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GREAT PORTLAND ESTATES<br />
P.L.C.<br />
Interim Report 2000
Portfolio Analysis<br />
(as at 30th September 2000)<br />
West End 48.9%<br />
Shopping Centres 21.5%<br />
City 16.6%<br />
Other Offices 5.3%<br />
South East Offices 7.7%<br />
Offices Retail Total<br />
£m £m £m<br />
London West End - North of Oxford Street 358.3 58.5 416.8 26.3%<br />
West End - Other 225.9 131.3 357.2 22.6%<br />
West End - Total 584.2 189.8 774.0 48.9%<br />
City 263.4 - 263.4 16.6%<br />
London - Total 847.6 189.8 1,037.4 65.5%<br />
South East Offices 122.8 - 122.8 7.7%<br />
Other Offices 83.8 - 83.8 5.3%<br />
Shopping Centres - 340.6 340.6 21.5%<br />
1,054.2 530.4 1,584.6 100.0%<br />
2
Highlights<br />
" Adjusted earnings up 7% to 5.8p per share (1999: 5.4p)<br />
" Interim dividend up 4% to 3.25p (1999: 3.125p)<br />
" Net assets per share up 4% to 408p<br />
" Fully diluted net assets per share up 6% to 399p<br />
" 80p per share returned to shareholders in accordance<br />
with timetable<br />
" Over £300 million of property sales in last six months<br />
" Over £1 billion of properties held in central London<br />
Results in Brief<br />
(Six months to 30th September) 2000 1999<br />
Rent receivable £57.5m £58.7m<br />
Profit before taxation £7.9m £28.3m<br />
Profit after taxation £3.1m £21.6m<br />
Earnings per share – basic 0.9p 5.7p<br />
Earnings per share – adjusted 5.8p 5.4p<br />
Dividends per share 3.25p 3.125p<br />
3
GREAT TITCHFIELD STREET<br />
Statement by the Chairman<br />
This period has seen the<br />
successful implementation<br />
of radical restructuring<br />
initiatives<br />
RICHARD PESKIN<br />
Chairman<br />
INTRODUCTION<br />
RESULTS AND DIVIDEND<br />
Since my Statement in the Annual<br />
Profit on ordinary activities, before<br />
Report and Accounts last June, most<br />
taxation and exceptional items, for<br />
shareholders will have received two<br />
the six months to 30th September<br />
further letters from me in August<br />
2000, amounted to £26.8 million.<br />
and September and will be aware,<br />
The headline figure of £7.9 million<br />
therefore, that the period under<br />
is, therefore, misleading as it includes<br />
review has seen the successful<br />
£6.9 million of costs in connection<br />
implementation of the radical<br />
with the restructuring, coupled with<br />
initiatives for the restructuring of<br />
disappointing losses of £12.0 million<br />
the Group presaged in March. The<br />
on the sale of investment properties.<br />
return of capital of £285 million,<br />
Adjusted earnings per share, however,<br />
or 80p per share, was duly made<br />
were 7% ahead at 5.8p (1999: 5.4p)<br />
on 20th September, and our aim to<br />
and your directors have declared<br />
deliver greater shareholder value is,<br />
an interim dividend of 3.25p<br />
in my view, reflected by the<br />
(1999: 3.125p), an increase of 4%,<br />
outperformance of <strong>Great</strong> <strong>Portland</strong>’s<br />
payable on 4th January 2001.<br />
share price against the FTSE All Share,<br />
FTSE 100, FTSE 250 and FTSE Real<br />
Estate indices since the original<br />
announcement of our strategic<br />
review.<br />
EXISTING HOLDINGS<br />
GREAT TITCHFIELD STREET, W1<br />
MORTIMER STREET<br />
LITTLE PORTLAND STREET<br />
32<br />
34<br />
24 - 30<br />
55 53 51<br />
20 - 22<br />
49<br />
47<br />
WELLS STREET<br />
55 58<br />
A MAJOR SCHEME TO THE NORTH OF OXFORD<br />
STREET WHICH WILL COMPRISE 250,000 SQ.FT.<br />
MARGARET STREET<br />
OF PRIMARILY OFFICE AND RETAIL SPACE.<br />
RIGHT:<br />
COMPUTERISED VISUAL OF THE FINAL<br />
DEVELOPMENT<br />
©Crown Copyright MC 100031974<br />
4
Statement by the Chairman<br />
CB Hillier Parker were instructed, for<br />
the first time at the half-yearly stage,<br />
to provide an independent valuation<br />
of the entire investment portfolio, and<br />
the properties have been valued at<br />
£1.58 billion, representing an overall<br />
uplift of 2.2%. Continued strong<br />
occupational demand in London has<br />
contributed to further good increases<br />
in rents, which have been the main<br />
driving force in capital values rising<br />
by 5.6%, with the City and Holborn<br />
holdings growing by 6.5%, and the<br />
West End and Covent Garden by 5.3%.<br />
However, negative sentiment towards<br />
retailing in general has meant a<br />
softening of yields for shopping<br />
centres and, despite modest rental<br />
growth, their values fell by 4.7%,<br />
whilst regional offices were down<br />
by 1.8%. Net assets per share,<br />
despite the previously mentioned<br />
exceptional losses, stood at 408p,<br />
an uplift of 3.7% over the equivalent<br />
figure at 31st March 2000, and<br />
diluted net assets per share increased<br />
by 5.8% to 399p.
7<br />
Statement by the Chairman<br />
PORTFOLIO REVIEW<br />
For the period under review, the<br />
main concentration has been on<br />
the rationalisation of the portfolio.<br />
Our entire industrial, distribution,<br />
retail warehousing and other non-core<br />
retail holdings were sold, together<br />
with regional offices offering limited<br />
growth prospects. Aggregate proceeds<br />
amounted to £305 million and since<br />
30th September further disposals of<br />
£12 million have been effected; this<br />
means that within twenty months<br />
some 73 properties have been sold to<br />
realise £411 million.<br />
MARGARET STREET<br />
GREAT PORTLAND STREET<br />
10 9 8 6<br />
MARKET PLACE<br />
OXFORD STREET<br />
MARKET PLACE<br />
KENT HOUSE<br />
GREAT TITCHFIELD STREET<br />
©Crown Copyright MC 100031974<br />
PEDESTRIANISED AREA<br />
EXISTING HOLDINGS<br />
MARKET PLACE, W1<br />
THE “PIAZZANISATION” OF THIS THOROUGHFARE<br />
HAS ENHANCED THE LOCAL ENVIRONMENT<br />
6
Statement by the Chairman<br />
With one half of the portfolio now<br />
situated in the West End and Covent<br />
Garden, active management here, as<br />
elsewhere, is a key ingredient in<br />
creating added value. We have<br />
succeeded in increasing rents north<br />
of Oxford Street by 10% since<br />
March, and, within fifteen months<br />
of purchase, 28 Savile Row<br />
(12,000 sq.ft.) has been completely<br />
refurbished and 66% let at rents<br />
well above original expectations.<br />
This was one of the properties on<br />
the Pollen Estate where our active<br />
involvement resulted in a highly<br />
satisfactory outcome, through the<br />
profitable sale of our beneficial stake<br />
in the Pollen Trust and the<br />
simultaneous regearing of our long<br />
leasehold interests.<br />
As previously mentioned, modest<br />
rental growth was achieved in our<br />
shopping centres. With 560,000 sq.ft.<br />
of space now under our control at<br />
Harlow, we continue to consolidate<br />
our dominant position in the town<br />
and we are constructing a 60,000 sq.ft.<br />
store for Woolworths which should be<br />
open in the spring of 2002.<br />
Discussions are taking place with<br />
adjoining developers and the<br />
local authority with a view to<br />
strengthening the town’s position in<br />
the retail hierarchy of the north east<br />
quadrant of the M25. In High<br />
Wycombe our development partners<br />
and the local authority are facing<br />
serious delays in fulfilling the<br />
conditions of our funding<br />
arrangement, and we are, therefore,<br />
reviewing with them our commitment<br />
to the proposed 400,000 sq.ft.<br />
Western Sector extension to our<br />
adjoining Octagon Centre.<br />
Construction has started on the<br />
200,000 sq.ft. Sol Central leisure<br />
complex in Northampton, where<br />
the building is already 65% pre-let<br />
and has a scheduled completion date<br />
of summer 2001. It is a testimony to<br />
our management skills that the void<br />
element of our entire portfolio<br />
remains at only 1% of the current rent<br />
roll.<br />
With regard to our medium-term<br />
office development programme,<br />
good progress is being made with<br />
the relevant planning authorities at<br />
Frimley (81,000 sq.ft.), 22/25<br />
Northumberland Avenue, WC2<br />
(18,000 sq.ft.), 190 <strong>Great</strong> <strong>Portland</strong><br />
Street, W1 (135,000 sq.ft.) and the<br />
scheme at Mortimer Street/<strong>Great</strong><br />
Titchfield Street, W1 (240,000 sq.ft.).<br />
In the City, a consortium is being<br />
formed with two adjoining<br />
landowners to investigate the<br />
redevelopment potential of a large<br />
site incorporating our holdings in<br />
St. Mary Axe, Camomile Street and<br />
Bishopsgate, EC2.<br />
7
Statement by the Chairman<br />
FINANCIAL REVIEW<br />
The portfolio rationalisation<br />
programme, capital reduction and<br />
return of cash to shareholders<br />
generated a number of one-off, or<br />
exceptional, items in the six months<br />
to 30th September 2000. £1.9 million<br />
of exceptional administration costs<br />
were incurred on the capital<br />
restructuring, and the £52.4 million<br />
9.5% Convertible Unsecured Loan<br />
Stock 2002 was redeemed at a<br />
premium of £5.0 million on 1st June.<br />
Without this redemption the Company<br />
would neither have been able to effect<br />
the capital reduction nor to buy in<br />
further shares, and it added 8p to<br />
diluted net assets per share.<br />
Furthermore, by saving £3.2 million<br />
of interest over the following two and<br />
a half years, the overall cost will only<br />
be £1.2 million after tax. The loss on<br />
the sale of investment properties of<br />
£12.0 million comprised selling costs<br />
of £3.8 million and a loss against<br />
March 2000 values of £8.2 million.<br />
The redemption of the Loan Stock,<br />
as mentioned above, was the only<br />
change in the Company’s gross<br />
debt in the six months to<br />
30th September 2000, and the<br />
weighted average cost of debt<br />
remained at 8.3%. Following the<br />
capital reduction, gearing at 30th<br />
September 2000 rose to 79%<br />
(31st March 2000: 60%) net of<br />
cash balances of £23 million and<br />
the Group had in place undrawn<br />
bank facilities of £40 million. Under<br />
Financial Reporting Standard 13,<br />
the market value of the Group’s<br />
financial instruments at 30th<br />
September 2000 exceeded the<br />
amount at which they were shown<br />
in the consolidated balance sheet by<br />
£90 million, representing a potential<br />
reduction in net assets per share<br />
of 29p after tax; there remained<br />
no inherent liability to taxation on<br />
capital gains within the portfolio<br />
as a whole. The Company aims<br />
to maintain a sensible balance<br />
of long-term, fixed rate and<br />
medium-term debt commensurate<br />
with the size of the business which<br />
it helps to finance and, following<br />
the capital reduction, steps are under<br />
consideration to address the size and<br />
nature of the Group’s borrowings.<br />
8
25 24<br />
Statement by the Chairman<br />
In May, shareholders gave formal<br />
approval to the capital reduction,<br />
which gained Court confirmation in<br />
early September, and 80p per share<br />
was duly returned to shareholders<br />
on 20th September. Our shares were<br />
consolidated on the basis of three<br />
for every five previously in issue,<br />
effective on 11th September, and the<br />
closing share price on that day was<br />
257 1 /2p, for the purpose of tax on<br />
capital gains. At the Annual General<br />
Meeting in July, shareholders renewed<br />
the authority to buy in a further 15%<br />
of the issued share capital, and, in<br />
September, we bought back 250,000<br />
shares at a cost of 224p each, which<br />
had a small incremental effect on net<br />
asset value per share.<br />
Following the sale of most of our<br />
non-core properties, our rent roll<br />
now stands at £97.7 million per<br />
annum, and is now estimated to<br />
be reversionary to the tune of<br />
£14.0 million within the next five<br />
years; an analysis of the portfolio at<br />
30th September 2000 is set out<br />
on page 2.<br />
BOARD CHANGES<br />
David Godwin became Deputy<br />
Chairman on the retirement of Roger<br />
Payton after the Annual General<br />
Meeting in July. In October, Patrick<br />
Hall, the director in charge of<br />
acquisitions and disposals since<br />
joining us nine years ago and Joint<br />
Managing Director since last April,<br />
resigned from the Board as he felt<br />
that, with the sales programme<br />
substantially complete, it was an<br />
appropriate time for him to move<br />
on. Peter Shaw, who was appointed<br />
Joint Managing Director along with<br />
Patrick in April and who also joined<br />
the Group in 1991, became Managing<br />
Director.<br />
PROSPECTS<br />
A great deal of work has been done<br />
during the past few months in<br />
restructuring the portfolio and further<br />
sensible rationalisation is proceeding.<br />
Although current economic conditions<br />
appear to remain relatively calm, there<br />
are some indications that the United<br />
Kingdom property market is slowing<br />
down and, indeed, it would be<br />
surprising to expect the very strong<br />
rental and capital growth of the last<br />
two to three years to be sustained.<br />
Having said that, however,<br />
I believe that there is still good<br />
potential within our chosen spheres<br />
of operation and that shareholder<br />
value will best be realised by our<br />
strategy of continued investment and<br />
development in London and in South<br />
East offices.<br />
RICHARD PESKIN<br />
Chairman<br />
21st November 2000<br />
CHARING CROSS STATION<br />
NORTHUMBERLAND STREET<br />
CRAVEN STREET<br />
EXISTING HOLDINGS<br />
CRAVEN PASSAGE<br />
22/25 NORTHUMBERLAND AVENUE, WC2<br />
A DEVELOPMENT CLOSE TO TRAFALGAR SQUARE<br />
SUBJECT TO A PLANNING APPLICATION TO<br />
INCREASE THE FLOOR SPACE BY 45% ON AN<br />
18,500 SQ.FT. OFFICE SITE<br />
23 22<br />
NORTHUMBERLAND AVENUE<br />
©Crown Copyright MC 100031974<br />
9
Unaudited Group Profit and Loss Account<br />
For the six months ended 30th September 2000<br />
YEAR TO SIX MONTHS TO SIX MONTHS TO<br />
31ST MARCH 30TH SEPTEMBER 30TH SEPTEMBER<br />
2000 2000 1999<br />
£m NOTES £m £m<br />
119.8 Rent receivable 2 57.5 58.7<br />
(2.0) Ground rents (1.0) (0.9)<br />
117.8 Net rental income 56.5 57.8<br />
(3.5) Property and refurbishment costs (1.7) (1.7)<br />
(4.5) Administration expenses 3 (4.7) (2.2)<br />
109.8 50.1 53.9<br />
1.0 Trading profits – –<br />
110.8 Operating profit 50.1 53.9<br />
4.7 (Loss)/profit on sale of investment properties (12.0) 1.3<br />
115.5 Profit on ordinary activities before interest 38.1 55.2<br />
3.0 Interest receivable 4 1.9 2.2<br />
(58.0) Interest payable 5 (32.1) (29.1)<br />
60.5 Profit on ordinary activities before taxation 7.9 28.3<br />
(14.4) Tax on profit on ordinary activities 6 (4.8) (6.7)<br />
46.1 Profit on ordinary activities after taxation 3.1 21.6<br />
(34.5) Dividends 7 (7.0) (11.8)<br />
11.6 Retained (loss)/profit for the period (3.9) 9.8<br />
12.3p Earnings per share – basic 8 0.9p 5.7p<br />
11.1p Earnings per share – adjusted 8 5.8p 5.4p<br />
9.5p Dividend per share 7 3.25p 3.125p<br />
10
Unaudited Group Balance Sheet<br />
As at 30th September 2000<br />
31ST MARCH 30TH SEPTEMBER 30TH SEPTEMBER<br />
2000 2000 1999<br />
£m NOTES £m £m<br />
Tangible fixed assets<br />
1,845.0 Investment properties 9 1,584.6 1,707.7<br />
14.9 Investments – 12.2<br />
1,859.9 1,584.6 1,719.9<br />
Current assets<br />
1.4 Stock of trading properties 4.5 3.6<br />
21.6 Debtors 32.7 12.8<br />
85.4 Cash at bank and short-term deposits 23.0 25.9<br />
108.4 60.2 42.3<br />
79.1 Creditors: amounts falling due within one year 63.3 68.9<br />
29.3 Net current (liabilities)/assets (3.1) (26.6)<br />
1,889.2 Total assets less current liabilities 1,581.5 1,693.3<br />
Creditors: amounts falling due after more<br />
than one year<br />
454.1 Debenture loans 454.1 456.0<br />
109.6 Convertible loans 56.7 110.8<br />
197.7 Bank and other loans 197.7 47.8<br />
761.4 708.5 614.6<br />
1,127.8 873.0 1,078.7<br />
Capital and reserves<br />
178.4 Called up share capital 107.0 188.7<br />
238.4 Share premium account 24.3 238.4<br />
607.3 Revaluation reserve 596.3 533.6<br />
19.3 Other reserves 19.4 85.5<br />
84.4 Profit and loss account 126.0 32.5<br />
1,127.8 Equity shareholders’ funds 873.0 1,078.7<br />
11
Unaudited Group Statement of Total Recognised Gains and Losses<br />
For the six months ended 30th September 2000<br />
YEAR TO SIX MONTHS TO SIX MONTHS TO<br />
31ST MARCH 30TH SEPTEMBER 30TH SEPTEMBER<br />
2000 2000 1999<br />
£m £m £m<br />
46.1 Profit for the period 3.1 21.6<br />
85.7 Unrealised surplus on revaluation of fixed assets 34.9 –<br />
131.8 Total recognised gains and losses for the period 38.0 21.6<br />
Unaudited Note of Historical Cost Profits and Losses<br />
For the six months ended 30th September 2000<br />
YEAR TO SIX MONTHS TO SIX MONTHS TO<br />
31ST MARCH 30TH SEPTEMBER 30TH SEPTEMBER<br />
2000 2000 1999<br />
£m £m £m<br />
60.5 Reported profit on ordinary activities before taxation 7.9 28.3<br />
34.5 Realisation of revaluation surpluses of previous years 45.9 22.5<br />
95.0 Historical cost profit on ordinary activities before taxation 53.8 50.8<br />
Historical cost profit for the period retained after<br />
46.1 taxation and dividends 42.0 32.3<br />
12
Unaudited Group Statement of Cash Flows<br />
For the six months ended 30th September 2000<br />
YEAR TO SIX MONTHS TO SIX MONTHS TO<br />
31ST MARCH 30TH SEPTEMBER 30TH SEPTEMBER<br />
2000 2000 1999<br />
£m £m £m<br />
112.7 Net cash inflow from operating activities 35.6 46.2<br />
Returns on investments and servicing of finance<br />
3.5 Interest received 2.0 2.8<br />
(57.8) Interest paid (19.7) (29.2)<br />
Net cash outflow from returns on investments<br />
(54.3) and servicing of finance (17.7) (26.4)<br />
(13.0) Tax paid (4.3) (2.1)<br />
Capital expenditure<br />
(144.7) Payments to acquire investment properties (11.4) (24.0)<br />
86.4 Receipts from sale of investment properties 288.4 31.7<br />
(0.5) Payments to acquire investments – (0.5)<br />
– Receipts from sale of investments 14.9 –<br />
(58.8) Net cash inflow/(outflow) from capital expenditure 291.9 7.2<br />
(35.4) Equity dividends paid (22.7) (23.6)<br />
Net cash inflow/(outflow) before use of liquid resources<br />
(48.8) and financing 282.8 1.3<br />
Management of liquid resources<br />
87.4 Cash withdrawn from short-term deposit 65.7 150.4<br />
Financing<br />
– Redemption of shares (285.4) –<br />
(38.4) Purchase of shares (0.4) –<br />
(3.5) Redemption of loans (57.9) (170.0)<br />
– Drawdown of bank loans – 20.0<br />
(41.9) Net cash outflow from financing (343.7) (150.0)<br />
(3.3) Increase/(decrease) in cash 4.8 1.7<br />
13
Reconciliation of Operating Profit<br />
to Net Cash Inflow from Operating Activities<br />
YEAR TO SIX MONTHS TO SIX MONTHS TO<br />
31ST MARCH 30TH SEPTEMBER 30TH SEPTEMBER<br />
2000 2000 1999<br />
£m £m £m<br />
110.8 Operating profit 50.1 53.9<br />
2.0 (Increase)/decrease in stock of trading properties (3.1) (0.2)<br />
(1.3) (Increase)/decrease in debtors (4.9) (3.9)<br />
1.2 (Decrease)/increase in creditors (6.5) (3.6)<br />
112.7 Net cash inflow from operating activities 35.6 46.2<br />
Reconciliation of Net Cash Flow to Movement in Net Debt<br />
YEAR TO SIX MONTHS TO SIX MONTHS TO<br />
31ST MARCH 30TH SEPTEMBER 30TH SEPTEMBER<br />
2000 2000 1999<br />
£m £m £m<br />
(3.3) Increase/(decrease) in cash in the period 4.8 1.7<br />
(87.4) Decrease in short-term deposits (65.7) (150.4)<br />
3.5 Cash outflow from redemption of loans 57.9 170.0<br />
– Cash inflow from increase in debt – (20.0)<br />
(87.2) Change in net debt arising from cash flows (3.0) 1.3<br />
0.2 Other non-cash movements (5.0) 0.1<br />
(87.0) Movement in net debt in the period (8.0) 1.4<br />
(590.5) Net debt at the beginning of the period (677.5) (590.5)<br />
(677.5) Net debt at the end of the period (685.5) (589.1)<br />
Analysis of Net Debt<br />
AT<br />
AT<br />
1ST APRIL CASH FLOW NON-CASH 30TH SEPTEMBER<br />
2000 CHANGES 2000<br />
£m £m £m £m<br />
Cash (1.5) 4.8 – 3.3<br />
Short-term deposits 85.4 (65.7) – 19.7<br />
Debt due after one year (761.4) 57.9 (5.0) (708.5)<br />
(677.5) (3.0) (5.0) (685.5)<br />
14
Notes Forming Part of the Interim Statement<br />
1 BASIS OF PREPARATION OF INTERIM FINANCIAL INFORMATION<br />
The interim financial information has been prepared on the basis of the accounting policies set out in the Group’s 2000<br />
statutory accounts. The financial information contained in this report does not constitute statutory accounts within the<br />
meaning of section 240 of the Companies Act 1985. The abridged accounts for the year ended 31st March 2000 are an<br />
extract from the accounts for that year which, together with an unqualified audit report, have been delivered to the<br />
Registrar of Companies.<br />
2 TURNOVER AND SEGMENTAL ANALYSIS<br />
Rent receivable by location:<br />
YEAR TO SIX MONTHS TO SIX MONTHS TO<br />
31ST MARCH 30TH SEPTEMBER 30TH SEPTEMBER<br />
2000 2000 1999<br />
£m £m £m<br />
18.2 West End – North of Oxford Street 9.6 8.8<br />
19.9 Other West End and Covent Garden 10.3 9.8<br />
16.8 City and Holborn 9.1 8.0<br />
22.7 South East of England 9.9 11.5<br />
42.2 Rest of United Kingdom 18.6 20.6<br />
119.8 57.5 58.7<br />
Rent receivable is stated exclusive of value added tax, and arose wholly from continuing operations in the United<br />
Kingdom. No operations were discontinued during the period.<br />
3 ADMINISTRATION EXPENSES<br />
YEAR TO SIX MONTHS TO SIX MONTHS TO<br />
31ST MARCH 30TH SEPTEMBER 30TH SEPTEMBER<br />
2000 2000 1999<br />
£m £m £m<br />
Administration expenses<br />
4.5 Other 2.8 2.2<br />
Exceptional item<br />
– Capital restructuring 1.9 –<br />
4.5 4.7 2.2<br />
4 INTEREST RECEIVABLE<br />
YEAR TO SIX MONTHS TO SIX MONTHS TO<br />
31ST MARCH 30TH SEPTEMBER 30TH SEPTEMBER<br />
2000 2000 1999<br />
£m £m £m<br />
2.5 Short-term deposits 1.5 1.9<br />
0.5 Other 0.4 0.3<br />
3.0 1.9 2.2<br />
15
Notes Forming Part of the Interim Statement<br />
5 INTEREST PAYABLE<br />
YEAR TO SIX MONTHS TO SIX MONTHS TO<br />
31ST MARCH 30TH SEPTEMBER 30TH SEPTEMBER<br />
2000 2000 1999<br />
£m £m £m<br />
Interest payable<br />
10.5 Bank loans and overdrafts 5.0 5.3<br />
47.5 Other 22.1 23.8<br />
58.0 27.1 29.1<br />
Exceptional item<br />
– Premium on early redemption of loan stock 5.0 –<br />
58.0 32.1 29.1<br />
6 TAXATION<br />
Taxation has been calculated using the estimated effective tax rate for the full year. The difference between the standard<br />
rate of tax and the effective rate principally reflects the benefit of capital allowances available on plant and equipment in<br />
respect of investment properties.<br />
7 DIVIDENDS<br />
An interim dividend of 3.25p per share (1999: 3.125p) will be paid on 4th January 2001 to shareholders on the<br />
register at 1st December 2000.<br />
8 EARNINGS PER SHARE<br />
Earnings per share for the six months are based on income attributable to ordinary shareholders of £3,100,000<br />
(1999: £21,600,000) and on the weighted average of 341,215,548 shares in issue (1999: 377,462,638 shares). There<br />
is no impact on earnings per share of conversion of the convertible bonds, or the exercise of share options.<br />
The directors believe that earnings per share before exceptional items and profits or losses on sales of investment<br />
properties and investments provide a more meaningful measure of the Group’s performance. Accordingly, earnings per<br />
share on that adjusted basis have been disclosed on the face of the profit and loss account, and calculated as follows:<br />
YEAR TO SIX MONTHS TO SIX MONTHS TO SIX MONTHS TO SIX MONTHS TO<br />
31ST MARCH 30TH SEPTEMBER 30TH SEPTEMBER 30TH SEPTEMBER 30TH SEPTEMBER<br />
2000 2000 2000 1999 1999<br />
EARNINGS PROFIT EARNINGS PROfiT EARNINGS<br />
PER SHARE AFTER TAX PER SHARE AFTER TAX PER SHARE<br />
PENCE £m PENCE £m PENCE<br />
12.3 Basic 3.1 0.9 21.6 5.7<br />
– Exceptional items 4.8 1.4 – –<br />
Loss/(profit) on sale of<br />
(1.2) investment properties 12.0 3.5 (1.3) (0.3)<br />
11.1 Adjusted 19.9 5.8 20.3 5.4<br />
16
Notes Forming Part of the Interim Statement<br />
9 INVESTMENT PROPERTIES<br />
LEASEHOLD<br />
FREEHOLD/ OVER LEASEHOLD<br />
FEUHOLD 900 YEARS 50-250 YEARS TOTAL<br />
£m £m £m £m<br />
At 1st April 2000 1,391.7 170.8 282.5 1,845.0<br />
Additions at cost 6.8 0.1 11.5 18.4<br />
Disposals (254.3) (54.8) (4.6) (313.7)<br />
1,144.2 116.1 289.4 1,549.7<br />
Surplus on revaluation 27.5 4.7 2.7 34.9<br />
At 30th September 2000 1,171.7 120.8 292.1 1,584.6<br />
17
Independent Review Report to<br />
<strong>Great</strong> <strong>Portland</strong> <strong>Estates</strong> P.L.C.<br />
INTRODUCTION<br />
We have been instructed by the Company to review the financial information set out on pages 10 to 17, and we have<br />
read the other information contained in the interim report and considered whether it contains any apparent<br />
misstatements or material inconsistencies with the financial information.<br />
DIRECTORS’ RESPONSIBILITIES<br />
The interim report, including the financial information contained therein, is the responsibility of, and has been<br />
approved by, the directors. The Listing Rules of the Financial Services Authority require that the accounting policies and<br />
presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual<br />
accounts except where any changes, and the reasons for them, are disclosed.<br />
REVIEW WORK PERFORMED<br />
We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices<br />
Board. A review consists principally of making enquiries of group management and applying analytical procedures to<br />
the financial information and underlying financial data and based thereon, assessing whether the accounting policies<br />
and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as<br />
tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit<br />
performed in accordance with Auditing Standards and therefore provides a lower level of assurance than an audit.<br />
Accordingly we do not express an audit opinion on the financial information.<br />
REVIEW CONCLUSION<br />
On the basis of our review we are not aware of any material modifications that should be made to the financial<br />
information as presented for the six months ended 30th September 2000.<br />
ERNST & YOUNG<br />
Registered Auditor<br />
London<br />
21st November 2000<br />
18
Directors<br />
RICHARD PESKIN MA, LLM, FRSA, CIMGT<br />
Chairman, Non-Executive<br />
DAVID GODWIN<br />
Deputy Chairman, Non-Executive<br />
PETER SHAW FRICS, ACIARB<br />
Managing Director<br />
JOHN WHITELEY BA(ECON), FCA<br />
Finance Director<br />
PAUL GITTENS FRICS<br />
Executive Director<br />
HOWARD PERLIN FCA<br />
Non-Executive Director<br />
ANTHONY GRAHAM FRICS<br />
Non-Executive Director<br />
JOHN EDGCUMBE BSc FRICS<br />
Non-Executive Director<br />
SECRETARY<br />
Desna Martin BCOM, CA(AUST)<br />
Shareholders’ Information<br />
FINANCIAL CALENDAR 2000<br />
Ex-dividend date for interim dividend<br />
27th November<br />
Registration qualifying date for interim dividend<br />
1st December<br />
Interim dividend payable<br />
Announcement of full year results<br />
Circulation of Annual Report and Accounts 2001<br />
Annual General Meeting<br />
Final dividend payable<br />
* Provisional<br />
2001<br />
4th January<br />
5th June*<br />
15th June*<br />
17th July*<br />
20th July*<br />
DESIGNED BY CITIGATE LLOYD NORTHOVER PRODUCED BY CL CITY<br />
SHAREHOLDER ENQUIRIES<br />
All enquiries relating to holdings<br />
of shares, loan stock, bonds or<br />
debentures in <strong>Great</strong> <strong>Portland</strong> <strong>Estates</strong>,<br />
including notification of change<br />
of address, queries regarding<br />
dividend/interest payments or<br />
the loss of a certificate, should be<br />
addressed to the Company’s Registrars:<br />
Capita IRG plc<br />
Bourne House<br />
34 Beckenham Road<br />
Beckenham<br />
Kent BR3 4TU<br />
Tel 020 8639 2000<br />
WEB SITE<br />
The Company has a corporate web<br />
site which holds, amongst other<br />
information, a copy of our latest<br />
annual report and accounts, a list of<br />
properties held by the Group and<br />
copies of all press announcements<br />
released over the last twelve months.<br />
It can be found at www.gpe.co.uk<br />
PERSONAL EQUITY PLANS (PEPs)<br />
Following changes in legislation, the<br />
Company can no longer offer PEPs to<br />
private shareholders. Existing General<br />
and Single Company PEP holders can,<br />
however, continue their PEPs under<br />
the original arrangements and for<br />
further information should contact<br />
the Plan Manager at:<br />
Bank of Scotland<br />
Personal Equity Plans<br />
PO Box 17122<br />
600 Gorgie Road<br />
Edinburgh EH11 3WA<br />
Tel 0131 442 8271<br />
LOW COST DEALING SERVICE<br />
This service provides both existing<br />
and prospective shareholders with a<br />
simple, postal, low-cost method of<br />
buying and selling <strong>Great</strong> <strong>Portland</strong><br />
<strong>Estates</strong> shares. For further information,<br />
or a dealing form, contact:<br />
Cazenove & Co.<br />
12 Tokenhouse Yard<br />
London EC2R 7AN<br />
Tel 020 7606 1768<br />
REGISTERED OFFICE<br />
Knighton House<br />
56 Mortimer Street<br />
London W1N 8BD<br />
Tel 020 7580 3040<br />
Fax 020 7631 5169<br />
Registered Number 596137