HCFT.L Regulatory News (HCFT)

HIGHCROFT INVESTMENTS PLC

Interim report

30 June 2011

Chairman's Statement for the six months ended 30 June 2011

Highlights

·; Rental income up 3.7% to £1,040,000 (2010 £1,002,000).

·; Profit before tax increased by 7.2% to £1,299,000 (2010 £1,212,000).

·; Basic earnings per share on all activities was 25.1p (2010 25.4p).

·; Net asset value per share increased to 724p (June 2010 676p and December 2010 716p).

·; Interim property income distribution increased 4.5% to 11.5p per share compared with 11.0p in 2010.

·; Net cash £3,306,000 (2010 £3,065,000) equivalent to 64p per share (2010 59p per share).

·; During the period three residential properties were disposed of and one lease extended yielding a total of £1,300,000 (2010 £297,000).

·; Contracts now exchanged for one further residential disposal and one commercial acquisition.

Dear Shareholder

The results for the 6 months ended 30 June 2011 are, in the circumstances of significant economic uncertainty, solid and reassuring. They show a steady income position and a slight increase in net asset value.

Gross rental income rose a little compared with 2010, reflecting improved commercial rental revenue - including that from our new property in Warwick - offset to a degree by the decline in rent from residential properties as they become vacant and are sold. Net rental income fell as a result of necessary expenditure - particularly in Yeovil - associated with new leases. Dividend income from our equity portfolio was helped by a special one off dividend resulting in an increase to £126k (2010: £101k). The net effect of this was that the revenue account profits reduced to £832k (2010: £862k) resulting in earnings per share of 16.1p (2010: 16.7p). I can also report that, notwithstanding the £19k costs associated with the general meeting requisitioned by certain shareholders, our administrative expenses have reduced slightly to £165k (2010: £168k).

In capital terms, a mixture of net valuation gains on our investment properties and a small valuation loss on our equity portfolio produced a capital profit of £467k (2010: £453k), resulting in earnings per share of 9.0p (2010: 8.7p).

Importantly, given the economic uncertainties with which the world is faced, our balance sheet remains very strong with cash at the half year end of £3.3m, no borrowings, and net assets per share of 724p (June 2010: 676p, December 2010: 716p). We still believe that it is right to take a cautious view but continue to look at properties that fit our criteria for the medium term. We have recently exchanged contracts for the purchase of an industrial unit in Andover and this purchase is expected to be completed in November 2011. The initial yield is 6.4% with an unexpired lease term of 23 years let to a strong covenant and is representative of the sort of purchases that we seek. In the first half of 2011 we have also completed on the sale of three of our residential properties and completed one lease extension. This has resulted in net proceeds of £1.3m being received. A further residential property became vacant in February on which we exchanged contracts for the sale in July and this sale is expected to complete next month. We have not disposed of any equities in the 6 months and have made a modest further investment into the market of £378k.

We believe that shareholders can take comfort in these difficult economic times from the quality of our property portfolio. Our confidence in the medium term is reflected in our decision to declare an interim dividend of 11.5p per share (2010 11p per share) payable on 20 October 2011.

Yours sincerely

J Hewitt

Chairman

25 August 2011

For further information, contact:

Highcroft Investments PLC

John Hewitt / Roberta Miles 01865 840 023

Charles Stanley Securities

Dugald Carlean / Karri Vuori 0207 149 6000

Condensed consolidated interim statement of comprehensive income (unaudited)

for the six months ended 30 June 2011

Condensed consolidated interim statement of financial position (unaudited)

as at 30 June 2011

Condensed consolidated interim statement of changes in equity

for the six months ended 30 June 2011

Condensed consolidated interim statement of cash flows (Unaudited)

for the six months ended 30 June 2011

NOTES (unaudited)

1. Nature of operations and general information

Highcroft Investments PLC ('Highcroft') and its subsidiary (together 'the group') principal activities are investment in property and equities. It is incorporated and domiciled in Great Britain. The address of Highcroft Investments PLC's registered office, which is also its principal place of business, is Thomas House, Langford Locks, Kidlington, OX5 1HR. Highcroft's condensed consolidated interim financial statements are presented in Pounds Sterling (£), which is also the functional currency of the group. These condensed consolidated interim financial statements have been approved for issue by the directors on 25 August 2011. The financial information for the year ended 31 December 2010 set out in this interim report does not constitute statutory accounts as defined in Section 404 of the Companies Act 2006. The group's statutory financial statements for the year ended 31 December 2010 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain statements under Section 498(2) or Section 498(5) of the Companies Act 2006.

2. Basis of preparation

These condensed consolidated interim financial statements are for the six months ended 30 June 2011. They have been prepared in accordance with IAS 34, Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2010.

These condensed consolidated interim financial statements have been prepared under the historical cost convention, as modified by the revaluation of investment properties and the measurement of equity investments at fair value. These condensed consolidated interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31 December 2010.

The accounting policies have been applied consistently throughout the group for the purposes of preparation of these condensed consolidated interim financial statements.

3. Segmental reporting

Segmental information is presented in the condensed consolidated interim financial statements in respect of the group's business segments. The business segment reporting format reflects the group's management and internal reporting structure. Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. All gross income is from external tenants or external investments.

The group is comprised of the following main business segments:

* Commercial property comprising retail outlets, offices and warehouses.

* Residential property comprising mainly single-let houses.

* Financial assets comprising exchange-traded equity investments.

3. Segmental reporting (continued)

The largest tenant represents 10% of gross commercial property income.

The taxation charge has been based on the estimated effective tax rate for the full year. As a Real Estate Investment Trust the group does not pay corporation tax on its profits and gains from its commercial and residential property activities.

5. Dividends

On 25 August 2011, the directors declared a property income dividend of 11.50p per share (2010 11.00p interim dividend) payable on 20 October 2011 to shareholders registered at 23 September 2011.

The following property income distributions have been paid by the company.

6. Earnings per share

The calculation of earnings per share is based on the profit for the period of £1,295,000 (2010 £1,315,000) and on 5,167,240 shares (2009 5,167,240) which is the weighted average number of shares in issue during the period ended 30 June 2011 and throughout the period since 1 January 2010.

The allocation differs to that disclosed in the year end published accounts to better reflect the designation of realised investment gains as capital in nature and to ensure consistency with prior years. There is no impact on the total year end results.

In order to draw attention to the impact of valuation gains and losses which are included in the income statement but not available for distribution under the company's articles of association, an adjusted earnings per share based on the profit available for distribution of £828,000 (2010 £862,000) has been calculated.

7. Investment property

The directors have used an external independent valuation of properties at 30 June 2011 which has been carried out consistently with the annual valuation.

8. Equity Investments

9. Related party transactions

Kingerlee Holdings Limited owns, through its wholly owned subsidiaries, 25.4% (2010: 25.4%) of the company's shares and D H Kingerlee and J C Kingerlee are directors of the company, Kingerlee Holdings Limited and its wholly owned subsidiaries and shareholders of the company and Kingerlee Holdings Limited.

During the period, the group made purchases from Kingerlee Holdings Limited or its subsidiaries, being a service charge in relation to services at Thomas House, Kidlington of £7,000 (2010: £7,000). The amount owed at 30 June 2011 was nil (2010: nil). All transactions were undertaken on an arm's length basis.