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Minerva PLC (MNR)

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Monday 27 March, 2006

Minerva PLC

Interim Results

Minerva PLC
27 March 2006



27 March 2006

                     MINERVA PLC ANNOUNCES INTERIM RESULTS

Minerva plc, the FTSE 250 real estate company, today announces its preliminary
results for the six months ended 31 December 2005, which are prepared for the
first time under International Financial Reporting Standards.

Financial Highlights

   •Loss before tax and exceptional items of £2.1 million (2004: profit of
    £1.9 million).

   •Loss after tax and exceptional items of £6.6 million (2004: £8.5
    million).

   •Net asset value per share of 301.9 pence per share (June 2005: 314.9
    pence per share).

   •Adjusted net asset value per share of 331.1 pence per share (June 2005:
    347.1 pence per share).

   •Cash reserves of £188.3 million (June 2005: £144.4 million).

   •New special dividend policy based upon the realisation of development
    profits.

Operational Highlights

   •£275 million financing secured for speculative development of The Walbrook,
    EC4: This landmark development, comprising a 440,000 sq ft freehold office 
    building in the heart of the City of London, is scheduled to commence
    Summer 2006 with completion of the new building expected in the Summer of 
    2009.

   •Work on Park Place continues to progress well: Works in relation to the
    design, construction and leasing for this 900,000 sq ft shopping centre
    development in Croydon, continue to progress. This includes activities in
    relation to the compulsory purchase of land and other interests and, as
    expected, a public inquiry has been confirmed for May 2006 with a decision
    expected by the end of 2006.

   •Acquisition of the Odeon Cinema, High Street Kensington, for £24 million
    in partnership with Northacre plc: This property, currently let to Odeon and
    subject to a development break, offers an opportunity, subject to planning,
    for the comprehensive redevelopment of the site for a range of luxury
    residential apartments.

   •Conditional acquisition of the Thistle Hotel, Lancaster Gate for a
    consideration of £67.6 million, in partnership with Northacre plc: The site
    is to be acquired with vacant possession and has a current planning consent
    for circa 162,000 sq ft of prime residential accommodation.

   •£3.7 million investment in the £89 million property acquisition of
    Skypark, Glasgow, in return for 25% interest: This 550,000 sq ft multi-let
    office complex was acquired in joint venture with Kenmore, Paradigm and Bank
    of Scotland, and offers significant potential for future value enhancement
    through active asset management and refurbishment, over the next few years.

   •Disposals of Sampson House and Ludgate House, London SE1 for
    consideration totalling circa £229 million: This completed a disposal
    programme of investment properties totalling circa £634 million in 2005,
    releasing capital to fund the Group's development programme.


Future Focus

   •Continued commitment to drive value from our high quality development
    programme and new acquisitions.


Salmaan Hasan, Chief Executive of Minerva, said:

"This is an exciting period for the Group at a time when the property investment
market is very strong and the occupational market, especially in central London,
is improving. We are focused on driving value for our shareholders from existing
and new development opportunities which now encompass central London offices, a
prime shopping centre and premium residential."

Enquiries:

Minerva plc
Salmaan Hasan, Chief Executive (020) 7535 1000
Ivan Ezekiel, Chief Financial Officer
Brunswick Group LLP
James Bradley/Michaela Hopkins (020) 7404 5959



                           CHAIRMAN'S STATEMENT

The strategic changes that were announced in March of last year are now being
implemented. The disposal of some £634 million of investment property which has
reduced our gearing to one of the lowest levels in the quoted property sector,
the strengthening of Minerva's Board, the securing of vacant possession for The
Walbrook development and the completion of the Park Place joint venture with
Lend Lease for our planned shopping mall development in Croydon, have all
combined to create a solid platform from which to unlock future development
surpluses and invest in new projects.

We have now entered the development phase of the property cycle with Central
London showing strength both in terms of investment demand and tenant activity.
This is particularly prevalent in the City of London where expectations for
rental growth are at their highest levels for many years. It is therefore
significant that Minerva has a large development pipeline in the City of London
with planning consent for around 1.5 million sq ft of new high quality offices.

Before I expand on our activities I should like to turn to the financial results
for the six months ended 31 December 2005 which, for the first time, have been
prepared under International Financial Reporting Standards ("IFRS").

Interim results

As a consequence of the Group's decision to sacrifice short term investment
income in the pursuit of development surpluses, the Group incurred a loss before
tax and exceptional items for the six months ended 31 December 2005 of £2.1
million (2004: profit of £1.9 million).

We reported to you last year, as a post year end event, the sale of the Bankside
Estate, consisting of Sampson House and Ludgate House, for gross proceeds of
around £229 million. The Group incurred selling expenses, together with early
loan repayment charges under IFRS of circa £11.8 million, and this is reported
in our results as an exceptional non-recurring item. After taking account of
this and the deferred taxation credit principally arising from the disposal of
investment properties, the loss for the period was £6.6 million (2004: £8.5
million).

The Group is embarking upon a strategy focused upon the creation of shareholder
value through development, to be initiated by the commencement of construction
of The Walbrook in the Summer of this year. With this in mind the Board has
resolved that the most appropriate method of repatriating value to shareholders
should be in the form of special dividends when profits are realised from the
developments. Notwithstanding the Group's significant cash resources, as an
integral part of our new strategy to deliver profits through development, your
Board has resolved that no dividend will be paid until such profits begin to
flow. We believe that this new policy will ensure that the full financial
resources available to the Group will be allocated to the development programme
thereby driving returns for shareholders.

In relation to Allders I can confirm that we have received notification from The
Pension Regulator that based upon its investigations it will take no action
against Minerva or its Directors in relation to the Allders Pension Scheme or
the purchase by Minerva of the Allders Store in Croydon.

Development Projects

The Walbrook, London EC4
Last September we announced our intention to build The Walbrook, a modern
freehold office building totalling around 440,000 sq ft located in the heart of
the City of London, adjacent to Bank underground and Cannon Street main line and
underground Stations. In January we secured a £275 million financing package for
this development, which will enable construction to commence on a speculative
basis. The facility is to be provided by Deutsche Postbank AG and Nationwide
Building Society.

This is a milestone financing for Minerva which enables us to commit to this
development project at a time when the City Market is strengthening. The new
facility initially provides £75 million to refinance existing debt and provides
for an additional £140 million of construction funding with a further £60
million being available as the development is completed and let.

We intend to commence on site this Summer and in this regard we are concluding
our pre-construction activities which include negotiations with contractors.
Completion of the development is scheduled for the Summer of 2009.

The development team has refined the internal design of the building so as to
create a layout which will be attractive to a broad range of occupiers thus
enabling single or multiple-tenant occupation.

Park Place, Croydon, Surrey
Since the year end we have been working closely with our development partner
Lend Lease on what will be one of the UK's largest and most important covered
shopping malls. It is now quite clear that our decision to join forces with Lend
Lease has added a new and exciting dimension to this project.

The Croydon development team has been focusing its attentions on a wide range of
activities including compulsory purchase, construction and leasing. With regard
to the compulsory purchase of land and interests not currently owned by the
Group, the Inspector has now confirmed a formal hearing date at the end of May
2006 with a final decision expected by the end of the year.

Along with Lend Lease we have carried out a detailed analysis of our leasing
strategy and in this regard we have held discussions with a number of key
retailers including the anchor store.

The Minerva Building, London EC3
The Minerva Building, designed by British architects Grimshaw, will provide a
new landmark office tower and is widely considered to be of world class standard
and design, capable of being let to a number of tenants.

What has become clear as the international investment market evolves is that
this project is of global appeal for both investors and potential occupiers. It
is for this reason that the team at Minerva has embarked upon a course of action
intended to package this product in a manner which maximises the operational
cash flow from the building using occupation and management concepts widely
adopted elsewhere in the world, most notably the United States and the Far East.

In adopting this course we have engaged in active discussions with a range of
world renowned developers and tower operators with a view to forming a strategic
alliance to take this concept forward. In parallel it is our intention to seek
co-investment partners for this development and in this regard a series of
preliminary discussions have already taken place.

New investments

As part of our new strategy we recognise the need to complement our large scale
development programme with a broad range of new ventures that will create a
regular stream of profitability in projects that are smaller and come to
fruition more frequently. We are considering a number of new opportunities and
in recent months we have announced a commitment to three such projects in High
Street Kensington London W8, Lancaster Gate London W2 and Glasgow.

Turning firstly to our acquisition of the Odeon site in High Street Kensington.
This freehold property was acquired in joint venture with Northacre plc in
November 2005 for £24 million and is currently leased to Odeon Cinemas for a
term of five years subject to a development break clause in favour of Minerva.
We are currently in discussions with The London Borough of Kensington and
Chelsea for a comprehensive redevelopment to provide residential accommodation
incorporating luxury apartments. We anticipate obtaining planning consent during
the course of this year and propose commencing development immediately
thereafter. In this regard we have agreed an acquisition and construction
facility of £77.5 million.

Our second acquisition, which is subject to a conditional contract and is again
in joint venture with Northacre plc, is the purchase of 75-89 Lancaster Gate,
London, W2 for £67.6 million. This transaction was announced in February 2006
and the property is currently occupied by Thistle Hotels. Inter alia the
contract is conditional upon the freehold site being transferred to Minerva with
the benefit of vacant possession. The site has a current planning consent
totalling 162,000 sq ft of residential accommodation comprising 139 individual
units. We are currently reviewing a redesign of the existing consent and subject
to the fulfilment of the conditional contract we anticipate commencing the
development later this year. As with High Street Kensington we have agreed an
acquisition and construction facility of £153.6 million.

In December we entered into a joint venture with Kenmore, Paradigm and Bank of
Scotland for the £89 million acquisition of Skypark in Glasgow. This property,
which is multi-let, comprises around 550,000 sq ft of accommodation the majority
of which is office accommodation. Skypark is located adjacent to Glasgow's
central core close to the M8 ring road. Our initial investment in this
transaction was £3.7 million. We hold a 25 per cent interest in this project
which we believe has significant potential for value enhancement through a
sustained process of active estate management including lease reconstruction and
refurbishment.

The Future

Set against the backdrop of a strong property market and a relatively benign
economy the Group has taken significant steps towards unlocking the value from
its development assets whilst at the same time investing in new opportunities.
With the strengthening City office market and with there being a paucity of
opportunities to invest in new prime shopping centre developments we are well
placed to reap the rewards of our current market position. During the course of
this year we anticipate the commencement of The Walbrook which will mark the
beginning of our high quality development programme. We therefore believe we are
entering into a period of significant progress for the Group and for you our
shareholders.



Andrew Rosenfeld
Chairman






CONSOLIDATED INCOME STATEMENT

For the six months ended 31 December 2005

                                     (Unaudited)    (Unaudited)    (Unaudited)
                                   Six months to  Six months to        Year to
                                     31 December    31 December        30 June
                                            2005           2004           2005
                              Note         £'000          £'000          £'000
                                         ---------      ---------       --------

Continuing operations
Revenue                                   11,526         33,070         61,389
Property outgoings                        (3,183)        (4,782)        (9,228)
                                         ---------      ---------       --------
Net rental income                          8,343         28,288         52,161
Administrative expenses                   (4,605)       (12,253)       (16,847)
Other income                                  57            117            264
                                         ---------      ---------       --------
                                           3,795         16,152         35,578
Deficit on revaluation of
investment properties                          -              -         (6,258)
Loss on sale of investment
properties                      3         (2,411)             -        (12,490)
                                         ---------      ---------       --------
Operating profit                           1,384         16,152         16,830
Interest payable and similar
charges                                  (10,342)       (24,680)       (46,734)
Interest receivable                        4,429          2,389          4,750
Charges relating to early
loan repayments                 3        (11,820)             -        (17,180)
Share of post tax profit of
joint venture                   4             64              -              -
                                         ---------      ---------       --------
Loss before taxation                     (16,285)        (6,139)       (42,334)
Taxation credit                 5          9,659          2,103         26,361
                                         ---------      ---------       --------
Loss after taxation from
continuing operations                     (6,626)        (4,036)       (15,973)
Discontinued operation
Loss from discontinued                     
operation                      14              -         (4,429)        (4,429)
                                         ---------      ---------       --------
Loss for the period                       (6,626)        (8,465)       (20,402)
                                         ---------      ---------       --------

Attributable to:
Equity shareholders                       (6,622)        (8,465)       (20,402)
Minority interest                             (4)             -              -
                                         ---------      ---------       --------
Loss for the period                       (6,626)        (8,465)       (20,402)
                                         ---------      ---------       --------

Loss per share                  6           (4.1)p         (5.3)p        (12.7)p
                                         ---------      ---------       --------




CONSOLIDATED BALANCE SHEET

As at 31 December 2005

                                     (Unaudited)    (Unaudited)    (Unaudited)
                                           As at          As at          As at
                                     31 December    31 December        30 June
                                            2005           2004           2005
                              Note         £'000          £'000          £'000
                                         ---------      ---------       --------

Assets
Non-current assets
Investment properties           7        608,867      1,215,829        804,099
Plant and equipment                          528            680            461
Investments                                  276          5,082          5,082
Investment in joint venture     4          3,683              -              -
Financial instruments          11            918              -              -
                                         ---------      ---------       --------
                                         614,272      1,221,591        809,642
                                         ---------      ---------       --------
Current assets
Trade and other receivables     8         10,253         13,998        162,202
Cash and cash equivalents                188,268         85,234        144,439
                                         ---------      ---------       --------
                                         198,521         99,232        306,641
                                         ---------      ---------       --------
Total assets                             812,793      1,320,823      1,116,283
                                         ---------      ---------       --------

Liabilities
Current liabilities
Trade and other payables        9        (17,364)       (31,838)       (42,256)
Borrowings                     10        (14,657)        (8,423)      (130,430)
                                         ---------      ---------       --------
                                         (32,021)       (40,261)      (172,686)
                                         ---------      ---------       --------
Non-current liabilities
Borrowings                     10       (246,881)      (684,039)      (384,993)
Financial instruments          11         (9,291)             -              -
Deferred tax liabilities        5        (37,672)       (76,101)       (51,843)
                                         ---------      ---------       --------
                                        (293,844)      (760,140)      (436,836)
                                         ---------      ---------       --------
Total liabilities                       (325,865)      (800,401)      (609,522)
                                         ---------      ---------       --------
Net assets                               486,928        520,422        506,761
                                         ---------      ---------       --------

Equity
Called up share capital                   40,276         40,230         40,230
Share premium account                    198,321        198,098        198,098
Other reserves                            41,795         41,795         41,795
Retained earnings                        205,990        240,299        226,638
                                         ---------      ---------       --------
Total shareholders' equity               486,382        520,422        506,761
Minority interest                            546              -              -
                                         ---------      ---------       --------
Total equity                             486,928        520,422        506,761
                                         ---------      ---------       --------

Net asset value per share      12          301.9p         323.4p         314.9p
                                         ---------      ---------       --------






CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 31 December 2005

                                      (Unaudited)    (Unaudited)    (Unaudited)
                                   Six months to  Six months to        Year to
                                     31 December    31 December        30 June
                                            2005           2004           2005                                
                              Note         £'000          £'000          £'000
                                         ---------      ---------       --------

Opening total shareholders'
equity as restated under IFRS            506,761        531,889        531,889
Impact of adopting IAS 39       2        (11,152)             -              -
                                         ---------      ---------       --------
                                         495,609        531,889        531,889
Movement in fair value of
financial instruments (net of
tax)                                         627              -              -
New share capital issued                     269            350            350
Share-based payment                           59             72            102
Share of joint venture 
movement in fair value of 
financial instruments 
(net of tax)                                 (81)             -              -
Loss for the period
attributable                             
to equity shareholders                    (6,622)        (8,465)       (20,402)
Dividends                                 (3,479)        (3,424)        (5,178)
                                         ---------      ---------       --------
Closing total shareholders'
equity                                   486,382        520,422        506,761
                                         ---------      ---------       --------





CONSOLIDATED CASH FLOW STATEMENT

For the six months ended 31 December 2005

                                     (Unaudited)    (Unaudited)    (Unaudited)
                                   Six months to  Six months to        Year to
                                     31 December    31 December        30 June
                                            2005           2004           2005
                              Note         £'000          £'000          £'000
                                         ---------      ---------       --------

Cash (absorbed by)/generated
from operations                15         (4,828)        21,292         40,261
Interest received                          3,563          2,400          4,729
Interest paid                            (15,133)       (23,419)       (45,596)
UK corporation tax                             -              -              -
                                         ---------      ---------       --------
Cash flows from operating
activities                               (16,398)           273           (606)
                                         ---------      ---------       --------

Investing activities
Additions to investment
properties                               (31,509)        (6,457)       (12,061)
Additions to plant and                      
equipment                                   (228)          (203)          (286)
Additions to investments                    (119)             -              -
Receipts from sale of
investment properties                    372,889            (29)       248,157                              
Receipts from sale of plant
and equipment                                 20             63             84                                         
Receipts from sale of                         
investments                                   20              -              -
Investment in joint venture     4         (3,700)             -              -
Loan to joint venture          14              -         (4,500)        (2,500)
                                         ---------      ---------       --------
Cash flows from investing
activities                               337,373        (11,126)       233,394
                                         ---------      ---------       --------

Financing activities
Issue of share capital                       269            350            350
Equity dividends paid                     (3,174)        (3,290)        (5,174)
New long-term loans                       20,109              -              -
Issue costs of long-term                    
loans                                       (292)           (88)           (88)
Equity contribution from
minority interest                            550              -              -                                    
Repayment of long-term loans            (275,789)        (4,783)      (177,592)
Cost of early long-term loan
repayments                               (18,819)             -         (9,743)
                                         ---------      ---------       --------
Cash flows from financing
activities                              (277,146)        (7,811)      (192,247)
                                         ---------      ---------       --------

Net increase/(decrease) in
cash and cash equivalents                 43,829        (18,664)        40,541
Cash and cash equivalents at
beginning of period                      144,439        103,898        103,898
                                         ---------      ---------       --------
Cash and cash equivalents at
end of period                            188,268         85,234        144,439
                                         ---------      ---------       --------



NOTES TO THE ACCOUNTS


1. Basis of preparation

The financial information included in the Interim Report comprises the
consolidated income statement and balance sheet, consolidated statement of
changes in equity, consolidated cash flow statement and summary notes.


The report has been prepared in accordance with the historical cost convention,
as modified by the revaluation of investment properties and by the valuation of
derivative financial instruments, and in accordance with IFRS and International
Financial Reporting Interpretations Committee interpretations issued and
effective at the time of preparing this report. Based on the adopted IFRS, the
directors have applied the accounting policies as set out in the Group's IFRS
transition document, reported on 23 March 2006, which they expect to apply when
the first annual IFRS financial statements are prepared for the year ending 30
June 2006.


As a result of the continuous development and adoption of new standards and
interpretations by the European Union, it may be possible that the basis on
which the financial information is presented may change before the Group's first
IFRS financial statements in respect of the year ending 30 June 2006.


The comparative information shown for the year ended 30 June 2005 does not
constitute statutory accounts within the meaning of Section 240 of the Companies
Act 1985 and is based on the Group's UK GAAP statutory financial statements for
the year then ended, adjusted to restate it in accordance with IFRS. Statutory
accounts for the year ended 30 June 2005, prepared under UK GAAP, have been
delivered to the Registrar of Companies. The report of the auditors on these
financial statements was unqualified and did not contain a statement under
either Section 237(2) or Section 237(4) of the Companies Act 1985.
Reconciliations are set out in note 16 to facilitate a comparison of these
interim results with those published at the prior year interim and full year to
30 June 2005.


The financial information for the six months to 31 December 2005 has neither
been audited nor reviewed by the Group's auditors.



2. Accounting policies

The accounting policies as set out in Appendix 3 of the Group's IFRS transition
document, with the exception of IAS 39, 'Financial instruments: Recognition and
measurement', have been consistently applied to all periods presented in the
interim results.


The Group has taken advantage of the exemption in IFRS 1, 'First time adoption
of International Financial Reporting Standards', which allows the Group to
postpone the adoption of IAS 39 until its accounting period commencing 1 July
2005.



3. Financial information
                                   Underlying      Exceptional           Total
                                      results            items
                                        £'000            £'000           £'000
                                        -------          -------         -------

Revenue                                11,526                -          11,526
Property outgoings                     (3,183)               -          (3,183)
                                      ---------        ---------        --------
Net rental income                       8,343                -           8,343
Administrative expenses                (4,605)               -          (4,605)
Other income                               57                -              57
                                      ---------        ---------        --------
                                        3,795                -           3,795
Loss on sale of investment
properties                                  -           (2,411)         (2,411)
                                      ---------        ---------        --------
Operating profit/(loss)                 3,795           (2,411)          1,384
Interest payable and similar
charges                               (10,342)               -         (10,342)
Interest receivable                     4,429                -           4,429
Charges relating to early
loan repayments                             -          (11,820)        (11,820)
Share of post tax profit of
joint venture                              64                -              64
                                      ---------        ---------        --------
Loss before taxation for the
period ended 31 December 2005          (2,054)         (14,231)        (16,285)
                                      ---------        ---------        --------
                                      ---------        ---------        --------
Profit/(loss) before taxation
for the period ended 31
December 2004                           1,861           (8,000)         (6,139)
                                      ---------        ---------        --------


The exceptional items referred to above for the current period relate to the
sale of Sampson House and Ludgate House, London SE1 ("Bankside Estate") in
August 2005.



4. Investment in joint venture

In December 2005 the Group entered into a joint venture with Kenmore, Paradigm
and Bank of Scotland for the £89 million property acquisition of Skypark in
Glasgow. The Group has a 25% interest in the joint venture and has made an
initial investment of £3.7 million.



5. Taxation
                          (Unaudited)         (Unaudited)         (Unaudited)
                        Six months to       Six months to             Year to
                          31 December         31 December             30 June 
                                 2005                2004                2005
                                £'000               £'000               £'000
                              ---------           ---------            --------
Corporation tax                     -                   -                   -
Deferred tax credit            (9,659)             (2,103)            (26,361)
                              ---------           ---------            --------
                               (9,659)             (2,103)            (26,361)
                              ---------           ---------            --------


Set out below is a summary of the movement in the provision for deferred
taxation.

                                     (Unaudited)    (Unaudited)    (Unaudited)
                                           As at          As at          As at
                                     31 December    31 December        30 June 
                                            2005           2004           2005
                                           £'000          £'000          £'000
                                         ---------      ---------       --------
At beginning of period                    51,843         78,204         78,204
Impact of adopting IAS 39                 (4,780)             -              -
Credit for the period recognised in
income statement                          (9,659)        (2,103)       (26,361)
Tax recognised in equity                     268              -              -
                                         ---------      ---------       --------
At end of period                          37,672         76,101         51,843
                                         ---------      ---------       --------


The credit principally reflects the selling expenses incurred and balancing
allowances arising on property disposals together with tax losses in the period.



6. Loss per share

Loss per share is calculated on a weighted average of 160,995,177 ordinary
shares of 25 pence each in issue throughout the period (year to 30 June 2005:
160,846,284 ordinary shares; six months to 31 December 2004: 160,775,107
ordinary shares), and is based on losses attributable to ordinary shareholders
of £6,622,000 (year to 30 June 2005: £20,402,000; six months to 31 December
2004: £8,465,000).



7. Investment properties

Investment properties owned at 30 June 2005 are included in the balance sheet at
31 December 2005 at the independent valuation at 30 June 2005, as adjusted for
lease incentives, plus costs incurred on the properties since that date, less
disposals at valuation.





8. Trade and other receivables
                                     (Unaudited)    (Unaudited)    (Unaudited)
                                           As at          As at          As at
                                     31 December    31 December        30 June 
                                            2005           2004           2005
                                           £'000          £'000          £'000
                                         ---------      ---------       --------

Other debtors                              6,393          4,935          3,480
Prepayments and accrued income             3,860          7,063          4,972
Loan due from joint venture                    -          2,000              -
Amounts due from property disposals            -              -        153,750
                                         ---------      ---------       --------
                                          10,253         13,998        162,202
                                         ---------      ---------       --------



9. Trade and other payables
                                     (Unaudited)    (Unaudited)    (Unaudited)
                                           As at          As at          As at
                                     31 December    31 December        30 June 
                                            2005           2004           2005
                                           £'000          £'000          £'000
                                         ---------      ---------       --------

Taxation and social security                 295          1,442          1,025
Other creditors                            2,944          4,497          2,318
Accruals and deferred income              13,815         25,764         38,908
Dividend payable                             310            135              5
                                         ---------      ---------       --------                                 
                                          17,364         31,838         42,256
                                         ---------      ---------       --------



10. Borrowings
                                         (Unaudited)   (Unaudited)   (Unaudited)
                                               As at         As at         As at
                                         31 December   31 December       30 June
                                                2005          2004          2005
                                               £'000         £'000         £'000
                                             ---------    ---------     --------

Current liabilities
Bank and building society                 
borrowings                                    14,655         8,421       130,428
Finance lease obligations                          2             2             2
                                            ---------     ---------     --------
                                              14,657         8,423       130,430
                                            ---------     ---------     --------

Non-current liabilities
Bank and building society borrowings due:
     Between one and two years                48,091        17,551        86,012
     Between two and five years              151,382       198,303       126,428
     Over five years                          46,572       462,725       172,387
                                             ---------    ---------     --------
                                             246,045       678,579       384,827
Unamortised loan issue costs                  (1,299)       (3,598)       (1,970)
                                             ---------    ---------     --------
                                             244,746       674,981       382,857
Finance lease obligations                      2,135         9,058         2,136
                                             ---------    ---------     --------
                                             246,881       684,039       384,993
                                             ---------    ---------     --------




11. Financial instruments

The fair values of the Group's outstanding interest rate swaps represents the
net present value of the difference between the contracted rate and the mid
market rate prevailing at 31 December 2005. Interest rate options have been
valued at the mid market price on 31 December 2005.




12. Net asset value per share

                                     (Unaudited)    (Unaudited)    (Unaudited)
                                           As at          As at          As at
                                     31 December    31 December        30 June
                                            2005           2004           2005
                                           Pence          Pence          Pence
                                         ---------      ---------       --------

Net asset value per share                  301.9          323.4          314.9
Adjustment for the fair value of
financial instrument liabilities             5.8              -              -
Adjustment for deferred tax                 23.4           47.3           32.2
                                         ---------      ---------       --------
Adjusted net asset value per share         331.1          370.7          347.1
                                         ---------      ---------       --------


Net asset value per share is calculated on 161,102,150 ordinary shares of 25
pence each in issue at 31 December 2005 (30 June 2005: 160,918,640; 31 December
2004: 160,918,640) and is based on net assets attributable to equity
shareholders of £486,382,000 (30 June 2005: £506,761,000; 31 December 2004;
£520,422,000).


Adjusted net asset value per share writes back the fair value of financial
instrument liabilities and deferred tax.



13. Dividends

No interim dividend is proposed for the period (2004: 1.09 pence per ordinary
share).



14. Discontinued operation

The discontinued operation relates to the Group's share in Scarlett Retail Group
Limited ("Scarlett Retail"), which was placed into administration in January
2005.



15. Notes to the consolidated cash flow statement
                                     (Unaudited)    (Unaudited)    (Unaudited)
                                   Six months to  Six months to        Year to
                                     31 December    31 December        30 June
                                            2005           2004           2005
                                           £'000          £'000          £'000
                                          ---------      ---------      --------

Operating profit                           1,384         16,152         16,830
Depreciation                                 164            291            576
Irrecoverable part of loan to joint
venture                                        -          8,000          8,000
Revaluation of investment
properties                                     -              -          6,258
Loss on sale of investment
properties                                 2,411              -         11,146
Profit on sale of plant and
equipment                                    (20)           (24)           (39)
Amortisation of lease incentives
and letting fees                             (31)          (595)           678
Share-based payment                           59             72            102
Movement in trade and other 
receivables                               (1,824)         1,324          4,307
Movement in trade and other 
payables                                  (6,971)        (3,928)        (7,597)
                                         ---------      ---------       --------
                                          (4,828)        21,292         40,261
                                         ---------      ---------       --------



16. Reconciliation between IFRS and previous UK GAAP


a) Loss for the period
                                     (Unaudited)    (Unaudited)    (Unaudited)
                                   Six months to  Six months to        Year to
                                     31 December    31 December        30 June
                                            2005           2004           2005
                                           £'000          £'000          £'000
                                         ---------      ---------       --------

Loss for the period under previous
UK GAAP                                  (25,916)       (21,373)       (44,394)
Movement in deferred tax                  13,572          2,885         21,557
Revaluation movement on investment
properties                                     -              -         (6,936)
Charges relating to early loan
repayments                                 1,824              -              -
Amortisation of letting fees                 (83)           (41)             -
Amortisation of lease incentives             114            636            (27)
Share-based payment                          (59)           (72)          (102)
Adjustment to investment in joint
venture                                        -          9,500          9,500
Movement in fair value of financial
instruments recognised in equity           4,017              -              -
Movement in fair value of financial
instruments                                  (95)             -              -
                                         ---------      ---------       --------
Loss for the period under IFRS            (6,626)        (8,465)       (20,402)
                                         ---------      ---------       --------




b) Total shareholders' equity
                                     (Unaudited)    (Unaudited)    (Unaudited)
                                           As at          As at          As at
                                     31 December    31 December        30 June
                                            2005           2004           2005
                                           £'000          £'000          £'000
                                         ---------      ---------       --------

Total shareholders' equity under
previous UK GAAP                         528,196        587,276        553,843
Deferred tax                             (32,447)       (69,203)       (50,531)
Fair value of financial instruments       (9,291)             -              -
Amortisation of letting fees                 (83)           (41)             -
Exclusion of provision for proposed
dividend                                       -          1,754          3,476
Amortisation of lease incentives              88            636            (27)
Share of joint venture fair value
of financial instruments                     (81)             -              -                                          
                                         ---------      ---------       --------
Total shareholders' equity under
IFRS                                     486,382        520,422        506,761
                                         ---------      ---------       --------

The adjustments referred to above are explained in detail in the Group's IFRS
transition document reported on 23 March 2006.



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