Town Centre Regulatory News (TOWN)

26 Feb 2008 07:01

Town Centre Securities PLC26 February 2008 26 February 2008 TOWN CENTRE SECURITIES PLC Interim results for the six months ended 31 December 2007 Town Centre Securities PLC, the Leeds based property investment and developmentcompany, today announces its interim results, for the six months ended 31December 2007. Financial highlights • Profit o Underlying profit after tax excluding disposal profits and losses and other exceptional items, £3.8m (2006: £3.2m) o Statutory profit £62.5m (2006: loss £21.3m) • Earnings per share o Underlying earnings per share 7.1p (2006: 5.8p) o Basic earnings per share 116.2p (2006: loss 38.6p) • Net assets* o Net asset value per share 562p (2006: 437p) o Triple net asset value per share 569p (2006: 468p) These calculations include 104p per share benefit from conversion to REIT status. • Dividends o Proposed interim ordinary dividend of 2.75p (2006: 2.10p), reflecting the benefits of REIT status • Funding o £150m of 5.375% debenture stock repayable in 2031 o £45m bank facilities due for renewal in 2012 Operational highlights:• £27.5m sale of retail property generating £4.2m profit on disposal • £12.0m purchase of a Homebase store on the outskirts of Glasgow • Excellent progress on development programmes, including Eastgate Quarters in Leeds, and portfolio improvement projects • Conversion to REIT status on 2 October 2007 Commenting on the interim results, Chairman and Chief Executive Edward Ziff,said: "Town Centre Securities PLC has strong rental income and low void levels. Ourfocus remains on improving our assets and our income through redevelopment,refurbishment and active management. We continue to progress our development pipeline to enhance our futureinvestment portfolio and to source new property asset backed opportunities suchas car parking and serviced apartments. We remain confident that our soundfinancial position will enable us to take advantage of further investmentopportunities which are beginning to emerge." * Based on 30 June 2007 investment property values. It is not the Company'spractice to revalue properties at the half year. The investment propertyportfolio is revalued once a year by independent external valuers. The nextportfolio valuation will take place in June 2008, and will be announced at thetime of the Company's preliminary results. For further information, please contact: Town Centre Securities PLC www.tcs-plc.com -----------------Edward Ziff, Chairman and Chief Executive 0113 222 1234Karen Prior, Finance Director Smithfield 0207 360 4900Reg Hoare / Miranda Good Notes to editors: Town Centre Securities PLC is a property investment and development company. Weaim to maximise shareholder returns over the long-term through the acquisitionand active management of investments and developments, with secure and growingincome in good and improving locations. Chairman and Chief Executive's report I am delighted to report to shareholders successful results for the half yearended 31 December 2007. This has been against the background of negative marketsentiment for the property sector, falling values and turmoil in the financialmarkets. We maintain our policy of revaluing the Group's investment portfolio annually on30 June, our financial year end. Given the unsettled current market conditions,which make the task of valuing properties more difficult due to a lower level oftransactional evidence being available, we do not believe there would be anybenefit to our shareholders in departing from this policy. In this context the Board has noted the fall in valuations being reported byother relevant property companies, with 31 December valuation dates, andrecognised UK property indices in the range of 8% to 15%, and believes that theGroup's portfolio will also have been impacted. Results Property rents remain in line with last year's levels in spite of the temporaryloss of income on properties currently undergoing refurbishment. Car parkrevenues have increased by 43%, due in part to the acquisition of new sites,contributing to a 5% increase in the Group's gross revenues in the period to£13.4m (2006: £12.8m). This is offset by higher costs associated with the carpark business and a higher level of irrecoverable expenses as a result ofplanned voids. Although underlying profit before tax was therefore reduced by 9% over theprevious year to £4.0m (2006: £4.5m), post tax earnings of £3.8m (2006: £3.2m)benefited from reduced tax charges due to REIT status from 2 October 2007. Thisresulted in earnings per share for the period increasing by 1.3p per share.Statutory profit was £62.5m (2006: loss £21.3m). This significant improvementreflects the benefit of the large tax credit in relation to conversion to aREIT, no repetition of the significant loss incurred on the re-financing of thedebenture last year and profits on disposals of properties. A reconciliation ofunderlying and statutory profit is provided in the Notes to the FinancialStatements. Total property assets were £502.6m*, slightly reduced from £504.4m as at 30 June2007 due to the net impact of property sales of £25.9m offset by propertyacquisitions of £13.2m, development expenditure of £7.3m and refurbishment costsof £3.6m. Total borrowings have also reduced slightly to £203.4m (30 June 2007:£205.5m). Net assets increased to £298.5m* (30 June 2007: £244.3m) reflectingthe net effect of becoming a REIT with the removal of the deferred tax liabilitytotalling £65.9m and estimated entry costs of £10.8m. This also accounts for thereduction in gearing to 68%, compared to 84% at 30 June 2007. Equity purchases Equity holdings have been sold in the period for a net loss of £0.5m generatingfunds of £8.7m. The company has bought in for cancellation 1.1m shares at anaverage price of 380p. Financing The Board believes that the Group is in a very strong position to weather thecurrent financial storms which are affecting access to funding lines andpressurising financing costs across the property sector. Of our total borrowingsof £203.4m at the half year end, the majority are long and medium term,comprising £150.0m 5.375% debenture stock expiring in 2031 and £45.0m of bankfacilities due for renewal in 2012. Unutilised funding lines amount to £63.6m. Risks and Uncertainties The operational and financial risks facing the Group for the remaining sixmonths of the financial year remain consistent with those stated in the AnnualReport for the year ended 30 June 2007. The current uncertainty surrounding the property market and the economic climatein general, presents a further risk being the future value to be placed onproperty assets. However, tenant occupancy levels and rental income remainstable. * Based on 30 June 2007 investment property values Dividend I am pleased to declare a 31% increase in the interim dividend to 2.75p pershare (2006: 2.10p). This will be paid on 30 June 2008 to shareholdersregistered on 30 May 2008. The Group converted to REIT status on 2 October 2007 and as a consequence theGroup will be exempt from liability to pay corporation tax on property rentalsand disposals. This will benefit the full year outturn with a substantiallyreduced tax charge. Our dividend policy will reflect both the performance of thebusiness and the reduced underlying tax charge and we currently have nointention of changing significantly the proportion of the total annual dividendpayable at the interim. Under the REIT rules we are required to make Property Income Distributions("PID's") to shareholders, amounting to 90% of the eligible UK profits, aftercertain deductions. The interim dividend will be paid as an ordinary dividendand the final dividend in respect of the year ending 30 June 2008 will compriseboth PID and ordinary dividend, the amount and split of which will be declaredin September 2008. Further information can be found on the Company's website. Review of activities Investment portfolio We sold retail properties at The Malthouse and Fisherton Street in Salisburyalong with development property in West Yorkshire for £29.9m. The price achievedcreated a profit of £4.2m and a gain on historic cost of £14.8m. We haveacquired a Homebase store on the outskirts of Glasgow for £12.0m and incurred£10.9m expenditure on our refurbishments and on our development portfolio. Occupancy levels remain high with void levels at 31 December running at 5% ofwhich 3% are in respect of property undergoing planned improvement works. Rentreviews continue to be settled at satisfactory levels. The main refurbishment schemes include the first phase in upgrading offices andshopping premises at Merrion Centre, Leeds; the enlargement and upgrading of a40,000 sq ft retail unit on Deansgate, Manchester; reconfiguration of CentralRetail Park, Rochdale; the demolition of property at West Park, Harrogate tocreate a retail and residential scheme; and the refurbishment of the upperfloors of premises at Bath Street, Glasgow to create 20 top quality servicedapartments which we operate ourselves. Development projects Eastgate Quarters, Leeds This scheme is being developed in association with Hammerson plc. It will beanchored by John Lewis and Marks & Spencer stores and will include over 100retail units, restaurants, hotel, office accommodation, up to 600 new homes and2,700 associated car parking spaces. Subject to the Compulsory Purchase Orderbeing confirmed, it is anticipated that construction of Eastgate Quarters willbegin in 2009, with completion expected in 2012. Piccadilly Basin Our development site located in Manchester City Centre is in close proximity toPiccadilly station and encompasses the Piccadilly canal basin and a marina.Construction of a new waterside 33,000 sq ft office building for architectsBuilding Design Partnership has been handed over for their fit out. We have alsocompleted the restoration of Carvers Warehouse, the oldest surviving stonewarehouse in Manchester city centre. It now comprises over 20,000 sq ft ofoffice space and is substantially let. External works to restore a listed building, Brownsfield Mill, have completedwith a view to commencing internal works for a mixed retail and office schemelater this year. Planning approvals have been obtained for a retail and residential developmentfronting Great Ancoats Street. The consent, for further phases of ourregeneration scheme, is for a large mixed use scheme with 40,000 sq ft of retailspace, a 12,000 sq ft waterside restaurant, 4,000 sq ft of offices and over 200apartments. Detailed consent has been granted for the construction of EiderHouse to comprise 88,000 sq ft of offices. Whitehall Road, Leeds Following on from the successful development and sale of No.1 WhitehallRiverside, detailed planning consents have been obtained for two further officebuildings totalling 210,000 sq ft. Detailed design work and marketing has nowcommenced on these prestigious office developments which are adjacent to theriver and in close proximity to the railway station. Car parking Our latest acquisitions at Clarence Dock, Leeds and Sheffield railway stationare performing well and in line with expectations. We continue to pursueopportunities to expand our car park business. Outlook Town Centre Securities PLC has strong rental income and low void levels. Ourfocus remains on improving our assets and our income through redevelopment,refurbishment and active management. We continue to progress our development pipeline to enhance our futureinvestment portfolio and to source new property asset backed opportunities suchas car parking and serviced apartments. We remain confident that our soundfinancial position will enable us to take advantage of further investmentopportunities which are beginning to emerge. Edward ZiffChairman and Chief Executive26 February 2008 Consolidated Income Statement 6 months ended 6 months ended Year ended 31 December 31 December 30 June 2007 2006 2007 Unaudited Unaudited Audited Notes £000 £000 £000--------------------------------------------------------------------------------Gross revenue 2 13,445 12,794 25,525Property expenses (1,952) (1,190) (2,622)--------------------------------------------------------------------------------Net revenue 11,493 11,604 22,903Administrative expenses (2,711) (3,249) (6,944)Other income 332 755 2,587Profit on disposal ofinvestment properties 4,195 5,300 4,911(Loss)/profit on disposal oflisted investments (524) 3,675 3,889Valuation movement oninvestment properties - - 23,586--------------------------------------------------------------------------------Operating profit 12,785 18,085 50,932Loss on debenture exchange - (41,554) (41,552)Finance expense (5,699) (5,107) (9,511)Finance income 536 12 274Share of post tax profitsfrom joint ventures 79 72 268--------------------------------------------------------------------------------Profit/(loss) beforetaxation 7,701 (28,492) 411Taxation credit 3 54,847 7,157 134--------------------------------------------------------------------------------Profit/(loss) for the period 62,548 (21,335) 545--------------------------------------------------------------------------------All profit/(loss) for the period is attributable to equity shareholders. Earnings/(loss) per ordinaryshare of 25p each: 5Basic 116.2p (38.6)p 1.0pDiluted 116.1p (38.6)p 1.0p-------------------------------------------------------------------------------- The directors have approved an interim dividend of 2.75 per share (2006: 2.10p).The total cost of dividends paid in the period is £2.9m (six months to 31December 2006: £4.0m). Consolidated Statement of Recognised Income and Expense 6 months ended 6 months ended Year ended 31 December 31 December 30 June 2007 2006 2007 Unaudited Unaudited Audited £000 £000 £000--------------------------------------------------------------------------------Profit/(loss) for the period 62,548 (21,335) 545Revaluation (deficits)/gains onother investments (1,178) 222 521--------------------------------------------------------------------------------Total recognisedincome/(expense) for the period 61,370 (21,113) 1,066-------------------------------------------------------------------------------- All recognised income/(expense) for the period is attributable to the equityshareholders. Consolidated Balance Sheet 31 December 31 December 30 June 2007 2006 2007 Unaudited Unaudited Audited Notes £000 £000 £000--------------------------------------------------------------------------------Non-current assetsInvestment properties 6 474,180 438,903 483,239Property, plant and equipment 6 29,162 16,500 21,952Investments in joint ventures 15,515 4,065 12,801Pre-paid operating lease payments 1,085 940 1,050Deferred tax assets - 527 216--------------------------------------------------------------------------------Total non-current assets 519,942 460,935 519,258--------------------------------------------------------------------------------Current assetsInvestments 5,396 3,950 8,400Trade and other receivables 3,052 9,182 7,507--------------------------------------------------------------------------------Total current assets 8,448 13,132 15,907--------------------------------------------------------------------------------Total assets 528,390 474,067 535,165--------------------------------------------------------------------------------Current liabilitiesFinancial liabilities - borrowings (11,726) (3,557) (30,892)Trade and other payables (13,804) (13,479) (17,532)Current tax liabilities (4,328) (2,988) (1,672)--------------------------------------------------------------------------------Total current liabilities (29,858) (20,024) (50,096)--------------------------------------------------------------------------------Net current liabilities (21,410) (6,892) (34,189)Non-current liabilitiesFinancial liabilities - borrowings (191,630) (155,617) (174,623)Other creditors (8,366) - -Deferred tax liabilities (46) (58,141) (66,160)--------------------------------------------------------------------------------Total non-current liabilities (200,042) (213,758) (240,783)--------------------------------------------------------------------------------Total liabilities (229,900) (233,782) (290,879)--------------------------------------------------------------------------------Net assets 298,490 240,285 244,286--------------------------------------------------------------------------------Shareholders' equityCalled up share capital 8 13,286 13,813 13,541Share premium account 9 181 63 146Other reserves 9 559 - 294Retained earnings 9 284,464 226,409 230,305--------------------------------------------------------------------------------Total equity 10 298,490 240,285 244,286--------------------------------------------------------------------------------Net assets per share 562p 437p 451p-------------------------------------------------------------------------------- Consolidated Cash Flow Statement Six months ended Six months ended Year ended 31 December 31 December 30 June 2007 2006 2007 Unaudited Unaudited Audited------------------------------------------------------------------------------------------------ £000 £000 £000 £000 £000 £000------------------------------------------------------------------------------------------------Cash flows fromoperating activitiesCash generatedfrom operations 8,401 7,529 18,390Interest paid (6,042) (4,451) (9,374)Interest received 33 12 274Taxreceived/(paid) 2 (636) (645)------------------------------------------------------------------------------------------------Net cash fromoperatingactivities 2,394 2,454 8,645------------------------------------------------------------------------------------------------Cash flows frominvesting activitiesPurchases ofinvestmentproperties (17,978) (4,542) (23,343)Purchases ofproperty, plantand equipment (7,592) (3,276) (8,513)Purchases ofinvestments (3,984) (2,562) (16,925)Purchase of jointventure investment - (1,844) (1,844)Proceeds from saleof investmentproperties 27,495 62,700 62,283Proceeds from saleof subsidiaryundertaking 2,500 - -Proceeds from saleof property, plantand equipment 69 11 28Proceeds from saleof investments 8,664 11,851 18,837Dividends receivedfrom joint venture - 90 90Loans to jointventures forpurchases ofinvestmentproperty (2,092) (6,482) (8,855)------------------------------------------------------------------------------------------------Net cash generatedfrom investingactivities 7,082 55,946 21,758------------------------------------------------------------------------------------------------Cash flows fromfinancing activitiesProceeds fromissue of sharecapital 45 81 187Purchase of ownshares for ShareIncentive Plan (8) (294) (65)Repayment of othernon-currentborrowings (8,000) (72,000) (28,000)Repurchase ofshare capital (4,477) - (6,229)Proceeds fromissue of newdebenture stock - 21,401 21,007Dividends paid toshareholders (2,870) (3,976) (16,026)------------------------------------------------------------------------------------------------Net cash used infinancingactivities (15,310) (54,788) (29,126)------------------------------------------------------------------------------------------------Net(decrease)/increasein cash and cashequivalents (5,834) 3,612 1,277Cash and cashequivalents at 1July (5,892) (7,169) (7,169)------------------------------------------------------------------------------------------------Cash and cashequivalents atperiod end (11,726) (3,557) (5,892)------------------------------------------------------------------------------------------------ The Consolidated Cash Flow Statement should read in conjunction with Note 11. Notes to the Financial Statements 1. Basis of preparation These interim financial statements were approved for issue on 26 February 2008. These interim financial statements have been prepared in accordance withInternational Financial Reporting Standards (IFRS) and IFRIC interpretations andwith those parts of the Companies Act 1985 and the listing rules application tocompanies reporting under IFRS. These interim financial statements have been prepared under the historical costconvention as modified by the revaluation of land and buildings, available forsale investments, financial assets and liabilities held for trading andshare-based payments. Investment properties have not been revalued at 31December 2007. Therefore tangible assets comprise the 30 June 2007 valuationadjusted for additions and disposals in the interim period. The principalaccounting policies following in the preparation of these interim financialstatements are set out in the Group's Annual Report and Accounts for the yearended 30 June 2007 on pages 43 to 48. The financial information included in these interim financial statements for thesix months ended 31 December 2007 does not constitute a set of statutoryaccounts as defined in section 240 of the Companies Act 1985, and is unaudited.The comparative figures for the six months to 31 December 2006 were alsounaudited. Statutory accounts for the year ended 30 June 2007 were approved bythe Board of directors on 7 September 2007 and delivered to the Registrar ofCompanies. The report of the auditors on those accounts was unqualified, did notcontain an emphasis of matter paragraph and did not contain any statement undersection 237(2) or (3) of the Companies Act 1985. These interim financial statements for the half year ended 30 December 2007 havebeen prepared in accordance with the Disclosure and Transparency Rules of theFinancial Services Authority and with IAS 34, 'Interim financial reporting' asadopted by the European Union. 2. Revenue and underlying profit before taxation 6 months ended 6 months ended Year ended 31 December 2007 31 December 2006 30 June 2007 £000 £000 £000--------------------------------------------------------------------------------Rental income frominvestment properties 11,382 11,347 22,568Income from car parks 2,063 1,447 2,957-------------------------------------------------------------------------------- 13,445 12,794 25,525--------------------------------------------------------------------------------Property expenses (1,328) (767) (984)Car Park expenses (624) (423) (1,638)Administrative expenses (2,711) (2,884) (5,841)-------------------------------------------------------------------------------- 8,782 8,720 17,062--------------------------------------------------------------------------------Joint venture income 79 72 160Other income 332 755 637Interest (5,163) (5,095) (9,237)--------------------------------------------------------------------------------Underlying profit beforetax 4,030 4,452 8,622-------------------------------------------------------------------------------- 3. Taxation 6 months ended 6 months ended Year ended 31 December 2007 31 December 2006 30 June 2007 £000 £000 £000--------------------------------------------------------------------------------Current taxTax expense/(credit) forthe period 210 - (1,307)REIT conversion charge 10,841 - ---------------------------------------------------------------------------------Total current taxexpense/(credit) 11,051 - (1,307)--------------------------------------------------------------------------------Deferred taxDeferred tax(credit)/expense for theperiod - (7,157) 1,173Released on conversion toREIT (65,898) - ---------------------------------------------------------------------------------Total deferred tax(credit)/expense (65,898) (7,157) 1,173--------------------------------------------------------------------------------Total tax credit in theincome statement (54,847) (7,157) (134)-------------------------------------------------------------------------------- 4. Dividends A final dividend in respect of 2007 of 5.4p per share was approved at theCompany's Annual General Meeting on 21 November 2007 and paid to shareholders on2 January 2008. An interim dividend in respect of 2008 of 2.75p per share is also proposed. Thisamounts to an estimated dividend of £1.48m which has not been reflected in thisreport and which will be paid on 30 June 2008 to shareholders on the register on30 May 2008. 5. Earnings/(loss) per share 6 months ended 6 months ended Year ended 31 December 31 December 30 June 2007 2006 2007------------------------------------------------------------------------------------- Earnings Earnings Earnings Earnings per Earnings per Earnings per share share share £000 pence £000 pence £000 pence-----------------------------------------------------------------------------------------Basic earningsand earningsper share 62,548 116.2 (21,335) (38.6) 545 1.0REITconversioncharge &associatedcosts 10,841 20.1 - - 153 0.3Release ofdeferredtaxation onconversion toREIT (65,898) (122.4) - - - -Loss ondebentureexchange - - 39,336 71.2 29,173 53.1Profit ondisposal ofinvestmentproperties (4,195) (7.8) (12,440) (22.5) (4,339) (7.9)Post taxloss/(profit)on disposal oflistedinvestments 524 1.0 (2,639) (4.8) (2,722) (5.0)Equity-basedremuneration - - 255 0.5 619 1.1Revaluationmovement oninvestmentproperties - - - - (23,586) (42.8)Exceptionalreceipt onleaseassignment - - - - (1,365) (2.5)Revaluationmovement oninvestmentproperties injoint ventures - - - - (121) (0.2)Deferred taxon revaluationof investmentproperties - - - - 8,875 16.1-----------------------------------------------------------------------------------------Underlyingearnings andearnings pershare 3,820 7.1 3,177 5.8 7,232 13.2----------------------------------------------------------------------------------------- Earnings per share is calculated on the weighted average of 53.8m ordinaryshares in issue (31 December 2006: 55.2m, 30 June 2007: 55.0m). The dilutedearnings/(loss) per share as at 31 December 2007 is 116.1p per share andunderlying: 7.1p (31 December 2006: (38.6p), underlying: 5.8p; 30 June 2007:1.0p, underlying: 13.2p). 6. Tangible fixed assets a) Investment properties Long Freehold leasehold Total £000 £000 £000--------------------------------------------------------------------------------Valuation at 1 July 2007 443,139 40,100 483,239Additions 16,686 105 16,791Disposals (5,350) (20,500) (25,850)Transfers (2) 2 ---------------------------------------------------------------------------------Balance at 31 December 2007 454,473 19,707 474,180b) Property, plant and equipment Development properties £000--------------------------------------------------------------------------------Cost at 1 July 2007 21,140Additions 7,264--------------------------------------------------------------------------------Net book value at 31 December 2007 28,404-------------------------------------------------------------------------------- Fixtures, equipment and motor vehicles £000--------------------------------------------------------------------------------Net book value at 1 July 2007 812Additions 184Disposals (80)Depreciation (158)--------------------------------------------------------------------------------Net book value at 31 December 2007 758--------------------------------------------------------------------------------Total property, plant and equipment at 31December 2007 29,162-------------------------------------------------------------------------------- 7. Borrowings, bank loans and overdraft On October 19 2007, under a hedging instrument, the company fixed £40m ofborrowings at 5.78% plus margin (6.44% inclusive) until October 18 2009. Furtherborrowings of £150m are on fixed rates at 5.375%. Remaining borrowings are being rolled over on monthly LIBOR. 8. Called up equity share capital Authorised 164,879,000 (30 June 2007: 164,879,000) ordinary shares of 25p each. Issued and fully paid Number Nominal of shares value 000 £000--------------------------------------------------------------------------------At 1 July 2007 54,163 13,541Buy-back of own shares (1,057) (265)Issued on take-up of options 39 10--------------------------------------------------------------------------------At 31 December 2007 53,145 13,286-------------------------------------------------------------------------------- 9. Reserves Share premium Other Retained account reserves earnings-------------------------------------------------------------------------------- At 1 July 2007 146 294 230,305Retained profitfor the period - - 59,678Reversal ofhistoric surpluson revaluationof investmentsrecognised inprofit in period - - (71)Deficit onrevaluation ofinvestments - - (1,178)Considerationpaid forpurchase of ownshares (held intrust) - - (8)Arising onpurchase andcancellation ofown shares - 265 (4,020)Release ofretainedearnings ondisposal ofsubsidiaryundertaking - - (242)New sharecapitalsubscribed 35 - --------------------------------------------------------------------------------- Closingshareholders'equity 181 559 284,464-------------------------------------------------------------------------------- 10. Statement of changes in shareholders' equity 6 months ended 6 months ended Year ended 31 December 31 December 30 June 2007 2006 2007 £000 £000 £000--------------------------------------------------------------------------------Profit/(loss) for the period 62,548 (21,335) 545Dividends (2,870) (3,976) (16,026)-------------------------------------------------------------------------------- 59,678 (25,311) (15,481)Other adjustments - - (8)Arising on purchase andcancellation of own shares (4,020) - (6,400)Release of retained earnings ondisposal of subsidiaryundertaking (242) - -Deficit on revaluation of ownshares held - - (65)New share capital subscribed 45 81 187(Deficit)/surplus onrevaluation of investments (1,178) 222 521Reversal of historic surplus onrevaluation of investmentsrecognised in loss for period (71) (3,328) (3,318)Consideration paid for purchaseof own shares (held in trust) (8) (294) (65)--------------------------------------------------------------------------------Net increase/(decrease) inshareholders' equity 54,204 (28,630) (24,629)Opening shareholders' equity 244,286 268,915 268,915--------------------------------------------------------------------------------Closing shareholders' equity 298,490 240,285 244,286-------------------------------------------------------------------------------- 11. Cash flow from operating activities 6 months ended 6 months ended Year ended 31 December 31 December 30 June 2007 2006 2007 £000 £000 £000--------------------------------------------------------------------------------Profit/(loss) for the period 62,548 (21,335) 545Adjustments for:Tax (54,847) (7,157) (134)Depreciation 158 130 283Profit on disposal ofinvestment properties (4,195) (5,300) (4,911)Profit on disposal ofsubsidiary undertaking (20) - -Loss/(profit) on disposal ofproperty, plant and equipmentand listed investments 535 (3,670) (3,890)Equity-based remuneration - - 885Finance income (536) (12) (274)Finance expense 5,699 5,107 9,511Share of joint venture profitafter tax (79) (72) (268)Exceptional receipt on leaseassignment - - (1,950)Movement in revaluation ofinvestment properties - - (23,586)Loss on debenture exchange - 41,554 41,770Decrease/(increase) in debtors 851 640 (174)(Decrease)/increase increditors (1,713) (2,356) 583--------------------------------------------------------------------------------Cash generated from operations 8,401 7,529 18,390-------------------------------------------------------------------------------- Responsibility Statement of the DirectorsSix months ended 31 December 2007 We confirm that to the best of our knowledge: a) The unaudited interim financial statements have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"; b) The interim management report includes a fair review of the information required by Sections DTR 4.2.7R and DTR 4.2.8R of the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority; and c) The unaudited interim financial statements have been prepared in accordance with the basis of preparation outlined in Note 1 to the accounts. Edward ZiffChairman and Chief ExecutiveKaren PriorFinance Director26 February 2008 This information is provided by RNS The company news service from the London Stock Exchange