30 September 2009 Financial highlights Unaudited Unaudited - PDF document

London & Stamford Property Limited Half Y ear Report 30 September 2009

Financial highlights Unaudited Unaudited Audited Six months to Six months to Year to 30 September 30 September 31 March 2009 2008 2009 Net income £6.7m £0.6m £3.1m Profit/(loss) for the period £15.9m £(1.9)m £24.0m Investment properties £303.9m £47.5m £127.1m Share of associates £65.7m – £62.8m Cash deposits £290.7m £240.5m £169.9m Bank debt £139.1m £21.9m £69.6m Net assets £521.4m £271.4m £291.7m NAV per share 104.3p 95.2p 102.3p Earnings per share 4.5p (0.7)p 8.4p Adjusted earnings per share 1.4p 0.6p 9.5p Dividend per share 2.2p 2.0p 4.0p Number of shares in issue 500m 285m 285m Contents 01 Chairman’s Statement 04 Independent Review Report to London & Stamford Property Limited 06 Group Income Statement 07 Group Balance Sheet 08 Group Statement of Changes in Equity 09 Group Cash Flow Statement 10 Notes to the Half Year Report 17 Further Information

Half Year Report 30 September 2009 01 London & Stamford Property Limited Chairman’s Statement During the period and to date there has At the time of my last statement been a considerable strengthening in on 11 June 2009, I reported on the market and a major shift in vendor the acquisition by London & expectation. There has been an increase in Stamford of the office liquidity in the market, both in equity and in the availability of debt financing which is development at No 1 Whitehall causing a tightening of yields. Increasing Riverside Leeds, the exchange capital values are also narrowing the of contracts to acquire the previous disparity between portfolio Racecourse Retail Park at Aintree carrying values and market prices and easing pressure on potential vendors. and the Somerfield Distribution Unit, Wellingborough. I am We consider now that the potential for obtaining value may lie in larger lot sizes, pleased to say that we completed outside of the range of many real estate these acquisitions later in June. investors and we continue to examine several such opportunities. We are cautious Our most recent acquisition in of the risk that current lower yields may not the period was completed late persist given the continuing weakness of the in September when we underlying occupier market, the current acquired a block of apartments, state of the UK economy and the predominantly in the North burgeoning deficit in the country’s finances. Stand of the Stadium at Highbury Square in London for Results £41.4 million. I am delighted to The Group generated a profit for the six report that we have already agreed month period of £15.9 million (2008: loss of £1.9 million). to let 59 of the 146 apartments. This transaction was the first Earnings adjusted for the revaluation of acquisition following our successful investment properties, deferred taxation and the fair value of derivatives would fundraising in July, through be £4.8 million (2008: £1.6 million). a placing and open offer of Net assets at 30 September 2009 were £225.8 million (£219.5 million £521.4 million, equivalent to 104.3p net of expenses). per share. The Board recommends an interim dividend of 2.2p per share (£11 million) in respect of the year to 31 March 2010, which will be accounted for, following its approval, in the second half of the year. We propose the payment of the interim dividend on 21 December 2009.

02 London & Stamford Property Limited Half Year Report 30 September 2009 Chairman’s Statement (continued) Portfolio and open offer for 215 million new shares at a price of 105p per share. Our portfolio at the date of this report comprises the following assets bought during 72.5 million shares were placed and 88.8% this calendar year: of the open offer entitlement was taken up by qualifying shareholders. The balance of Ownership the open offer was placed with institutional One Fleet Place, and other investors to whom conditional London 100% Offices placement had been agreed. Whitehall Riverside, The fund raising followed the successful Leeds 100% Offices investment by the Group of £146.2 million Meadowhall Shopping Shopping of equity in five assets, taking advantage Centre, Sheffield 15.7% Centre of market conditions which provided the Racecourse Retail Retail opportunity to acquire prime assets with Park, Aintree 100% Park secure long term income on attractive terms. We considered that the environment Somerfield Distribution Business looking forward would continue to provide Unit, Wellingborough 100% Space the opportunity for such acquisitions and The North Stand that therefore additional expansion capital Highbury 100% Residential was appropriate. The balance of the portfolio comprises Borrowings those assets acquired at IPO. Our borrowings at the period end Although the greatest part of recent amounted to £141 million. The borrowings improvement in yields has occurred post 30 from HBoS, Postbank and Santander are September, these results include an uplift in secured against One Fleet Place, Whitehall values of £11.56 million. Riverside and Aintree, together with various Our acquisitions in the period and earlier in of the legacy assets. the calendar year have been characterised Since the period end, we have agreed a by the quality and security of income and new facility with Helaba in respect of long unexpired lease lengths. As capital Wellingborough and the legacy assets at values in the sector have improved, our Crawley and Nottingham. portfolio has benefited. Further to the completion of the new We have also received the benefit in the facility, we have repaid our debt with period of a small uplift in the value of our HBoS, such that all of the £150 million interest in the Meadowhall Shopping revolving credit facility, priced at 80bps Centre of £2.4 million, which reflects good over LIBOR, with five years unexpired is letting and rent review results and the available for drawdown. impact of the added security of our income. We have not sought debt finance for our acquisition at Highbury. Placing and Open Offer The overall level of gearing on our During the period, the Company investment portfolio is 46%. successfully raised £225.8 million (£219.5 million net of expenses) through a placing

Half Year Report 30 September 2009 03 London & Stamford Property Limited Cash Management Outlook At the period end, our cash balance There are tentative signs of recovery in the amounted to £290.7 million. As I have economy and in retail sales and the central advised previously, the careful and secure London office market. We remain cautious management of our cash balance remains in the face of the most difficult occupier a key priority. market in my memory and pending evidence of a real and sustainable recovery. As the risk profile of the banks with which we place deposits has changed over the We are alert to the recovery process for the period so we have revised our treasury UK banking sector and believe that our management criteria. We have cash on combination of available equity and cheap deposit with fifteen banks, with none debt and management expertise should holding more than 14% of our total cash. allow us to add value to that process, in combination with a number of banks as Maturities for cash deposits vary, to ensure they seek to work out their problem that we can execute transactions rapidly, property portfolios. with only 10% of our cash deposits maturing after more than three months. As indicated in my statement in June and However, our average return on cash is again in July, the Board continues to keep only 0.59%, but exceeds the one month the prospect of moving to the main market London interbank deposit rate of around of the London Stock Exchange and 0.31%. conversion into a UK Real Estate Investment Trust at the forefront of our We propose to continue this cautious planning, subject to satisfying the approach to the management of our cash appropriate requirements. balances, since our key purpose is to buy good property offering real value. H R Mould Chairman 19 November 2009