London & Associated Properties Regulatory News (LAS)

31 Mar 2008 08:02

London & Associated Properties PLC

Consolidated income statement for the year ended 31 December 2007

2007 2006 Notes ‚£'000 ‚£'000 Gross rental income Group and share of joint ventures 14,260 11,840 Less: joint ventures - share of rental (1,228) (3,949)income 13,032 7,891 Direct property expenses (2,481) (1,107) Overheads (4,974) (3,623) Property overheads (7,455) (4,730) Net rental income 5,577 3,161 Listed investments 144 264 Costs of evaluation (339) (1,849) Goodwill impairment (173) (7,483) Costs in relation to acquisition 1 (512) (9,332) Profit on sale of subsidiary - 52investments Profit on sale of investment properties 2,295 - Net (decrease)/increase on revaluation (25,208) 21,610of investment properties Net (decrease)/increase in value of (16) 680investments held for trading Operating (loss)/profit (17,720) 16,435 Share of profit of joint ventures 1572 4,358 Share of (loss)/profit of associate (448) 972 (16,596) 21,765 Interest receivable 2 1,583 742 Interest payable 2 (8,874) (4,182) (Loss)/profit before taxation (23,887) 18,325 Income tax 3 11,384 (3,107) (Loss)/profit for the year (12,503) 15,218 Basic (loss)/earnings per share 5 (16.40p) 20.00p Diluted (loss)/earnings per share 5 (16.40p) 19.97p

Consolidated balance sheet at 31 December 2007

2007 2006 Notes ‚£'000 ‚£'000 Non-current assets Market value of properties attributable 248,076 192,788to group Present value of head leases 31,671 9,340 Property 8 279,747 202,128 Plant and equipment 881 1,033 Investments in joint ventures 1,881 15,263 Investments in associated company 6,401 6,872 Held to maturity investments 5 1,834 288,915 227,130 Current assets Trade and other receivables 7,214 3,849 Financial assets-investments held for 5,113 4,992trading Cash and cash equivalents 16,464 14,555 28,791 23,396 Total assets 317,706 250,526 Current liabilities Financial liabilities-borrowings (6,250) (5,693) Trade and other payables (12,988) (11,434) Current tax liabilities (1,869) - (21,107) (17,127) Non current liabilities Financial liabilities-borrowings (162,866) (99,976) Present value of head leases on (31,671) (9,340)properties Deferred tax (13,071) (22,223) (207,608) (131,539) Total liabilities (228,715) (148,666) Net assets 88,991 101,860 Equity Share capital 8,232 8,232 Share premium account 5,236 5,236 Fair value reserve 1,001 - Translation reserve in associate (530) (517) Capital redemption reserve 47 47 Other reserves 429 429 Retained earnings (excluding treasury 81,125 94,966shares) Treasury shares (6,549) (6,533) Retained earnings 74,576 88,433 Total shareholders' equity 88,991 101,860 Net assets per share 6 116.86p 133.62p Diluted net assets per share 6 116.73p 133.47p

Consolidated statement of recognised income and expense for the year ended 31 December 2007

2007 2006 ‚£'000 ‚£'000 (Loss)/profit for the year (12,503) 15,218 Currency translation in associate (13) (541) Fair value on interest derivatives 1,388 - Deferred tax thereon (387) -

Total recognised income and expense for the year (11,515) 14,677

Consolidated statement of changes in shareholders' equity for the year ended 31 December 2007

Retained Earnings Fair Earnings Share Share Translation Other value Treasury excluding Total capital premium reserves reserves reserve shares treasury equity ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Balance at 8,232 5,228 24 476 - (6,632) 81,013 88,3411 January 2006 Investment - - - - - - 24 24valuation in joint venture Equity - - - - - - 44 44share options in associate Acquisition - - - - - (40) - (40)of own shares Disposal of - - - - - 139 - 139own shares Gain/(loss) - 8 - - - - (20) (12)on disposal of own shares Currency - - (541) - - - - (541)translation in associate Dividend - - - - - - (1,313) (1,313) Profit for - - - - - - 15,218 15,218year Balance at 8,232 5,236 (517) 476 - (6,533) 94,966 101,86031 December 2006 Retained Earnings Fair Earnings Share Share Translation Other value Treasury excluding Total

capital premium reserves reserves reserve shares treasury equity ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Balance at 8,232 5,236 (517) 476 - (6,533) 94,966 101,8601 January 2007 Equity - - - - - - 99 99share options in associate Fair value - - - - 1,001 - - 1,001of interest derivatives (net of deferred tax) Acquisition - - - - - (278) - (278)of own shares Disposal of - - - - - 262 - 262own shares Loss on - - - - - - (27) (27)disposal of own shares Currency - - (13) - - - - (13)translation in associate Dividend - - - - - - (1,410) (1,410) Loss for - - - - - - (12,503) (12,503)year Balance at 8,232 5,236 (530) 476 1,001 (6,549) 81,125 88,99131 December 2007

Other reserves includes capital redemption reserve of ‚£47,000 (2006:‚£47,000).

Consolidated cash flow statement for the year ended 31 December 2007

2007 2006 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Operating activities Operating (loss)/profit (17,720) 16,435 Depreciation 201 178 Goodwill impairment 173 7,483 Costs of evaluation 339 1,849 Costs in relation to acquisition 512 9,332 Loss/(gain) on disposal of non-current assets 9 (30) Profit on sale of investment properties (2,295) - Profit on sale of subsidiary investments - (52)

Net decrease/(increase) on revaluation of 25,208 (21,610) investment properties

Net decrease/(increase) in value of 16 (680) investments held for trading Increase in net current assets (1,966) (129) Cash generated from operations 3,965 3,444 Interest paid (9,303) (4,980) Interest received 1,916 757 Income tax paid (3,420) (359) Cash flows after interest and tax (6,842) (1,138) Investing activities Repayment of investment in loan stock in - 1,950 joint ventures

Acquisition of subsidiary investments (net of (11,097) (27,313) cash acquired)

Costs on acquisition of subsidiary (339) (1,849) investments Sale of subsidiary investments - 1,695

Property acquisitions and improvements (22,455) (2,656)

Sale of properties 43,804 1,453 Purchase of office equipment and motor cars (104) (204) Sale of office equipment and motor cars 29 61 Dividends received 3,343 7,248 Cash flows from investing activities 13,181 (19,615) Financing activities Purchase of Treasury shares (278) (40) Sale of Treasury shares 235 127 Equity dividends paid (1,410) (1,313) Debt repaid on acquisition of subsidiary - (23,375) investments (Repayment)/drawdown of short term loan from (163) 2,600 joint ventures (Repayment)/drawdown of medium term bank loan (3,371) 47,850 Cash flows from financing activities (4,987) 25,849 Net increase in cash and cash equivalents 1,352 5,096 Cash and cash equivalents at beginning of 8,862 3,766period Cash and cash equivalents at end of period 10,214 8,862 Cash and cash equivalents For the purpose of the cash flow statement, cash and cash equivalents comprise the following balance sheet amounts: 2007 2006 ‚£'000 ‚£'000 Cash and cash equivalents 16,464 14,555 Bank overdraft (6,250) (5,693) Cash and cash equivalents at end of period 10,214 8,862

‚£9.5m of cash deposits at 31 December 2007 was charged as security to the Prudential. This has been released since the year end.

Notes to the preliminary announcementfor the year ended 31 December 2007

Basis of Accounting

The results for the year ended 31 December 2007 have been prepared inaccordance with International Financial Reporting Standards (IFRS) as adoptedby the European Union. The principal accounting policies applied are the sameas those set out in the Financial Statements for the year ended 31 December2006.1.Exceptional items 2,007 2006 ‚£'000 ‚£'000 Costs in relation to acquisition: Costs of evaluation (339) (1,849) Goodwill impairment (173) (7,483)

Analytical Group (512) (9,332)

The costs of evaluation represents fees incurred by the Company, prior to the decision being taken that the company should acquire the 50% interest in the issued share capital of Analytical Properties Holdings Limited (Analytical Group) not already owned by the Company.

Goodwill impairment arose on the acquisition of Analytical Group on 25 September 2007. This goodwill arose primarily as a result of recognising the deferred tax which would arise if the properties within Analytical Group were realised at the fair valuation applied on acquisition. This goodwill is immediately written off to the income statement. The company also acquired ‚£ 1,829,000 of B loan stock of Analytical Group at par value.

2. Net finance costs 2007 2006 ‚£'000 ‚£'000 Interest receivable 1583 742 Interest payable -

Interest on bank loans and overdrafts (6,083) (2,839)

Other loans (3,138) (2,124) Interest on obligations under finance (798) 36leases Interest capitalised 1,145 745 (8,874) (4,182) (7,291) (3,440)3. Income tax 2007 2006 ‚£'000 ‚£'000 Current tax (1,721) - Deferred tax 13,105 (3,107) 11,384 (3,107)

4. Acquisition of Analytical Properties Holdings Limited-balance of 50 per cent of share capital

As the Group now owns 100 per cent of Analytical Properties Holdings Limited (APHL), it has been accounted for as a business combination.

The Group acquired the remaining 50 per cent of the issued share capital of APHL for a consideration of ‚£11.87m, including costs. The original holding of 50 per cent was treated as a joint venture previously and as it was acquired on the formation of APHL, there is no goodwill relating to this ownership.

Purchase consideration: ‚£'000 Cash paid-balance of 50 per 11,793 cent ordinary shares Add: Direct costs relating to 82 the acquisition Total net cost of acquisition 11,875 Fair value of net assets (11,702) acquired-50 per cent Goodwill 173 Net assets at fair value: Book value Fair value Fair value at of acquisition adjustments acquisition ‚£'000 ‚£'000 ‚£'000 Investment properties 97,092 1,165 98,257 Cash and cash equivalents 3,958 - 3,958 Debtors 2,071 40 2,111 Current liabilities (7,687) 437 (7,250) Non current liabilities (69,667) (437) (70,104) Deferred tax - (3,569) (3,569) 25,767 (2,364) 23,4035. (Loss)/Earnings per share 2007 2006 ‚£'000 ‚£'000 (Loss)/profit after tax (12,503) 15,218 Weighted average number of shares in 76,230 76,102issue for the period (`000) Basic (loss)/earnings per share (16.40p) 20.00p Diluted number of shares in issue re. 76,230 76,205outstanding share options(`000) Fully diluted (loss)/earnings per share (16.40p) 19.97p

Weighted average number of shares in issue is calculated after excluding treasury shares of 6,167,545.

On the basis that the Group has made a loss for the year there is no dilutive effect of the outstanding options.

6. Net assets per share 2007 2006 ‚£'000 ‚£'000 Shares in issue (`000) 76,149 76,229 Net assets per balance sheet 88,991 101,860 Basic net assets per share 116.86p 133.62p Shares in issue diluted by outstanding 76,269 76,349share options (`000) Net assets after issue of share options 89,031 101,900 Fully diluted net assets per share 116.73p 133.47p7.Dividend 2007 2006 Per ‚£'000 Per share ‚£'000 share

Dividends paid during the year relating 1.85p 1,410 1.725p 1,313 to the prior year

An interim dividend for 2007 of 0.65p amounting to ‚£497,000 was paid on 25 January 2008 (2006: 0.6p amounting to ‚£457,000). The directors recommend the payment of a final dividend for 2007 of 1.30p per ordinary share (2006: 1.25p) amounting to ‚£990,000 (2006: ‚£953,000), making the total dividend for 2007 1.95p amounting to ‚£1,487,000 (2006:1.85p amounting to ‚£1,410,000). The final dividend will be payable on 4 July 2008 to shareholders registered at the close of business on 30 May 2008.

8.Revaluation of investment properties

99.9% of freehold and long leasehold properties were valued as at 31 December 2007 by external professional firms of chartered surveyors, the balance being valued by the directors.

The valuations were made at open market value on the basis of existing use.

9.Financial information

The figures for the year ended 31 December 2006 are based on the audited accounts for that year, which have been delivered to the Registrar of Companies and on which the Auditors gave an unqualified report and did not contain a statement under Section 498(2) and (3) of the Companies Act 2006.

The financial information set out in this preliminary announcement, which was approved by the Board of London & Associated Properties PLC on 28th March 2008, is unaudited and does not constitute the Group's statutory accounts for the year ended

31 December 2007, but is derived from those accounts.