Final Results

RNS Number : 3127H

London & Stamford Property PLC

26 May 2011

 



26 May 2011

LONDON & STAMFORD PROPERTY PLC

("London & Stamford", "LSP" or the "Group")

RESULTS FOR THE YEAR ENDED 31 MARCH 2011

London & Stamford Property Plc (LSE: LSP.L) today announces full year results for the year ended 31 March 2011.

Financial highlights

	Year to 31 March 2011		Year to 31 March 2010
Net income	£41.8m		£16.1m
Revaluation surplus (including share of associates)	£51.0m		£101.9m
Profit for the year	£43.3m		£106.1m
Investment properties	£748.3m		£357.7m
Share of net assets of associates	£115.3m		£89.3m
Cash deposits	£156.8m		£276.6m
Bank debt	£383.0m		£121.6m
Net assets	£668.7m		£600.6m
NAV per share	122.5p		120.1p
EPRA NAV per share	122.4p		120.7p
Earnings per share	8.3p		24.8p
EPRA earnings per share	3.0p		(0.6p)
Dividend per share	6.3p		4.4p
Number of shares in issue	546m		500m

·      160% increase in net income as a result of three portfolio acquisitions in the year

·      £51.0 million gain in asset values

·      11.3% increase in NAV, despite some 30% of NAV held in cash in the year

·      £1.5 billion assets under management

·      Acquisition of 58 apartments at Bridges Wharf, Battersea, in June 2010 for £27.9 million

·      Acquisition of three portfolios of prime distribution warehouses for £413.5 million

·      Post year end acquisition of One Carter Lane in the City of London for £75 million

·      Disposal of Racecourse Retail Park, Aintree (return on equity of 127%)

·      Post year end disposal of 50% of Lojix and AEW distribution portfolios into Green Park Joint Venture, adding £41.5 million to cash deposits

·      New five year £133 million debt facility with MetLife

·      Significant cash balances and when taken with committed but unspent funds from Green Park and assuming 65% gearing, total fire power is c. £1 billion

·      Successful move to the Main Market of the London Stock Exchange, conversion to UK-REIT regime and management internalised

·      Incremental benefit to Group of internalisation in H2 of £5.5 million, compared with H1

·      Admitted to FTSE 250 and EPRA Index

·      Final dividend of 3.3p per share, bringing the total dividend for the year to 31 March 2011 to 6.3p per share, a 43% increase on 2010

Raymond Mould, The Executive Chairman of London & Stamford Property Plc, said:

"I am very pleased to report on our £440 million investment programme during the year, which was one of the most active in the UK quoted Real Estate sector.

We have continued to invest equity well and to add shareholder value through the implementation of asset management initiatives and to realise a gain on the disposal of the Racecourse Retail Park at Aintree for a return on our equity of 127%. 

The dividend for the year of 6.3p is a 43% increase on the dividend paid in 2010.

During the year we have also undertaken significant organisational change; electing for UK REIT status, internalising the management of the company and moving into the Official List to trade on the Main Market of the London Stock Exchange.  The Company is now listed on the FTSE 250 and the EPRA Index.

Our acquisition after the year end of a 133,000 sq ft office building at One Carter Lane demonstrates our appetite for further investment opportunities in the City of London and we see the potential for outperformance in the Central London residential market, the distribution sector and in prime retail investments as exciting opportunities for the further investment of our c.£1 billion of firepower."

For further information contact:

London & Stamford Property Plc Raymond Mould Patrick Vaughan Martin McGann	Tel: [phone]
Kreab Gavin Anderson Richard Constant James Benjamin Anthony Hughes	Tel: [phone]

Notes to editors:

London & Stamford Property PLC was set up to exploit opportunities that it anticipated in the UK property cycle and is a group UK-REIT. The Company has a highly experienced management team and invests in commercial property, including office, retail and distribution real estate assets, principally in the UK.

The Company is traded on the London Stock Exchange's Main Market (LSP.L) and is authorised by the FSA to carry out certain regulated activities.

Further information on the Company is available from the Company's website: www.londonandstamford.com  

London & Stamford

Property Limited

Report & Accounts 2011

Chairman's statement

I am delighted to present our annual report for the year ended 31 March 2011.

Overview

During the year we continued to deliver on our objectives of investing equity well and adding shareholder value through the implementation of asset management initiatives and realising gains on the disposal of assets where we consider it appropriate.  This was all achieved whilst having undertaken significant organisational change.

Investments

Following the success of our investment at Highbury, we have acquired a portfolio of 58 apartments at Bridges Wharf, Battersea in London for £27.9 million. We have expanded our distribution involvement considerably by the purchase of three portfolios of prime logistical warehouses for £413.5 million. We have completed the disposal of the Racecourse Retail Park at Aintree for £101.5 million, representing a total return on our equity of 127% over 15 months of ownership. An analysis of our asset management initiatives is included in the Operating and Financial Review.

Since the year end, we have exchanged contracts to acquire a very well positioned office building at Carter Lane in the City of London for £75 million, reflecting an attractive net initial yield of 7.3% which currently provides a short term income benefit and represents an excellent refurbishment opportunity if the tenant decides to exercise a break option in March 2013.

Optimised Corporate Structure

On 1 October 2010, we successfully elected for UK REIT status, internalised the management of the Group and moved onto the premium listing segment of the Official List to trade on the Main Market of the London Stock Exchange. Since then, the Company has been promoted to the FTSE 250 and is listed on the EPRA Index.  Management remains material shareholders with c.9% of the issued share capital of the Company, which fully aligns their interest with the shareholders.

Results

The Group generated a profit for the year of £43.3 million, incorporating an underlying profit, as described in the Operating and Financial Review, of £20.1 million (2010 - £7.7 million loss). This is a strong improvement to the recurring profitability of the Group, particularly during the second half of the year, driven by creating sustainable and growing rental income.

Net assets at 31 March 2011 were £668.7 million (2010 - £600.6 million), equivalent to 122.5p per share (2010 - 120.1p per share), achieved while there has also been a 9.2% increase in the number of shares in issue.

The Board has proposed a final dividend of 3.3p per share to be paid on 7 July 2011, the cost of which is fully covered by underlying profit in the six months to 31 March 2011 which, when taken with the interim dividend of 3p per share paid on 20 December 2010, comprises a total dividend in respect of the year of 6.3p per share, and increase of 43% on the 2010 dividend.

Outlook

Our own strong cash resources and the added scale provided by our joint venture partner produces total investment firepower of c.£1 billion, which puts us in an excellent position to take advantage of opportunities in the future.

With the prospect of increasing interest rates and inflation and continuing concerns around Eurozone Sovereign debt issues, we are cautious and still have concerns over the fragile nature of the occupational market. Therefore, we continue to be careful in our investment strategy and will maintain our discipline in seeking well priced reliable income streams from well located assets.

Although we are seeing more opportunities, many of which are bank led, they are, in a number of cases, mispriced by our analysis and may be better priced in the near future. We regard not being fully invested as an opportunity at this time.

Our acquisition of Carter Lane demonstrates that opportunities for outperformance do exist in the Central London office market, where a constrained development pipeline and falling vacancies support potential for real rental growth. Similarly, we see opportunities in the Central London residential market for continuing rental growth as first time buyers are kept out of the investment market by the need for higher mortgage deposits than was historically the case. We intend to increase our exposure to rented residential accommodation in Central London aimed at that market of potential occupiers.

We continue to focus on the distribution sector where the lack of supply is creating the opportunity for lease extensions and rental growth in prime locations in the south-east and in the 'Golden Triangle' between the M6/M1 and M54 motorways, where our existing investments are located.

We are very happy with our investment in Meadowhall which exemplifies the retailing trend away from the high street and secondary locations towards super regional and internet shopping. We will continue to seek retail investment opportunities where we see value and we shall fully support our co-owner, The British Land Company PLC, in developing surplus land around Meadowhall.

I would like to thank everyone at London & Stamford and our business partners whose hard work has helped our business grow over the past twelve months.

Raymond Mould

Executive Chairman

26 May 2011

Operating and Financial Review

Overview of the year

London & Stamford has undergone substantial change during the year ended 31 March 2011. The Company was admitted to the premium listing segment of the Official List and to trading on the Main Market of the London Stock Exchange on 1 October 2010. On the same date, it acquired the business of LSI Management LLP, the property advisor, ('Internalisation') and elected for UK Group REIT status.

In addition, on 20 December 2010, the Company became a member of the UK FTSE 250 and was admitted to the EPRA Index.

The Company has continued to focus on delivering shareholder value through and whilst delivering these structural changes.

Net Asset Value per share has increased from 120.1p to 122.5p, but on an adjusted basis, allowing for accounting adjustments for the Internalisation and REIT conversion, there has been a 5% increase from 120.1p to 126p. There has also been a significant increase in net rental income this year. In particular, there was a 40% increase in net rental income in the second half of the year reflecting a full six months income from the Radial portfolio (acquired in May 2010) and the income from the Lojix and AEW portfolios (acquired in November 2010).

The following provides an analysis of the underlying profit of the Group which is divided into the two six-month periods. The analysis identifies the impact of exceptional accounting adjustments arising out of Internalisation (£5.6 million) and the write off of goodwill and costs of acquisition (£11.5 million). Also, the analysis identifies the material improvement in underlying profitability in the second half of the year as a result of increased overall investment.

	Six months to 1 October 2010 £000	Six months to 31 March 2011  £000	Year ended 31 March 2011 £000	Year ended 31 March 2010 £000
Net rental income	15,037	21,019	36,056	16,140
Property advisory fee income	-	5,591	5,591	-
Corporate overheads	(5,267)	(5,432)	(10,699)	(11,695)
Share of profit of associates	1,286	(278)	1,008	(434)
	11,056	20,900	31,956	4,011
Finance income	651	514	1,165	1,465
Finance costs	(9,086)	(10,874)	(19,960)	(8,772)
Change in fair value of derivatives	(3,530)	10,453	6,923	(4,451)
Underlying profit	(909)	20,993	20,084	(7,747)
Profit on revaluation of investment properties	13,657	16,423	30,080	72,099
Profit on revaluation of Meadowhall	7,245	13,708	20,953	29,846
Profit on sale of investment and trading properties	2,947	(157)	2,790	10,634
Profit before exceptional items and taxation	22,940	50,967	73,907	104,832
Accounting impact of internalisation (see note 16(b) to the financial statements)	3,144	(8,749)	(5,605)	-
Goodwill and costs of other acquisitions	(2,886)	(8,642)	(11,528)	-
Taxation	(6,621)	(5,686)	(12,307)	1,234
Minority interest	(267)	(888)	(1,155)	-
Profit for the year	16,310	27,002	43,312	106,066

The tax charge in the year is non-recurring and is largely in respect of the London & Stamford REIT entry charge of £9.7 million and the REIT charge in respect of the Lojix and AEW acquisitions of £3.4 million.

The Portfolio

The value of the total assets under management at 31 March 2011 is now in excess of £1.5 billion which comprises the following:

	£000
London & Stamford investment properties	748,275
London & Stamford trading stock	5,760
London & Stamford share of Meadowhall	239,425
	993,460
Green Park share of Meadowhall	523,075
	1,516,535

The focus of the portfolio at 31 March 2011 is:

	Value of assets under management £000	London & Stamford share of the assets
Prime distribution	450,441	96.6%
Super regional shopping centre	762,500	31.4%
City of London offices (excluding Carter Lane)	109,000	100%
Central London residential	88,817	100%
Business parks	92,512	100%
Development portfolio	13,265	100%
	1,516,535

Since 31 March 2011 London & Stamford's share of £207.9 million of the prime distribution assets has reduced to 50% through the completion of the joint venture arrangement with Green Park announced last year.  City of London office assets have increased by £75 million in respect of One Carter Lane.

We continue to focus on asset management initiatives within the portfolio.

	Average lease length  (Years)	Occupancy rate
Distribution	9.8	97
Retail	11.1	97
London Offices	14.3	100
Residential	0.7	94
Business Parks	13.9	100
Overall Portfolio	10.5	97

Retail portfolio

Aintree

In September 2010 we sold the Racecourse Retail Park at Aintree to the Crown Estate for a consideration of £101.5 million, generating a return on our equity invested during the period of our ownership of 127%.

The return was a function of strong yield compression and significant asset management activity including the construction of a new stand alone restaurant and new lettings to tenants including Best Buy, the American electronics retailer.

Meadowhall

The Meadowhall shopping centre continues to outperform the general retail market, which is under pressure as the impact of fiscal tightening becomes more apparent. Two thirds of retailers surveyed for the British Retail Consortium's Retail Prospects Report 2011 felt the outlook for 2011 was bleak. Nevertheless, the demand from retailers for space at Meadowhall has been and remains strong.

We have completed 55 new leases and two lease renewals in the year. A number of additional deals are currently in solicitors' hands, including two at rents in excess of ERV.

House of Fraser successfully completed a major refurbishment of their anchor store in October 2010.  The new store has significantly enhanced their performance in the centre and has acted as a catalyst for new asset management initiatives in the adjoining malls.

The refurbishment works for the Oasis Food Court have now commenced and are due for completion in late October 2011. The refurbishment will create a materially enhanced catering environment in the Centre and also generate a very positive return on cost.

City of London offices

One Fleet Place in London continues to perform very well. The building is fully occupied and has shown good capital growth in the year. The low rent of £36 per sq ft leads us to believe there is further growth potential. The performance to date of One Fleet Place and our confidence that there are opportunities for further rental growth in the City of London, led us to exchange contracts for the acquisition of a c.133,000 sq ft building at One Carter Lane in the City in April 2011 for £75 million. Both sites are very well placed to benefit from Crossrail from 2018.

Carter Lane produces a high net initial yield and represents an excellent refurbishment opportunity if the tenant, Goldman Sachs International, decides to exercise its break clause which is possible in March 2013.

Distribution

Acquisitions during the year have focused on the distribution sector, which we consider offers premium returns with low volatility when located in the best sites in the Golden Triangle, in and around Heathrow and on the M25/M1 junctions.

Following the acquisitions of the Radial, Lojix and AEW portfolios in the year, the distribution portfolio now comprises 26 units, totalling 5,200,276 sq ft.

The debt refinancing of the Lojix and AEW portfolios acquired in November 2010 was completed with Metropolitan Life Insurance Company ('MetLife') on 23 February 2011 and since the year end 50% of the combined portfolios has been transferred into a joint venture with Green Park.

We have made excellent progress in extending the unexpired lease terms on the distribution portfolio, from 6.7 years on acquisition to 8.7 years currently.

Our team have met with all tenants and a comprehensive programme of lease extensions and removal of break options is ongoing. We have completed three lease renewals and one new letting on the Radial portfolio since acquisition.  We aim to do more.

Residential

Following the successful acquisition of 146 apartments in the old North Stand at Highbury in 2009, we acquired a further portfolio of 58 apartments at Battersea Reach in June 2010.

There has been significant asset management activity at Highbury during the year. Second lettings have been concluded on the majority of flats reflecting rental levels on average between 5% and 10% higher than the original lettings. The flats are held for investment, but we have completed five disposals in the year, the result of offers in excess of book value.

45 of the apartments at Battersea have been classified as investment assets during the year and 40 are now let. The few apartments still held for sale continue to be accounted for as trading stock.

Development portfolio

We continue to seek opportunities to add and extract value from the development portfolio acquired on IPO in late 2007. In October 2010, we completed the sale of half the site at Copse Road, Yeovil for c.£1 million. 2.5 acres remain for future development.

Income Statement

Profit for the year ended 31 March 2011 was £43.3 million compared to £106.1 million for the previous year to 31 March 2010.  Direct comparisons are complicated by the accounting implications of the Internalisation during the year and the high level of new investment, as set out in the analysis of underlying profit in the Operating and Financial Review.

Net income

Gross rental income has increased by £21.5 million (125%) over the year due to the net effect of the increased rents from the acquisitions of the three distribution portfolios in the year and the Battersea apartments, less the rent lost from the disposal of the Racecourse Retail Park at Aintree. Corresponding property costs have increased by £1.6 million in the year to £2.7 million, but remain less than 7% of gross rents. As a consequence of the Internalisation, fee income, both management fee and performance fee, arising from the Green Park joint venture which previously passed to LSI Management LLP is now income to London & Stamford and amounts to £5.6 million for the six month period since 1 October 2010.

Operating profit

Under IFRS, the fair value of the consideration shares payable to the former partners of LSI Management LLP of £39.5 million is accounted for as a share based payment prepayment and held within the balance sheet as an asset (see note 16 to the financial statements). The management team are subject to a three year lock-in period from 1 October 2010 and therefore in accordance with IFRS the prepayment is expensed to the income statement over that period. The charge of £6.5 million to the income statement represents the amount for the period since 1 October 2010 and reduces the prepayment to £33.0million.

The acquisition of LSI Management LLP included the acquisition of the two property advisory agreements in respect of the assets of London & Stamford Property Limited and the Green Park Joint Venture.

The fair value attributed to the property advisory agreement with London & Stamford Property Limited of £34.9 million has been treated as a payment to avoid making future payments under the contract and has therefore been fully written off in the income statement in the year. The value attributed to the contract with the LSP Green Park Property Trust of £18.4 million is being amortised over the remaining period of the contract. Amortisation of £2.0 million has been charged to the income statement in the year.

The total amount expensed during the year as a result of Internalisation, including the expense for the share based payment, the write-off and amortisation of the property advisory agreements and acquisition costs, is £47.4 million.

The Internalisation has generated £41.8 million of negative goodwill which has been credited to the income statement in accordance with IFRS.

The general corporate costs include management fees of £4.7 million paid to the property advisor prior to Internalisation and are not recurring. The balance of the corporate overhead is recurring and includes the remuneration of executive directors and staff and the costs of operating the business which were previously borne by the property advisor.

Under IFRS, the costs of acquiring new investments accounted for as business combinations are written off to the income statement. A total of £5.0 million has been written off in the year in respect of the acquisitions of the Radial, Lojix and AEW portfolios.

Share of profit of associates

The share of profits from associates (the Green Park Joint Venture) for the year ended 31 March 2011 is £22.0 million (2010 - £29.4 million), which includes a revaluation surplus of £21.0 million (2010 - £29.8 million) on the revaluation of the Meadowhall property.

Net financing cost

Net financing costs in the year were £18.8 million (2010 - £7.3 million). The increase in net financing costs is a function of the increased debt which funded the new acquisitions in the year and correspondingly lower cash balances generating lower finance income.

Derivative financial instruments

The change in fair value of derivatives in the year has resulted in a credit to the income statement of £6.9 million (2010 - £4.5 million expense).

Taxation

The tax charge for the year is significant and represents in large part entry charges to the REIT regime in respect of the London & Stamford portfolio on 1 October 2010 and the charge in respect of the subsequent corporate acquisitions of the Lojix and AEW portfolios.

Balance Sheet

The balance sheet reflects the significant new investment undertaken by the Group in the year.

The value of our equity interest in Meadowhall of £113.3 million which is accounted for as an associate has increased by £26.1 million in the year (29%).

As a consequence of our investment programme, our cash balance has reduced to £156.8 million (2010 - £276.6 million). Since the year end, the cash balance has been increased by the disposal proceeds of £41.5 million from the transfer of the AEW and Lojix distribution portfolios into a joint venture with Green Park.

Funding

During the year, Green Park increased their commitment to the Joint Venture by £100 million, taking their total cash commitment to £300 million. £138.5 million of that commitment remains unallocated, £120 million having been deployed on Meadowhall and a further £41.5 million deployed on our distribution joint venture.

Borrowings have increased significantly over the year from £121.6 million to £383.0 million in support of our acquisition programme. Our overall net level of gearing is 31%.

We have fully utilised our £150 million Bank of Scotland revolving credit facility in support of the acquisition of the Radial portfolio. The very low 80 basis points margin contributing to our high cash on cash return on the portfolio.

We were delighted to enter into a new five year debt facility to finance the Lojix and AEW distribution portfolios with MetLife. The facility is for £133.3 million. This facility is our first with MetLife, who is an important new provider of debt to London & Stamford.

Our available firepower of c.£1 billion comprises the following:

	£ million
Cash as at 31 March 2011	156.8
Green Park Joint Venture cash received	41.5
Committed Green Park funding not yet utilised	138.5
Potential debt funding at an assumed gearing level of 65%	625.5
	962.3

Risk management

London & Stamford's strategy continues to be to provide a premium dividend yield by focusing on investing in well located, well let assets with high net initial yield.

Our target dividend yield will only be achieved when we have fully invested our cash and we continue to pursue opportunities, but we will not overpay for assets. We feel it is better to buy well, when we see real opportunity.

Our key investment criteria continues to be the delivery of high equity yield, which is dictated by the spread between the initial property yield and the cost of money. We will continue to seek and obtain prudent levels of keenly priced bank debt. As a fully distributing REIT, we will maintain a progressive dividend policy.

As a property investment company, we will focus on increasing our net asset value per share, through enhancement of the value of the real estate assets and positive income growth driven by active asset management initiatives.

The principal risks and uncertainties in meeting these key objectives are:

Delivery of Group's investment objectives

General economic conditions, the level and volatility of interest rates, potentially rising inflation and the lack of cost effective funding may mitigate against the achievement of investment performance. Through fixed interest rates or other hedging mechanisms, the Group ensures that its exposure to interest rate volatility is well managed.

No current debt facilities are due for refinancing until August 2014 at the earliest.

The Group will only enter into investment transactions where the spread between the cost of debt and the initial property yield produces sufficient equity return.

Enhanced property valuations

Property valuations are snapshots in time and there can be no certainty that property valuations will be realised.

However, our focus on secure income from well located assets with increasing weighted average lease lengths provides robust support to property valuations.

Added value property management initiatives

General economic uncertainty adversely impacts the property market and in particular raises the level of occupational risk. We continue to manage carefully our exposure to the risk of weakening credit worthiness in our tenant portfolio and undertake forensic due diligence on tenant covenants on acquisition.

Occupational weakness mitigates against tenant enhancements being a mechanism for driving rents upwards.

Key performance indicators

The main measure of the effectiveness of the Group's performance is the increasing dividend yield driven by high yielding, well located assets, with strong tenant covenants.

To this end, we have a very high occupancy rate and the management of occupational risk is a key deliverable. Long unexpired lease terms which lengthen as a consequence of added value asset management initiatives are a good indication of performance. As a result of a disciplined approach to investment, we have ensured that we have not overpaid for assets.

Our portfolio

Property	Description	Ownership	Size
Distribution
Unit A DIRFT, Daventry	Prime distribution unit let to Eddie Stobart Ltd (sublet to Tesco).	93.75%	201,393 sq ft
Unit B DIRFT, Daventry	Prime distribution unit let to Eddie Stobart Ltd (sublet to Excel Europe Ltd).	93.75%	142,920 sq ft
Unit C, DIRFT, Daventry	Prime distribution unit let to Ingram Micro Holdings Ltd.	93.75%	261,639 sq ft
Unit E1 DIRFT, Daventry	Prime distribution unit let to Northern Foods Distribution Ltd.	93.75%	224,245 sq ft
Brackmills, Immanis	Prime distribution unit let to Great Bear.	93.75%	126,620 sq ft
Travis Perkins, Brackmills	Prime distribution unit let to Travis Perkins Ltd.	93.75%	483,650 sq ft
Hams Hall, Coleshill	Prime distribution unit let to Accident Exchange plc.	93.75%	219,122 sq ft
Unit 5220 Magna Park	Prime distribution unit let to Unipart Logistics Ltd.	93.75%	205,780 sq ft
Relay Park, Tamworth	Prime distribution unit let to NYK Logistics (UK) Manufacturing & Retail Ltd.	93.75%	85,385 sq ft
Highway Point, Coleshill, Plot 1	Prime distribution unit let to Northrop Grumman.	93.75%	140,209 sq ft
Highway Point, Coleshill, Plot 3	Prime distribution unit let to Greenwood Communications Limited.	93.75%	120,681 sq ft
Radial Point, Stoke on Trent	Vacant.	93.75%	183,679 sq ft
Interlink Park, Bardon, Leicester	Prime distribution unit let to Antalis Limited.	93.75%	282,957 sq ft
7 Clydemill Place, Cambuslang	Prime distribution unit let to Kuehne & Nagel Ltd.	93.75%	120,717 sq ft
Brooklands, Weybridge	Prime distribution unit let to Tesco Distribution Ltd.	93.75%	313,135 sq ft
Western Approach, Severnside	Prime distribution unit let to Cemex.	93.75%	243,590 sq ft
DC1 Eastman Way, Hemel Hempstead	Prime distribution unit let to Next Group Plc.	100%	171,232 sq ft
DC2 Boundary Way, Hemel Hempstead	Prime distribution unit let to Keystone Distribution.	100%	245,975 sq ft
DC3 Boundary Way, Hemel Hempstead	Prime distribution unit let to Gist Ltd.	100%	122,856 sq ft
DC1 Cheaney Drive, Grange Park, Northampton	Prime distribution unit let to NYK Logistics.	100%	167,653 sq ft
DC2 Dolphin Way, Dolphin Park, Northampton	Prime distribution unit let to French Connection UK Ltd.	100%	148,980 sq ft
Central Park, Rugby	Prime distribution unit let to Pearson Shared Services Ltd.	100%	446,411 sq ft
Greenford	Prime distribution unit let to Kuehne & Nagel Drinkflow Logistics Ltd.	100%	133,351 sq ft
Polar Park, Heathrow	Prime distribution unit let to The Metropolitan Police Authority.	100%	60,051 sq ft
Heathrow Gateway, Feltham	Prime distribution unit let to Royal Mail.	100%	220,967 sq ft
Heathrow Gateway, Feltham	Prime distribution unit let to Ceva Freight (UK) Ltd.	100%	127,078 sq ft

Retail

Meadowhall Shopping Centre, Sheffield

Super Regional Shopping Centre held in joint venture with Green Park and British Land. The principal occupiers include Marks & Spencer, Debenhams, House of Fraser, BHS and Next.

15.7%

1.5m sq ft

London Offices

One Fleet Place, London

Prime office building in London EC1, let to Denton Wilde.

100%

169,296 sq ft

Residential

Bridges Wharf, Battersea	56 Residential Apartments, 45 held as rental stock with the balance for sale.	100%	51,882 sq ft
The Stadium, Highbury Square, London	Residential development of 139 apartments on Assured Shorthold Tenancies.	100%	98,196 sq ft

Business Parks

Focus National Distribution Centre, Tamworth	Distribution unit let to Focus DIY as its national distribution centre.	100%	591,597 sq ft
Forest House & Elm Park Court, Crawley	Freehold offices, let to Bard UK Ltd and Maple Oak plc.	100%	67,582 sq ft
Somerfield Distribution Unit	Distribution unit let to Somerfield Stores Ltd.	100%	341,320 sq ft
Glaisdale Parkway, Nottingham	Industrial warehouse let to Hillary's Blinds.	100%	133,717 sq ft

Developments

Buildings 1&2 Campbell Road, Stoke	Former Michelin tyre factory, currently vacant.	100%	433,783 sq ft
Barracks Road, Newcastle- under- Lyme	Out of town retail scheme, let to Bathstore and Domino's Pizza. Two further units with open A1 planning consent are vacant.	100%	33,033 sq ft
Lufton Trading Estate, Yeovil	Industrial development land.	100%	2.5 acres
Gillingham Business Park, Kent	Industrial development land.	100%	7.8 acres

Group Income Statement

For the year ended 31 March

	Note	2011 £000	2010  £000
Net rental income	2	36,056	16,140
Property advisory fee income		5,591	-
Net proceeds from sales of trading properties	2	181	-
Net income		41,828	16,140
General corporate costs		(10,699)	(11,695)
Share-based payments	3	(6,609)	-
Negative goodwill on acquisition of subsidiaries	16	42,917	-
Write down of positive goodwill on acquisition of subsidiaries	16	(7,544)	-
Write down and amortisation of intangible asset	16	(36,871)	-
Acquisition costs	16	(9,026)	-
Total administrative costs		(27,832)	(11,695)
Profit on revaluation of investment properties	9	30,080	72,099
Profit on sale of investment properties		2,609	10,634
Share of profits of associates	10	21,961	29,412
Operating profit	3	68,646	116,590
Finance income	5	1,165	1,465
Finance costs	5	(19,960)	(8,772)
Change in fair value of derivative financial instruments	5	6,923	(4,451)
Profit before tax		56,774	104,832
Taxation	6	(12,307)	1,234
Profit for the year and total comprehensive
income attributable to:
Equity shareholders		43,312	106,066
Minority interest		1,155	-
		44,467	106,066
Earnings per share
Basic and diluted	8	8.3p	24.8p

All amounts relate to continuing activities.

Group Balance Sheet

As at 31 March

	Note	2011 £000	2010  £000
Non current assets
Investment properties	9	748,275	357,695
Investment in equity accounted associates	10	115,345	89,285
Intangible asset	11	16,389	-
Other tangible assets		348	-
Deferred tax assets	6	7,883	7,071
		888,240	454,051
Current assets
Trading properties		5,760	-
Trade and other receivables	12	45,291	7,678
Cash and cash equivalents	13	156,785	276,593
		207,836	284,271
Total assets		1,096,076	738,322
Current liabilities
Trade and other payables	14	18,574	9,631
Corporation tax payable		14,197	654
		32,771	10,285
Non current liabilities
Borrowings	15	382,956	121,565
Derivative financial instruments	15	6,642	5,902
		389,598	127,467
Total liabilities		422,369	137,752
Net assets		673,707	600,570
Equity
Called up share capital	17	54,580	50,000
Special reserve		-	446,620
Other reserve		47,551	-
Retained earnings		566,589	103,950
Equity shareholders' funds		668,720	600,570
Minority interest		4,987	-
Total equity		673,707	600,570
Net asset value per share	8	122.5p	120.1p

The financial statements were approved and authorised for issue by the Board of Directors on 26 May 2011 and were signed on its behalf by

M F McGann

Director

Group Statement of Changes in Equity

For the year ended 31 March

	Note	Share capital £000	Special reserve £000	Other reserve £000	Retained earnings £000	Subtotal £000	Minority interest £000	Total £000
At 1 April 2010		50,000	446,620	-	103,950	600,570	-	600,570
Profit for the year		-	-	-	43,312	43,312	1,155	44,467
Minority interest on acquisition of subsidiary		-	-	-	-	-	4,169	4,169
Distribution paid to minorities		-	-	-	-	-	(337)	(337)
Reverse acquisition and share for share exchange		-	(446,620)	-	446,620	-	-	-
Share issue on acquisition of Property Advisor		4,580	-	48,084	-	52,664	-	52,664
Purchase of shares held in trust		-	-	(533)	-	(533)	-	(533)
Share-based payments		-	-	-	81	81	-	81
Dividends paid	7	-	-	-	(27,374)	(27,374)	-	(27,374)
At 31 March 2011		54,580	-	47,551	566,589	668,720	4,987	673,707

	Note	Share capital £000	Special reserve £000	Other reserve £000	Retained earnings £000	Subtotal £000	Minority interest £000	Total £000
At 1 April 2009		28,500	248,597	-	14,584	291,681	-	291,681
Profit for the year		-	-	-	106,066	106,066	-	106,066
Issue of ordinary share capital		21,500	198,023	-	-	219,523	-	219,523
Dividends paid	7	-	-	-	(16,700)	(16,700)	-	(16,700)
At 31 March 2010		50,000	446,620	-	103,950	600,570	-	600,570

Group Cash Flow Statement

For the year ended 31 March

	2011  £000	2010 £000
Cash flows from operating activities
Profit before tax	56,774	104,832
Adjustments for non-cash items:
Profit on revaluation of investment properties	(30,080)	(72,099)
Profit on sale of investment properties	(2,609)	(10,634)
Share of post-tax profit of associates	(21,961)	(29,412)
Share-based payment	6,609	-
Negative goodwill on acquisition of subsidiaries	(35,373)	-
Write down of intangible asset	36,871	-
Net finance costs	11,872	11,758
Cash flows from operations before changes in working capital	22,103	4,445
Change in trade and other receivables	(1,984)	(3,710)
Movement in lease incentives	(2,862)	-
Change in trade and other payables	1,316	5,328
Acquisition of trading properties	(5,760)	-
Change in provisions	-	(210)
Cash flows from operations	12,813	5,853
Interest received	1,160	1,562
Interest paid	(11,441)	(5,990)
Tax paid	(1,123)	(44)
Financial arrangement fees and break costs	(10,768)	(3,076)
Cash flows from operating activities	(9,359)	(1,695)
Investing activities
Purchase of subsidiary undertakings net of cash acquired	(77,844)	-
Purchase of investment properties	(59,656)	(199,030)
Purchase of rent guarantee arrangements	-	(2,679)
Capital expenditure on investment properties	(7,708)	(869)
Sale of investment property	103,168	52,224
Cash flow (to)/from associates	(4,099)	2,971
Cash flows from investing activities	(46,139)	(147,383)
Financing activities
Proceeds from share issue	-	219,523
Dividends paid	(27,711)	(16,700)
Purchase of shares held in trust	(533)	-
New borrowings	151,565	147,995
Repayment of loan facilities	(187,631)	(95,003)
Cash flows from financing activities	(64,310)	255,815
Net (decrease)/increase in cash and cash equivalents	(119,808)	106,737
Opening cash and cash equivalents	276,593	169,856
Closing cash and cash equivalents	156,785	276,593

Notes forming part of the Financial Statements

For the year ended 31 March 2011

1 Accounting policies

The financial information set out herein does not constitute the Group's statutory accounts for the years ended 31 March 2011 or 2010, but is derived from those accounts.  Statutory accounts for 2010 have been delivered to the Registrar of Companies in Guernsey and those for 2011 will be delivered to the Registrar of Companies in the United Kingdom following the Company's Annual General Meeting.

The Independent Auditor's report on the 2010 accounts was unqualified and concluded that the accounts were properly prepared in accordance with the Companies (Guernsey) Law, 2008 and IFRSs.  The Independent Auditor's report on the 2011 accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain statements under s498(2) or (3) of the Companies Act 2006.

a) General information

London & Stamford Property Plc was incorporated on 13 January 2010 under the Companies Act 2006 as a public limited company domiciled in the United Kingdom. The address of its registered office is 21 St James's Square, London SW1Y 4JZ.

On 1 October 2010 the Company acquired the entire issued share capital of London and Stamford Property Limited by way of a Scheme of Arrangement sanctioned by the Guernsey Court. The Company's shares were admitted to the premium listing segment of the Official List to trade on the Main Market of the London Stock Exchange. Trading in London & Stamford Property Limited's shares on AIM was cancelled on the same day. In addition, the business and assets of the Group's Property Advisor, LSI Management LLP, were acquired thereby internalising the management of the Company.

Following Admission the Group converted to a UK-REIT. London & Stamford Property Plc is the principal Company of the UK‑REIT Group.

b) Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.

c) Basis of preparation

The functional and presentational currency of the Company and all subsidiaries ('the Group') is sterling. The financial statements are prepared on the historical cost basis except that investment and development properties and derivative financial instruments are stated at fair value.

The accounting policies have been applied consistently in all material respects.

Under IFRS 3 'Business Combinations', the acquisition of London & Stamford Property Limited by London & Stamford Property Plc has been accounted for as a reverse acquisition. Although the consolidated financial statements have been prepared in the name of the legal parent, London & Stamford Property Plc, they are in substance a continuation of the financial statements of the legal subsidiary, London & Stamford Property Limited. The following accounting treatment has been applied in respect of the reverse acquisition:

The assets and liabilities of the legal subsidiary, London & Stamford Property Limited, are recognised and measured in the consolidated financial statements at the pre-combination carrying amounts, without restatement to fair value.

The retained earnings and special reserve recognised in the consolidated financial statements represent those of London & Stamford Property Limited to the date of the combination, and from this date to the period end represent those of London & Stamford Property Limited and London & Stamford Property Plc.

The equity structure appearing in the consolidated financial statements reflects the equity structure of the legal parent, London & Stamford Property Plc, including the equity instruments issued as part of the acquisition of London & Stamford Property Limited. Comparative numbers presented in the consolidated financial statements are those reported in the financial statements of the legal subsidiary, London & Stamford Property Limited.

The assets and liabilities of the Parent Company, London & Stamford Property Plc, are recognised on combination at their fair value.

i) Estimates and judgements

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Significant items subject to such assumptions and estimates include the fair value of investment properties, the measurement and recognition of provisions, the recognition of deferred tax assets and liabilities for potential corporation tax, amortisation of intangible assets and the fair value of derivative financial instruments. The most critical accounting polices in determining the financial condition and results of the Group are those requiring the greatest degree of subjective or complex judgements. These relate to property valuation, business combinations and goodwill, intangible assets, investment in associates, derivative financial instruments, provisions and taxation and these are discussed in the policies below. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period. If the revision affects both current and future periods, the change is recognised over those periods.

ii) Adoption of new and revised standards

Standards and interpretations effective in the current period

The adoption of the following standard issued by the International Accounting Standards Board ('IASB') has led to a change in the Group's accounting policies:

IFRS 3 Business Combinations (revised) requires all acquisition costs relating to a business combination to be written off to profit and loss in the period.

Standards and interpretations in issue not yet adopted

The IASB and the International Financial Reporting Interpretations Committee have issued the following standards and interpretations that are mandatory for later accounting periods and which have not been adopted early. These are:

		Effective date
IFRIC 19	Extinguishing financial liabilities with equity instruments	01/07/2010
IAS 24	Revised related party disclosures	01/01/2011
	Improvements to IFRSs	01/01/2011
IFRS 7	Amendments to IFRS 7	01/07/2011
IAS 12	Amendments to IAS 12	01/01/2012
IFRS 9	Financial instruments	01/01/2013

The Directors do not anticipate that the adoption of these standards and interpretations will have a material impact on the Group's financial statements in the period of initial application, other than on presentation and disclosure.

The IASB has also issued or revised IFRIC 14 and IFRS 1 which are not relevant to the operations of the Company or the Group.

d) Basis of consolidation

i) Subsidiaries

The consolidated financial statements include the accounts of the Company and the Group using the purchase method. Subsidiaries are those entities controlled by the Group. Control is assumed when the Group has the power to govern the financial and operating policies of an entity to gain benefits from its activities. In the consolidated balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair value at the acquisition date. The results of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

Where properties are acquired through corporate acquisitions and there are no significant assets or liabilities other than property, the acquisition is treated as an asset acquisition, in other cases the purchase method is used.

ii) Associates

Associates are those entities over whose activities the Group is in a position to exercise significant influence but does not have the power to jointly control.

Associates are accounted for under the equity method, whereby the consolidated balance sheet incorporates the Group's share of the net assets of its associates. The consolidated income statement incorporates the Group's share of associate profits after tax.

Accounting practices of subsidiaries and associates which differ from Group accounting policies are adjusted on consolidation.

iii) Intangible assets

Intangible assets, such as property advisory agreements acquired through business combinations, are measured initially at fair value and are amortised on a straight-line basis over their estimated useful lives. Intangible assets are subject to regular reviews for impairment.

iv) Goodwill

Any excess of the purchase price of business combinations over the fair value of the assets, liabilities and contingent liabilities acquired and resulting deferred tax thereon is recognised as goodwill. This is recognised as an asset and is reviewed for impairment at least annually. Any impairment is recognised immediately in profit or loss within administration expenses and is not subsequently reversed.

Any excess of the fair value of the assets, liabilities and contingent liabilities acquired and resulting deferred tax thereon over the purchase price of business combinations is recognised immediately in profit or loss.

e) Property portfolio

i) Investment properties

Investment properties are properties owned or leased by the Group which are held for long-term rental income and for capital appreciation. Investment property is initially recognised at cost and subsequently revalued at the balance sheet date to fair value as determined by professionally qualified external valuers on the basis of market value.

Gains or losses arising from changes in the fair value of investment property are recognised in the profit or loss of the period in which they arise. Depreciation is not provided in respect of investment properties including integral plant.

When the Group redevelops an existing investment property for continued future use as an investment property, the property remains an investment property measured at fair value and is not reclassified.

For leasehold properties that are classified as investment properties, the associated leasehold obligations are at peppercorn rents and are not considered to be material.

Any surplus or deficit arising on revaluing investment properties or investment properties being redeveloped is recognised in profit or loss.

ii) Development properties

Properties acquired with the intention of redevelopment are classified as development properties and stated initially at cost and then subsequently remeasured at fair value.

All costs directly associated with the purchase and construction of a development property including interest are capitalised. When development properties are completed, they are reclassified as investment properties and any accumulated revaluation surplus or deficit is transferred to retained earnings.

iii) Trading Properties

Trading properties are initially recognised at cost and subsequently at the lower of cost and net realisable value.

iv) Tenant leases

Management has exercised judgement in considering the potential transfer of the risks and rewards of ownership in accordance with IAS 17 for all properties leased to tenants and has determined that such leases are operating leases.

v) Net rental income

Revenue comprises rental income.

Rental income from investment property leased out under an operating lease is recognised in the profit or loss on a straight-line basis over the lease term.

Contingent rents, such as turnover rents, rent reviews and indexation, are recorded as income in the periods in which they are earned. Rent reviews are recognised when such reviews have been agreed with tenants.

Where a rent free period is included in a lease, the rental income foregone is allocated evenly over the period from the date of lease commencement to the lease termination date.

Lease incentives and costs associated with entering into tenant leases are amortised over the lease term.

Revenue from the sale of trading properties is recognised in the period within which there is an unconditional exchange of contracts.

Property operating expenses are expensed as incurred and any property operating expenditure not recovered from tenants through service charges is charged to profit or loss.

vi) Surplus on sale of investment and development properties

Surpluses on sales of investment and development properties are calculated by reference to the carrying value at the previous valuation date, adjusted for subsequent capital expenditure.

f) Financial assets and financial liabilities

Financial assets and financial liabilities are recognised in the balance sheet when the Group becomes a party to the contractual terms of the instrument. Unless otherwise indicated, the carrying amounts of the financial assets and liabilities are a reasonable approximation of their fair values.

i) Loans and receivables

These are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables comprise trade and other receivables, intra-group loans and cash and cash equivalents. Loans and receivables are initially recognised at fair value, plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment. Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.

ii) Other financial assets

These comprise deposits held with banks where the original maturity was more than three months.

iii) Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

iv) Other financial liabilities

Other financial liabilities include interest bearing loans, trade payables (including rent deposits and retentions under construction contracts) and other short-term monetary liabilities. Trade payables and other short-term monetary liabilities are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method. Interest bearing loans are initially recorded at fair value net of direct issue costs, and subsequently carried at amortised cost using the effective interest method. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis to the profit and loss account using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

v) Derivative financial instruments

The Group uses derivative financial instruments to hedge its exposure to interest rate risks.

Derivative financial instruments are recognised initially at fair value, which equates to cost and subsequently remeasured at fair value, with changes in fair value being included in profit or loss.

vi) Provisions

A provision is recognised when a legal or constructive obligation exists as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are measured at the Directors' best estimate of the expenditure required to settle that obligation at the balance sheet date, and are discounted to present value if the effect is material.

g) Finance costs

Net finance costs include interest payable on borrowings, net of interest capitalised and finance costs amortised.

h) Finance income

Finance income includes interest receivable on funds invested, measured at the effective rate of interest on the underlying sum invested.

i) Dividends

Dividends on equity shares are recognised when they become legally payable. In the case of interim dividends, this is when paid. In the case of final dividends, this is when approved by the shareholders at the Annual General Meeting.

j) Tax

Tax is included in profit or loss except to the extent that it relates to items recognised directly in equity, in which case the related tax is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, together with any adjustment in respect of previous years.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases.

The following differences are not provided for:

·  the initial recognition of goodwill;

·  goodwill for which amortisation is not tax deductible;

·  the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit; and

·  investments in subsidiaries, associates and jointly controlled entities where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

The amount of deferred tax provided is based on the expected manner or realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.

k) Share-based payments

The fair value of equity-settled share-based payments to employees is determined at the date of grant and is expensed on a straight-line basis over the vesting period based on the Group's estimate of shares that will eventually vest.

The cost of the Company's shares held by the Employee Benefit Trust is deducted from equity in the Group balance sheet. Any shares held by the Trust are not included in the calculation of earnings per share.

l) Segmental reporting

An operating segment is a distinguishable component of the Group that engages in business activities, earns revenue and incurs expenses, whose operating results are regularly reviewed by the Group's chief operating decision-makers and for which discrete financial information is available.

The Group has one business activity, being property investment and development and operates in the United Kingdom. The Group's investment properties are managed as a single portfolio by an asset management team whose responsibilities are not segregated by asset type or location, but on an asset by asset basis. The Board receives financial information for the portfolio as a whole and not as separate businesses or divisions. The Directors have considered the nature of the business, how the business is managed and how they review performance and, in their judgement believe that the Group has only one reportable business segment.

m) Capital management policy

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.

In managing its capital, the Group's primary objective is to ensure its continued ability to provide a consistent return for its equity shareholders through a combination of capital growth and distributions. In order to achieve this objective, the Group seeks to maintain a gearing ratio that balances risks and returns at an acceptable level and also maintain a sufficient funding base to enable the Group to meet its working capital and strategic investment needs. In making decisions to adjust its capital structure to achieve these aims, either through altering its dividend policy, new share issues, or the reduction of debt, the Group considers not only its short-term position but also its long-term operational and strategic objectives.

2 Net income

	2011 £000	2010  £000
Gross rental income	38,766	17,251
Property outgoings	(2,710)	(1,111)
	36,056	16,140
Proceeds from sales of trading properties	1,700	-
Cost of sales of trading properties	(1,519)	-
	181	-

For the year ended 31 March 2011 15% (2010: 34%) of the Group's gross rental income was receivable from one tenant.

Property outgoings of £0.5 million (2010: £0.5 million) related to investment properties that did not generate rental income in the year.

3 Profit from operations

	2011 £000	2010 £000
This has been arrived at after charging:
Property advisor management fees	4,711	6,769
Property advisor performance fees	-	4,010
Share-based payments	6,609	-
Auditors' remuneration:
Audit of the Group and Company Financial Statements, pursuant to legislation	192	134
Fees payable to the Company's auditors for other services to the Group:
- Statutory audit of subsidiary accounts, pursuant to legislation	22	9
- Taxation compliance work	46	48
- Corporate advisory services	441	96
- Other advisory services	20	-

4 Employee costs

	2011  £000	2010 £000
Employee costs, including those of Directors, comprise the following:
Wages and salaries	2,624	-
Social security costs	151	-
Other pension costs	137	-
Share based payment	81	-
	2,993	-

The share incentive scheme allows eligible employees to receive an award of shares, held in trust, dependent on performance conditions based on the net asset value of the Group over a three-year period. The Group expenses the estimated number of shares likely to vest over the three-year period based on the market price at the date of grant.

On 1 October 2010 awards were granted over 417,791 shares, with a share price at grant date of 115p and a vesting date three years from the date of grant. During the period an expense of £81,000 was recognised in profit or loss in respect of the scheme.

The average number of employees including executive Directors during the period was:

	2011 Number	2010 Number
Head office and property management	20	-

5 Finance income and costs

	2011  £000	2010 £000
Finance income
Interest on short-term deposits	1,165	1,465
	1,165	1,465
Finance costs
Interest on bank loans	12,384	6,757
Amortisation of loan issue costs and loan break costs	7,576	2,015
Fair value (profit)/loss on derivative financial instruments	(6,923)	4,451
	13,037	13,223

6 Taxation

	2011 £000	2010 £000
The tax charge/(credit) comprises:
Current tax
UK tax charge on profit	1,611	665
REIT charges	13,055	-
Deferred tax
Change in deferred tax	(2,359)	(1,899)
	12,307	(1,234)

The tax assessed for the year varies from the standard rate of corporation tax in the UK. The differences are explained below:

	2011 £000	2010 £000
Profit before tax	56,774	104,832
Profit at the standard rate of corporation tax in the UK of 28% (2010: 28%)	15,897	29,353
Effects of:
Expenses not deductible for tax purposes	16,686	1,069
Tax effect of income not subject to tax	(24,735)	(21,252)
Share of post tax profit of associate	(5,867)	(8,270)
Capital allowances	(147)	-
Prior year tax adjustments	133	-
Difference in tax rates	(356)	(235)
UK tax charge on profit	1,611	665

Deferred tax asset

	Revaluation deficit £000	Other temporary and deductible differences £000	Losses £000	Intangible assets £000	Total £000
At 31 March 2010	1,945	1,652	3,474	-	7,071
Acquisition of subsidiary	(1,547)	-	-	-	(1,547)
(Charged)/credited during the year	(398)	(1,652)	(1,666)	6,075	2,359
At 31 March 2011	-	-	1,808	6,075	7,883

Deferred tax arising on the revaluation deficit and on other temporary and deductible differences has been fully written off in the year as a result of the Group entering the REIT Regime on 1 October 2010.

The Group does not have unprovided deferred tax assets (2010: nil).

7 Dividends

	2011 £000	2010 £000
Ordinary dividends paid
2009 Final dividend: 2.0p per share	-	5,700
2010 Interim dividend: 2.2p per share	-	11,000
2010 Second interim dividend: 2.2p per share	11,000	-
2011 Interim dividend: 3.0p per share	16,374	-
	27,374	16,700
Proposed for approval by shareholders at Annual General Meeting
2011 Final dividend: 3.3p per share	18,011	-

The proposed final dividend was approved by the Board on 25 May 2011 and is subject to approval at the Annual General Meeting on 6 July 2011. It has not been included as a liability or deducted from retained profits in these accounts. The final dividend is payable on 7 July 2011 to ordinary shareholders on the register at the close of business on 10 June 2011 and will be recognised as an appropriation of retained earnings in 2012.

8 Earnings and net assets per share

Earnings per share of 8.3p (2010: 24.8p) is calculated on a weighted average of 522,688,690 (2010: 428,333,333) ordinary shares of 10p each and is based on profits attributable to ordinary shareholders of £43.3 million (2010: £106.1 million). There are no potentially dilutive or anti-dilutive share options in the year.

Net assets per share is based on equity shareholders' funds at 31 March 2011 of £668.7 million (2010: £600.6 million) and 545,795,171 ordinary shares in issue at that date (2010: 500,000,000).

Adjusted earnings and adjusted net assets per share are calculated in accordance with guidance issued by the European Public Real Estate Association (EPRA) as follows:

	2011  £000	2010  £000
Basic and adjusted earnings
Basic earnings attributable to ordinary shareholders	43,312	106,066
Revaluation of investment property (including share of associates)	(51,033)	(101,945)
Fair value of derivatives (including share of associates)	(6,975)	4,210
Goodwill on acquisitions (including share of associates)	(35,343)	(441)
Write down of intangible assets	36,871	-
Share-based payments	6,529	-
Acquisition costs	9,026	-
REIT charges	13,055	-
Deferred tax	(2,359)	(872)
Cost on closing out of derivatives	5,920	868
Profit on disposal of investment and trading property	(2,790)	(10,634)
Minority interest in respect of the above	(435)	-
EPRA adjusted earnings	15,778	(2,748)

As at 31 March	2011  Number of shares	2010 Number of shares
Number of shares
Opening ordinary share capital	500,000,000	285,000,000
Placing and Open Offer of 500 million ordinary shares (30 July 2009)	-	143,333,333
Issue of 45,795,171 ordinary shares (1 October 2010)	22,897,586	-
Shares held in employee trust (1 October 2010)	(208,896)	-
Weighted average number of ordinary shares	522,688,690	428,333,333
Basic earnings per share	8.3p	24.8p
EPRA adjusted earnings per share	3.0p	(0.6)p

As at 31 March	2011 £000	2010 £000
Net assets per share
Equity shareholders' funds	668,720	600,570
Fair value of derivatives	4,740	5,902
Fair value of associate's derivatives	815	867
Deferred tax	(6,075)	(3,597)
EPRA adjusted net assets	668,200	603,742
Basic net assets per share	122.5p	120.1p
EPRA adjusted net assets per share	122.4p	120.7p

9 Investment properties

			2011			2010
As at 31 March	Freehold  £000	Long leasehold £000	Total £000	Freehold  £000	Long leasehold £000	Total £000
Opening balance	291,827	65,868	357,695	119,306	7,841	127,147
Acquisitions	356,906	93,583	450,489	159,045	40,042	199,087
Other capital expenditure	7,704	4	7,708	472	480	952
Disposals	(97,708)	(2,851)	(100,559)	(40,748)	(842)	(41,590)
Revaluation movement	22,392	7,688	30,080	53,752	18,347	72,099
Movement in tenant incentives and rent free uplifts	2,432	430	2,862	-	-	-
At 31 March valuation	583,553	164,722	748,275	291,827	65,868	357,695

At 31 March 2011, certain of the Group's investment properties were externally valued by CB Richard Ellis Limited, Chartered Surveyors at £665.2 million and by Savills plc, Chartered Surveyors at £84.6 million (£83.1 million, net of income guarantees). The valuations were undertaken in accordance with the Royal Institution of Chartered Surveyors' Appraisal and Valuation Standards on the basis of market value. Market value represents the estimated amount for which a property would be expected to exchange at the date of valuation between a willing buyer and willing seller in an arm's-length transaction. A deduction is made to reflect purchasers' acquisition costs.

Included within the investment property valuation is £9.7 million (2010: £0.6 million) in respect of lease incentives and rent free periods.

The historical cost of all of the Group's investment properties at 31 March 2011 was £686.4 million (2010: £296.3 million).

10 Investment in associate

As at 31 March	2011 £000	2010  £000
Opening balance	89,285	62,844
Additions at cost	8,066	442
Share of profit in the year	21,961	29,412
Profit distributions received	(3,967)	(3,413)
At 31 March 2011	115,345	89,285

In February 2009 the Group entered into a joint venture arrangement with Green Park Investments, a wholly-owned subsidiary of a major Gulf institution. The Group has a 31.4% interest in this entity, LSP Green Park Property Trust, a Guernsey registered trust, which is equity accounted for by the Group as an associate. LSP Green Park Property Trust acquired a 50% interest in the Meadowhall Shopping Centre from The British Land Company PLC on 11 February 2009.

The Group's 31.4% share of the profit after tax and net assets of its associate is as follows:

	2011 £000	2010 £000
Summarised income statement
Net rental income	12,473	11,972
Administration expenses	(3,105)	(3,994)
Movement in fair value of net assets acquired over consideration paid	(30)	441
Surplus on revaluation of investment properties	20,953	29,846
Net finance costs	(8,171)	(8,695)
Tax	(159)	(158)
Profit after tax	21,961	29,412
Summarised balance sheet
Property assets	239,425	217,445
Current assets	4,763	4,449
Current liabilities	(6,245)	(7,638)
Borrowings	(105,084)	(107,196)
Other non-current liabilities	(17,514)	(17,775)
Net assets	115,345	89,285

The investment properties were valued on an open market value basis by CB Richard Ellis Limited, Chartered Surveyors, as at 31 March 2011 in accordance with the Royal Institution of Chartered Surveyors Appraisal and Valuation Standards.

11 Intangible assets

As at 31 March	2011 £000	2010  £000
Cost
Opening balance	-	-
Additions arising from business combinations	53,260	-
At 31 March 2011	53,260	-
Amortisation
Opening balance	-	-
Amortisation during the year	36,871	-
At 31 March 2011	36,871	-

As detailed in note 16, an intangible asset was created on the acquisition by the Company of the LSP Green Park Property Trust Property Advisory Agreement. The asset is being amortised on a straight-line basis over the remaining period of the contract to May 2015.

12 Trade and other receivables

As at 31 March	2011 £000	2010 £000
Trade receivables	1,603	3,806
Amounts receivable from income guarantees	1,518	2,679
Share-based payment prepayment	32,969	-
Prepayments and accrued income	784	447
Performance fees receivable	5,244	-
Other receivables	3,173	746
	45,291	7,678

All amounts fall due for payment in less than one year.

Trade receivables comprise rental income which is due on contractual quarter days with no credit period. All trade receivables are considered recoverable at the balance sheet date and as such no allowance for doubtful debts has been made. Since the year end all trade receivables have been collected.

At 31 March 2011 there were no amounts which were overdue and no amounts which were impaired. There is no provision for impairment of trade receivables as at 31 March 2011 as the risk of impairment of the amounts outstanding is not considered to be significant.

The Group's minimum lease payments receivable under non-cancellable operating leases, excluding associates, are as follows:

	2011  £000	2010 £000
Less than one year	48,227	20,382
Between one and five years	173,759	74,667
Between six and ten years	162,957	90,221
Between eleven and fifteen years	106,588	73,385
Between sixteen and twenty years	17,844	14,833
Over twenty years	-	2,180
	509,375	275,668

13 Cash and cash equivalents

Cash and cash equivalents include £11.1 million (2010: £1.1 million) retained in rent and restricted accounts which are not readily available to the Group for day to day commercial purposes.

14 Trade and other payables

As at 31 March	2011 £000	2010 £000
Trade payables	577	457
Amounts payable on property acquisitions and disposals	193	140
Rent received in advance	10,694	3,308
Accrued interest	2,220	1,277
Other payables	2,444	-
Other accruals and deferred income	2,446	4,449
	18,574	9,631

The Group has financial risk management policies in place to ensure that all payables are paid within the credit time frame.

15 Borrowings and financial instruments

a) Non-current financial liabilities

As at 31 March	2011 £000	2010 £000
Secured bank loans	386,669	123,542
Unamortised finance costs	(3,713)	(1,977)
	382,956	121,565

The bank loans are secured by fixed charges over certain of the Group's investment properties with a carrying value of £652 million and are repayable within two to five years of the balance sheet date.

b) Financial risk management

Financial risk factors

The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. The Group uses derivative financial instruments to hedge certain risk exposures.

The Group's operations and debt financing expose it to a variety of financial risks. The exposure to each risk, how it arises and the policy for managing each risk is summarised below:

i) Credit risk

Credit risk is the risk of financial loss to the Group if a client or counterparty to a financial instrument fails to meet its contractual obligations.

The Group's principal financial assets are cash balances and deposits and trade and other receivables. The Group's credit risk is primarily attributable to its cash deposits and trade receivables, the balance of which represents the Group's maximum exposure to credit risk.

The trade receivable amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is objective evidence that the Group will not be able to collect amounts due according to the original terms of the receivables concerned. The balance is low relative to the scale of the balance sheet and therefore the credit risk of trade receivables is considered to be low.

Cash is placed on deposit with a number of different reputable banks with strong credit ratings and for varying periods of time, thereby spreading risk.

The credit risk on liquid funds and derivative financial instruments is limited due to the Group's policy of monitoring counterparty exposures with a maximum exposure equal to the carrying amount of these instruments. The Group has no significant concentration of credit risk, with exposure spread over a large number of counterparties.

ii) Liquidity risk

Liquidity risk arises from the Group's management of working capital and the finance charges and principal repayments on its debt instruments. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.

The Group actively maintains a mixture of long-term and short-term committed facilities that are designed to ensure that the Group has sufficient available funds for operations and committed investments. The Group's undrawn committed borrowing facilities are monitored against projected cash flows. The Group prepares annual budgets and working capital forecasts to assess future cash requirements.

The Group had no available and undrawn bank loan facilities at 31 March 2011 (2010: £150 million).

iii) Market risk

The Group is exposed to market risk through interest rate fluctuations.

iv) Interest rate risk

The Group is exposed to interest rate risk from long-term borrowings at a variable rate. It is Group policy that a reasonable portion of external borrowings are at a fixed interest rate.

The Group uses interest rate swaps to manage its interest rate exposure and hedge future interest rate risk for the term of the bank loan. Although the Board accepts that this policy neither protects the Group entirely from the risk of paying rates in excess of current market rates nor eliminates fully the cash flow risk associated with interest payments, it considers that it achieves an appropriate balance of exposure to these risks.

At 31 March 2011 the Group had £351 million of hedges in place, and its debt was 91% fixed. Consequently, based on year end debt levels, a 1% change in interest rates would increase or decrease the Group's annual profit before tax by £1.0 million and £1.3 million respectively.

The average interest rate payable by the Group on all bank borrowings at 31 March 2011 net of undrawn facility commitment fees was 4.08% (31 March 2010: 5.83%).

v) Foreign exchange risk

Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the Group's functional currency.

The Group has not entered into any foreign currency transactions.

vi) Capital risk management

The Group defines its equity as share capital, other reserves and retained earnings. The Group's objectives when maintaining capital are to safeguard the entity's ability to continue as a going concern so that it can provide returns to shareholders. The capital structure of the Group consists of debt, which includes borrowings, cash and cash equivalents and other financial assets, and equity comprising issued capital, reserves and retained earnings. The Group balances its overall capital structure through the payment of dividends, new share issues as well as the issue of new debt or the redemption of existing debt.

c) Financial instruments

i) Categories of financial instruments

	Loans and receivables
As at 31 March	2011 £000	2010 £000
Current assets
Cash and cash equivalents	156,785	276,593
Trade receivables (note 12)	1,603	3,806
Amounts receivable from income guarantees (note 12)	1,518	2,679
Performance fees receivable (note 12)	5,244	-
Other receivables (note 12)	3,173	-
	168,323	283,078

	Measured at amortised cost		Measured at fair value
As at 31 March	2011  £000	2010  £000	2011  £000	2010 £000
Non current liabilities
Borrowings (note 15a)	382,956	121,565	-	-
Current liabilities
Trade payables (note 14)	577	457	-	-
Accrued interest (note 14)	2,220	1,277	-	-
Other accruals (note 14)	2,446	4,449	-	-
Other payables (note 14)	193	140	-	-
Corporation tax payable (note 14)	14,197	654	-	-
Derivative financial instruments (see 15c(iii))	-	-	6,642	5,902
	402,589	128,542	6,642	5,902

ii) Fair values

To the extent financial assets and liabilities are not carried at fair value in the consolidated balance sheet, the Directors are of the opinion that book value approximates to fair value at 31 March 2011.

iii) Derivative financial instruments

All derivative financial instruments are carried at fair value following a valuation as at 31 March 2011 by JC Rathbone Associates Limited.

Details of the fair value of the Group's derivative financial instruments that were in place at 31 March 2011 are provided below:

	Protected  rate %	Expiry	Market value 31 March 2010 £000	Acquired in  the period £000	Movement recognised in income statement £000	Market value 31 March 2011 £000
£10 million swap*	3.61	October 2012	(497)	-	497	-
£38.4 million swap*	3.68	June 2014	(2,035)	-	2,035	-
£19.8 million swap*	3.21	January 2015	(586)	-	586	-
£46 million swap*	3.16	May 2014	-	(2,279)	2,279	-
£41.8 million swap*	3.63	June 2014	-	(3,121)	3,121	-
£43 million swap	3.77	October 2014	(2,367)	-	447	(1,920)
£17.5 million cap	4.00	October 2014	416	-	(203)	213
£12.3 million swap	3.90	October 2014	(833)	-	(103)	(936)
£85 million swap	3.68	October 2014	-	(4,165)	207	(3,958)
£38.5 million swaption	3.75	October 2014	-	400	(315)	85
£48.1 million swap	2.69	January 2015	-	-	(587)	(587)
£66.6 million fixed rate	2.98	February 2016	-	-	(749)	(749)
£40.0 million cap	3.00	February 2016	-	1,502	(292)	1,210
			(5,902)	(7,663)	6,923	(6,642)

* Derivatives cancelled in the year

All derivative financial instruments are non-current and are interest rate derivatives.

The market values of hedging products change with interest rate fluctuations, but the exposure of the Group to movements in interest rates is protected by way of the hedging products listed above. In accordance with accounting standards, fair value is calculated on a replacement basis using mid-market rates. For all derivative financial instruments this equates to a Level 2 fair value measurement as defined by IFRS 7 Financial Instruments: Disclosures. The valuation therefore does not reflect the cost or gain to the Group of cancelling its interest rate protection at the balance sheet date, which is generally a marginally higher cost (or smaller gain) than a market valuation.

16 Acquisitions

(a) On 17 May 2010 the Group completed the corporate acquisition of a 94% interest in Radial Distribution Limited (subsequently renamed London & Stamford (Anglesea) Limited) from Warner Estates for a cash consideration of £1 million. As part of the acquisition the Group used £62.2 million of its cash resources and utilised its loan facility with Bank of Scotland to repay the outstanding bank borrowings acquired. Acquisition costs incurred of £4.0 million have been charged to the profit and loss in the period. The negative goodwill arising on the acquisition of £1.1 million has been credited to the profit and loss in the year.

This acquisition has contributed £14.7 million to Group income and £18.7 million to Group profit (before tax, goodwill and acquisition costs) since acquisition. If the acquisition had occurred on 1 April 2010, the contribution to Group income and Group profit would have been £16.8 million and £19.9 million respectively.

	Book value of net assets acquired £000	Bank loans £000	REIT conversion charge £000	Derivative financial instruments £000	Other £000	Revaluation £000	Fair value of net assets acquired £000
Non current assets
Investment property	204,918	-	-	-	-	18,121	223,039
Current assets
Trade and other receivables	2,009	-	-	-	(1,531)	-	478
Cash and cash equivalents	3,931	-	(1,123)	-	-	-	2,808
Current liabilities
Trade and other payables	(3,236)	-	1,123	-	-	-	(2,113)
Non current liabilities
Bank debt	(216,907)	67,735	-	-	(828)	-	(150,000)
Shareholder loans	-	(62,248)	-	-	-	-	(62,248)
Derivative financial instruments	-	-	-	(4,165)	-	-	(4,165)
Deferred tax liabilities	(1,547)	-	-	-	-	-	(1,547)
Minority interests	-	-	-	-	(4,169)	-	(4,169)
Net assets acquired	(10,832)	5,487	-	(4,165)	(6,528)	18,121	2,083
Negative goodwill on acquisition							(1,083)
Cost of acquisition							1,000

(b) On 1 October 2010 the Company acquired the entire issued share capital of London & Stamford Property Limited by way of a Scheme of Arrangement sanctioned by the Guernsey Court. In addition, the business and assets of the Group's Property Advisor were acquired thereby internalising the management of the Company. The consideration given to existing shareholders was new ordinary shares in London & Stamford Property Plc in exchange for existing ordinary shares in the same proportion. The fair value of assets acquired in this transaction was £50,000 and the fair value of the reverse acquisition consideration was £50,000. Consequently no goodwill arose on this transaction.

The fair value of the consideration payable by the Company under the LSI Acquisition Agreement to acquire the business of the Property Advisor was £52.7 million, satisfied by the issue of 45,795,171 new ordinary shares at 115p per share. Acquisition costs incurred of £3.9 million have been charged to the profit and loss in the year.

	Book value of net assets acquired £000	Intangible asset £000	Share-based payment £000	Fair value of net assets acquired £000
Non current assets
Intangible assets	-	53,260	-	53,260
Tangible assets	385	-	-	385
Current assets
Trade and other receivables	339	1,740	-	2,079
Share-based payment	-	-	39,498	39,498
Cash and cash equivalents	241	-	-	241
Current liabilities
Trade and other payables	(965)	-	-	(965)
Net assets acquired	-	55,000	39,498	94,498
Negative goodwill on acquisition				(41,834)
Cost of acquisition				52,664

The intangible asset created represented the fair value of the two Property Advisory Agreements acquired by the Group. The value attributed to the agreement with London & Stamford Property Limited of £34.9 million has been treated as a payment to avoid making future payments under the contract and has been fully written down in the year. The value attributed to the contract with the LSP Green Park Property Trust of £18.4 million is being amortised over the remaining period of the contract. Amortisation of £2.0 million has been charged to the profit and loss account in the year.

Of the purchase consideration of £52.7 million payable under the LSI Acquisition Agreements, £39.5 million is subject to bad leaver provisions and is contingent on future services being provided by the former members of the Property Advisor for three years post acquisition. This creates a share-based payment prepayment which will be charged to the profit and loss evenly over the three year period. In the year to 31 March 2011, £6.6 million has been charged to the profit and loss account, reducing the share-based payment prepayment to £33.0 million.

The total charge to the profit and loss account in the year to 31 March 2011 reflecting the internalisation was £5.6 million.

(c) On 5 November 2010 the Group completed the purchase of a portfolio of five distribution assets by acquiring the entire issued share capital of HEREF Green Box Limited from Harbert Management Corporation (Europe) for £34.5 million. Acquisition costs of £0.6 million and goodwill of £2.9 million have been charged to the profit and loss in the year.

This acquisition has contributed £2.4 million to Group income and £0.2 million to Group profit (before tax, goodwill and acquisition costs) since acquisition. If the acquisition had occurred on 1 April 2010, the contribution to Group income and Group profit would have been £5.7 million and £1.3 million respectively.

	Book value of net assets acquired  £000	Derivative financial instruments £000	Other  £000	Fair value of net assets acquired £000
Non current assets
Investment properties	82,000	-	-	82,000
Current assets
Trade and other receivables	58	-	-	58
Cash and cash equivalents	970	-	-	970
Current liabilities
Trade and other payables	(1,440)	-	(190)	(1,630)
Non current liabilities
Bank debt	(40,945)	-	446	(40,499)
Shareholder loans	(6,106)	-	-	(6,106)
Derivative financial instruments	-	(3,121)	-	(3,121)
Net assets acquired	34,537	(3,121)	256	31,672
Goodwill on acquisition				2,865
Cost of acquisition				34,537

(d) On 18 November 2010 the Group completed the purchase of a portfolio of four distribution assets by acquiring the entire issued share capital of EPISO Heathrow Limited (subsequently renamed L & S Heathrow Limited) from EPISO Heathrow s.a.r.l for £35.2 million.

Acquisition costs of £0.5 million and goodwill of £4.7 million have been charged to the profit and loss in the year.

This acquisition has contributed £2.1 million to Group income and £2.0 million to Group profit since acquisition. If the acquisition had occurred on 1 April 2010, the contribution to Group income and Group profit would have been £5.5 million and £4.0 million respectively.

	Book value of net assets acquired  £000	Revaluation £000	Derivative financial instruments £000	Other  £000	Fair value of net assets acquired £000
Non current assets
Investment properties	87,966	(2,366)	-	-	85,600
Current assets
Trade and other receivables	3	-	-	-	3
Cash and cash equivalents	1,992	-	-	-	1,992
Current liabilities
Trade and other payables	(1,749)	-	-	(34)	(1,783)
Non current liabilities
Bank debt	(46,000)	-	-	-	(46,000)
Shareholder loans	(7,000)	-	-	-	(7,000)
Derivative financial instruments	-	-	(2,279)	-	(2,279)
Net assets acquired	35,212	(2,366)	(2,279)	(34)	30,533
Goodwill on acquisition					4,679
Cost of acquisition					35,212

17 Share capital

As at 31 March	2011 Number	2011  £000	2010  Number	2010 £000
Authorised
Ordinary shares of 10p each	Unlimited	Unlimited	Unlimited	Unlimited

As at 31 March	2011 Number	2011 £000	2010 Number	2010 £000
Issued, called up and fully paid
Ordinary shares of 10p each	545,795,171	54,580	500,000,000	50,000

The Company was incorporated on 13 January 2010 with issued share capital of two subscriber shares of £1 each. On 26 January 2010 these were subdivided into 20 ordinary shares of 10p each. These initial shares were cancelled on 22 September 2010.

On 10 June 2010, 500,000 ordinary shares were issued and the Company entered into Initial Share Buyback Agreements granting call and put options in relation to these. Under the Initial Share Buyback Agreements, the Company granted options to purchase all of the 500,000 shares for a sum equal to the nominal value of such shares and the relevant shareholders granted options to the Company to sell all of the 500,000 shares to the Company for such sum. These shares were redeemed on 5 October 2010.

On 1 October 2010 the Company acquired the entire share capital of London & Stamford Property Limited by way of a share for share exchange by issuing 500,000,000 ordinary shares.

On 1 October 2010 the Company also acquired the entire share capital of LSI Management Limited by way of a share for share exchange by issuing 45,795,171 ordinary shares.

18 Reserves

The following describes the nature and purpose of each reserve within equity:

Share capital	The nominal value of shares issued.
Special reserve	A distributable reserve to be used for all purposes permitted under Guernsey company law, including the buy back of shares and payment of dividends.
Other reserve	A reserve relating to the application of merger relief in the acquisition of LSI Management Limited by London & Stamford Property Plc and the cost of shares held in trust to provide for the Company's future obligations under share award schemes.
Retained earnings	The cumulative profits and losses after the payment of dividends.

19 Related party transactions and balances

Raymond Mould, Patrick Vaughan and Martin McGann were members of LSI Management LLP, the former property advisor to the Group. During the year, LSI Management LLP received £4.6 million (2010: £6.8 million) for the services of property management. At 31 March 2011 and 31 March 2010, none of the fee remained outstanding.

On 1 October 2010 LSI Management LLP was acquired by the Group. The consideration payable was £55 million satisfied by the issue of 45,795,171 ordinary shares in the Company.

During the year the Group received property advisory fees of £5.6 million (2010: £nil) from LSP Green Park Property Trust, in which it has a 31.4% interest. Of these, performance fees of  £5.2 million were outstanding at 31 March 2011 and have been reflected in debtors.

Transactions between the Company and its subsidiaries which are related parties have been eliminated on consolidation.

20 Events after the balance sheet date

On 27 April 2011 the Group exchanged contracts for the acquisition of One Carter Lane and Two Old Change Court, London for £75.0 million from UBS Triton Property Fund.

On 6 May 2011 the Group completed the disposal of a 50% interest in a portfolio of ten prime distribution assets acquired in November 2010 to Green Park Investments for £41.5 million.

On 23 May 2011 the Group exchanged contracts to acquire Unit 5110, Magna Park, Lutterworth from Nippon Express (UK) Limited for £8.95 million.

 

END

 

 

FR SEFESIFFSELI