasehold 38,500 Ferrier Street Industrial Estate, Ferrier Street, Industrial Freehold 35,800 Wandsworth, London SW18 Value below Â£5m Exchange House, Liphook Offices Freehold 9,641 Locke King House, Balfour Road, Weybridge Offices Freehold 5,250 - ENDS - For further information, please contact: Chris Turner Marcus Phayre-Mudge TR Property Investment Trust plc TR Property Investment Trust plc Telephone: 020 7360 1332 Telephone 020 7360 1331 This information is provided by RNS The company news service from the London Stock Exchange

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